netcompany

Netcompany Group A/S

Offering of 20,000,000 ordinary shares

(a public limited liability company incorporated in Denmark under registration (CVR) no. 39 48 89 14)

This document (the "Offering Circular") relates to the initial public offering (the "Offering") of 20,000,000 ordinary shares of DKK 1 nominal value each (the "Offer Shares"), in Netcompany Group A/S (the "Company"). The Offer Shares are being offered by: (i) FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, (jointly referred to as the "Significant Shareholders"); (ii) André Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB, Danica Pension, Livsforsikringsaktieselskab; and (iii) NC ShareCo ApS as well as participants in the Group's management incentive program, certain employee shareholders, four members of the Board of Directors and a member of the Executive Management (jointly referred to as the "MIP Participants and Employee Shareholders") (the shareholders under (i), (ii) and (iii) above are jointly referred to as the "Selling Shareholders"). The Company will not receive any proceeds from the Offering. The Shares held indirectly by André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS will be transferred to a joint holding company prior to Admission (as defined herein).

The Offering consists of (i) an initial public offering to retail and institutional investors in Denmark (the "Danish Offering"); (ii) a private placement in the United States to persons who are "qualified institutional buyers" or "QIBs" (as defined in Rule 144A ("Rule 144A") under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act")) in reliance on Rule 144A or pursuant to another available exemption from the registration requirements under the U.S. Securities Act; and (iii) private placements to institutional investors in the rest of the world (together with the private placement contemplated under (ii) above, the "International Offering"). The Offering outside the United States will be made in compliance with Regulation S ("Regulation S") under the U.S. Securities Act.

The Significant Shareholders have granted the Joint Global Coordinators (as defined herein), on behalf of the Managers (as defined herein), an option (the "Overallotment Option") to purchase up to 3,000,000 additional Shares (the "Option Shares") at the Offer Price (as defined below), exercisable, in whole or in part, from the first day of trading and official listing of the Shares until 30 calendar days thereafter, solely to cover overallotments or short positions, if any, incurred in connection with the Offering. As used herein, "Shares" shall refer to all outstanding shares of the Company at any given time. If the Overallotment Option is exercised, the term "Offer Shares" shall also include any Option Shares.

You are advised to examine all the risks and legal requirements described in this Offering Circular that might be relevant in connection with an investment in the Offer Shares. Investing in the Offer Shares involves a high degree of risk. See "Risk Factors" beginning on page 57 for a discussion of certain risks that prospective investors should consider before investing in the Offer Shares.

OFFER PRICE RANGE: DKK 135—DKK 165 PER OFFER SHARE

The offer price at which the Offer Shares will be sold (the "Offer Price") is expected to be between DKK 135 and DKK 165 per share (the "Offer Price Range") and will be determined through a book-building process. The Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, the Company's board of directors (the "Board of Directors") and the Joint Global Coordinators, and is expected to be announced through Nasdaq Copenhagen A/S ("Nasdaq Copenhagen") no later than 7:30 a.m. (CET) on 7 June 2018.

The offer period (the "Offer Period") will commence on 23 May 2018 and will close no later than 6 June 2018 at 11:00 a.m. (CET). The Offer Period may be closed prior to 6 June 2018; however, the Offer Period will not be closed in whole or in part before 1 June 2018 at 00:01 a.m. (CET). The Offer Period is respect of applications for purchases of amounts up to, and including, DKK 3 million may be closed before the remainder of the Offering is closed. If the Offering is closed before 6 June 2018, the first day of trading may be moved forward accordingly. Any such early closing, in whole or in part, will be announced through Nasdaq Copenhagen.

Payment for and settlement of the Offer Shares are expected to take place on or around 11 June 2018 (the "Settlement Date") by way of delivery of Shares under the permanent ISIN DK0060952919 against payment in immediately available funds in Danish kroner in book-entry form to investors' accounts with VP SECURITIES A/S ("VP Securities") and through the facilities of Euroclear Bank S.A./N.A., as operator of the Euroclear System ("Euroclear") and Clearstream Banking, S.A. ("Clearstream"). If the Offering is closed before 6 June 2018, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved.

Prior to the Offering, there has been no public market for the Shares. Application has been made for the Shares to be admitted to trading on Nasdaq Copenhagen (the "Admission") under the symbol "NETC". The Admission is subject to, among other things, completion of the IPO Reorganisation (as defined herein), Nasdaq Copenhagen's approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to settlement and the Company making an announcement to that effect. The first day of trading and official listing of the Shares on Nasdaq Copenhagen under the permanent ISIN is expected to be 7 June 2018 subject to the Offering not being withdrawn prior to settlement and completion of the Offering.

This document has been prepared under Danish law in compliance with the requirements set out in the Consolidated Act no. 12 of 8 January 2018 on Capital Markets (the "Danish Capital Markets Act"), the Executive Order no. 1176 of 31 October 2017 on Prospectuses (the "Danish Executive Order on Prospectuses") as well as Commission Regulation (EC) no. 809/2004 of 29 April 2004, as amended (the "Prospectus Regulation"). This document does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any of the Offer Shares in any jurisdiction to any person to whom it would be unlawful to make such an offer in such a jurisdiction.

The Offer Shares have not been and will not be registered under the U.S. Securities Act and are being offered and sold (i) in the United States only to persons who are QIBs in reliance on Rule 144A under the U.S. Securities Act; and (ii) outside the United States in compliance with Regulation S. Prospective investors are hereby notified that sellers of the Offer Shares may be relying on the exemption from the registration requirements of Section 5 of the U.S. Securities Act provided by Rule 144A. For certain restrictions on transfer of the Offer Shares, see "Transfer Restrictions". The distribution of this document and the offer of the Offer Shares in certain jurisdictions are restricted by law. Persons into whose possession this document comes are required by the Company, the Selling Shareholders and the Managers to inform themselves about and to observe such restrictions. For a description of certain restrictions on offers of Offer Shares and on distribution of this document, see "Selling Restrictions"

Joint Global Coordinators and Joint Bookrunners

Danske Bank

Deutsche Bank

Jordanit Bookrunner

SEB

Morgan Stanley

The date of this Offering Circular is 23 May 2018

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INTRODUCTION 1
Notice to Investors in the United States 1
European Economic Area Restrictions 1
United Kingdom Restrictions 2
Information to Distributors 2

RESPONSIBILITY STATEMENT 3
The Company's Responsibility 3
The Company's Statement 3

SUMMARY 4
Danish Summary 4
English Summary 31

RISK FACTORS 57
Risks Relating to the Group's Business and Operations 57
Risks Relating to the Offering 80

IMPORTANT NOTICE RELATING TO THE OFFERING CIRCULAR 84
Stabilisation 85

SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS 86

ENFORCEMENT OF CIVIL LIABILITIES AND SERVICE OF PROCESS 88

PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION 89
Non-IFRS Financial Measures 89
Rounding Adjustments 91
Trademarks 91
Presentation of Compound Annual Growth Rate 91

FOREIGN CURRENCY PRESENTATION 92
Exchange Rates 92
Exchange Controls and Other Limitations Affecting Shareholders of a Danish Company 93

AVAILABLE INFORMATION 94

MARKET AND INDUSTRY INFORMATION 95

EXPECTED TIMETABLE OF OFFERING AND FINANCIAL CALENDAR 96
Expected Timetable of Principal Events 96
Financial Calendar 96

BACKGROUND TO THE OFFERING AND USE OF PROCEEDS 97

DIVIDENDS AND DIVIDEND POLICY 98
General 98
Dividend Policy and Share Buybacks 98
Recent Dividends 98
Legal and Regulatory Requirements 98
Other Requirements 99

CAPITALISATION AND INDEBTEDNESS 100
Capitalisation 100
Indebtedness 101

INDUSTRY 102
The Next-Generation IT Services Market and Trends 102
Focus Markets and Segments 105

BUSINESS 111
Overview 111
The Group's Business Model 112
The Group's Competitive Strengths 113
The Group's Strategies 115
History and Development 117
Key Business Areas 118
Categories of Services and Solutions 123
Customers 125
Sales and Marketing 126
Vendor Relationships and Strategic Partnerships 126
Employees 126
IT Audit Standards 129
Material Contracts 129

PAGE

Intellectual Property Rights 131
Legal Proceedings, Investigations and Other Regulatory Matters 131
Real Property 131
Insurance 131
Regulation 132
Risk Management 132
Corporate Social Responsibility and Environment 132

REORGANISATION 133
IPO Reorganisation and Post-IPO Reorganisation Steps 133
Reorganisation Agreements 135

SELECTED HISTORICAL FINANCIAL AND OPERATING INFORMATION 136
Combined Income Statement 136
Balance Sheet Data 137
Statement of Cash Flow Data 138

OPERATING AND FINANCIAL REVIEW 139
Overview 139
Consolidated Income Statement Line Items 139
Non-IFRS Financial Measures and Other Key Performance Indicators 141
Key Factors Affecting the Group's Results of Operations 146
Comparison of Results for the Group for the Three Months Ended 31 March 2018 and 31 March 2017 156
Comparison of Results for the Group for the Years Ended 31 December 2017 and 31 December 2016 160
Comparison of Results for the Group for the Years Ended 31 December 2016 and 31 December 2015 163
Liquidity and Capital Resources 166
Financing Arrangements and Commitments 168
Off-Balance Sheet Arrangements 170
Disclosures About Market Risks 170
Key Accounting Policies 172

FORECAST OF CONSOLIDATED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2018 AND PROJECTIONS OF CONSOLIDATED MEDIUM TERM FINANCIAL TARGETS FOR THE THREE-YEAR PERIOD ENDING 31 DECEMBER 2021 178
Statement by the Board of Directors and Executive Management 178
Report from Netcompany Group A/S' Independent Auditors regarding the Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021 179
Introduction 181
Methodology and Assumptions 181
Assumptions 182
Non-IFRS Financial Measures 185
Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 185
Projections of Consolidated Medium Term Financial Targets for the Three-Year Period Ending 31 December 2021 185

BOARD OF DIRECTORS, EXECUTIVE MANAGEMENT AND KEY EMPLOYEES 186
Overview 186
Board of Directors 186
Executive Management 190
Key Employee 192
Incentive Programmes 193
Statement on Past Records 195
Statement on Conflicts of Interest 195
Description of Internal Control and Financial Reporting Procedures 196
Corporate Governance 197

OWNERSHIP STRUCTURE AND SELLING SHAREHOLDERS 198
Ownership Structure 198
Table of Shareholders 198

PAGE

The Selling Shareholders 201
Agreements Related to the Ownership of the Group 202
RELATED PARTY TRANSACTIONS 204
DESCRIPTION OF THE SHARES AND SHARE CAPITAL 205
Registered Share Capital 205
Movement in the Share Capital 205
Authorisation to Increase the Share Capital 205
Authorisation to Acquire Treasury Shares 206
Authorisation to Distribute Interim Dividend 206
General Meetings and Voting Rights 206
Resolutions by the General Meetings and Amendments to the Articles of Association 207
Registration of Shares 207
Transfer of Shares 207
Preemption Rights 208
Redemption and Conversion Provisions 208
Dissolution and Liquidation 208
Indication of Takeover Bids 208
Disclosure of Information 208
TAXATION 209
Danish Tax Considerations 209
Certain United States Federal Income Tax Considerations 212
THE OFFERING 216
Joint Global Coordinators 216
The Offering 216
Offer Price 216
Offer Period 217
Submission of Bids 217
Minimum and Maximum Purchase Amounts 217
Allocation and Reduction 217
Trading and Official Listing on Nasdaq Copenhagen 218
Identification 218
Share Lending Agreement 218
Registration and Settlement 219
Withdrawal of the Offering 219
Investors' Withdrawal Rights 220
Costs of the Offering 220
Selling Agents for the Danish Offering 220
Interests of Natural and Legal Persons Involved in the Offering 220
Governing Law 221
THE DANISH SECURITIES MARKET 222
Nasdaq Copenhagen 222
Registration Process 222
Nominees 222
Settlement Process 222
Disclosure of Major Shareholdings 223
Short Selling 224
Mandatory Tender Offers 224
Mandatory Redemption of Shares 225
Disclosure Requirements for Companies Admitted to Trading and Official Listing on Nasdaq Copenhagen 225
PLAN OF DISTRIBUTION 226
The Offering 226
Lock-up Arrangements 227
Price Stabilisation and Short Positions 229
Other Relationships 229
SELLING RESTRICTIONS 231
United States 231
European Economic Area 231

United Kingdom ... 231
Canada ... 231
General ... 232
TRANSFER RESTRICTIONS ... 233
LEGAL MATTERS ... 235
STATE AUTHORISED PUBLIC ACCOUNTANTS ... 236
Netcompany Group A/S ... 236
ADDITIONAL INFORMATION ... 237
Name, Registered Office and Date of Incorporation ... 237
Registration ... 237
Objectives of the Company ... 237
Material Subsidiaries ... 237
Information Incorporated by Reference ... 237
General Meetings ... 238
Principal Bankers ... 238
Share Issuing Agent ... 238
GLOSSARY ... 239
FINANCIAL INFORMATION ... F-1
ANNEX A—ARTICLES OF ASSOCIATION OF THE COMPANY ... A-1
ANNEX B—APPLICATION FORM ... B-1

INTRODUCTION

Notice to Investors in the United States

The Offer Shares have not been recommended by any U.S. federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Offering Circular. Any representation to the contrary is a criminal offence in the United States.

In the United States, this Offering Circular is being furnished on a confidential basis solely for the purpose of enabling a prospective investor to consider purchasing the particular securities described herein. The information contained in this Offering Circular has been provided by the Company and other sources identified herein. Distribution of this Offering Circular to any person other than the offeree specified by the Managers or their representatives, and those persons, if any, retained to advise such offeree with respect thereto, is unauthorised, and any disclosure of its contents, without the Company’s prior written consent, is prohibited. Any reproduction or distribution of this Offering Circular in the United States, in whole or in part, and any disclosure of its contents to any other person, is prohibited. This Offering Circular is personal to each offeree and does not constitute an offer to any other person or to the public generally to acquire the Offer Shares.

European Economic Area (“EEA”) Restrictions

In any Member State of the EEA other than Denmark that has implemented the Prospectus Directive, this Offering Circular is only addressed to, and is only directed at, investors in that EEA Member State who fulfil the criteria for exemption from the obligation to publish a prospectus, including qualified investors, within the meaning of the Prospectus Directive as implemented in each such EEA Member State.

This Offering Circular has been prepared on the basis that all offers of Offer Shares, other than the offer contemplated in Denmark, will be made pursuant to an exemption under the Prospectus Directive, as implemented in Member States of the EEA, from the requirement to produce a prospectus for offers of Offer Shares. Accordingly, any person making or intending to make any offer within the EEA of Offer Shares which is the subject of the placement contemplated in this Offering Circular should only do so in circumstances in which no obligation arises for the Company, the Selling Shareholders or any of the Managers to produce a prospectus for such offer. Neither the Company, the Selling Shareholders nor the Managers have authorised, nor do the Company, the Selling Shareholders or the Managers authorise, the making of any offer of Offer Shares through any financial intermediary, other than offers made by Managers which constitute the final placement of Offer Shares contemplated in this Offering Circular.

The Offer Shares have not been, and will not be, offered to the public in any Member State of the European Economic Area that has implemented the Prospectus Directive, excluding Denmark (a “Relevant Member State”). Notwithstanding the foregoing, an offering of the Offer Shares may be made under the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

to any qualified investor as defined in the Prospectus Directive;
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Joint Global Coordinators for any such offer; or
in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of Offer Shares shall result in a requirement for the publication by the Company, the Selling Shareholders or any Manager of a prospectus pursuant to Article 3 of the Prospectus Directive or a supplemental prospectus pursuant to Article 16 of the Prospectus Directive as supplemented by Commission Delegated Regulation (EC) no. 382/2014 of 7 March 2014.

For the purposes of this provision, the expression an “offer to the public” in relation to any Offer Shares in any Relevant Member State means the communication in any form and by any means of sufficient information

on the terms of the Offering and the Offer Shares so as to enable an investor to decide to purchase Offer Shares, as that definition may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State.

United Kingdom Restrictions

Offers of the Offer Shares pursuant to the Offering are only being made to persons in the United Kingdom who are “qualified investors” or otherwise in circumstances which do not require publication by the Company of a prospectus pursuant to section 85(1) of the UK Financial Services and Markets Act 2000.

This Offering Circular is only being distributed to, and is only directed at, and any investment or investment activity to which the Offering Circular relates is available only to, and will be engaged in only with persons who (i) are investment professionals falling within Article 19(5); (ii) fall within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order 2005”); or (iii) are high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts or other persons to whom such investment or investment activity may lawfully be made available (together, “Relevant Persons”). Persons who are not Relevant Persons should not take any action on the basis of the Offering Circular and should not act or rely on it.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the securities that are the subject of the Offering have been subject to a product approval process, which has determined that the Offer Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Managers will only procure investors who meet the criteria of professional clients and eligible counterparties (except for a public offering to investors in Denmark conducted pursuant to a separate prospectus that has been approved by and registered with the Danish FSA).

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to, the Offer Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

RESPONSIBILITY STATEMENT

The Company’s Responsibility

The Company is responsible for this Offering Circular in accordance with Danish law.

The Company’s Statement

We hereby declare that we, as the persons responsible for this Offering Circular on behalf of the Company, have taken all reasonable care to ensure that, to the best of our knowledge and belief, the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of its contents.

Copenhagen, 23 May 2018

Netcompany Group A/S

Board of Directors

Pekka Ala-Pietilä
Chairman

Thomas Broe-Andersen
Deputy Chairman

Pernille Fabricius
Board Member

Juha Christensen
Board Member

Bo Rygaard
Board Member

Carsten Gomard
Board Member

Pekka Ala-Pietilä: Professional board member
Thomas Broe-Andersen: Partner of FSN Capital Partners
Pernille Fabricius: Group Chief Financial Officer of John Guest Group
Juha Christensen: Chairman and Chief Executive Officer of CloudMade
Bo Rygaard: Executive advisor to FSN Capital Partners
Carsten Gomard: Co-founder of the Group and consultant

Executive Management

André Rogaczewski
CEO

Claus Jørgensen
COO

Thomas Johansen
CFO

SUMMARY

Danish Summary

The Danish summary below is a translation of the English summary beginning on page 31. In the event of any discrepancies between the Danish and the English version, the English version shall prevail.

Dansk resumé

Resuméer består af oplysningskrav, der benævnes “Elementer”. Disse Elementer er nummereret i afsnit A—E (A.1—E.7). Dette resumé indeholder alle de Elementer, der skal være indeholdt i et resumé for denne type værdipapir og udsteder i henhold til Prospektforordningen nr. 486/2012 med senere ændringer. Da nogle Elementer ikke kræves medtaget, kan der forekomme huller i nummereringen af Elementerne. Selvom det kræves, at et Element indgår i resuméet på grund af typen af værdipapir og udsteder, er det muligt, at der ikke kan gives nogen relevante oplysninger om Elementet. I så fald indeholder resuméet en kort beskrivelse af Elementet med angivelsen “ikke relevant”.

Afsnit A—Indledning og advarsler
A.1	Advarsel til investorer	Dette resumé bør læses som en indledning til Prospektet.
Enhver beslutning om investering i de Udbudte Aktier bør træffes af investoren på baggrund af Prospektet som helhed.
Hvis en sag vedrørende oplysningerne i Prospektet indbringes for en domstol i henhold til national lovgivning i medlemsstaterne i det Europæiske Økonomiske Samarbejdsområde, kan den sagsøgende investor være forpligtet til at betale omkostningerne i forbindelse med oversættelse af Prospektet, inden sagen indledes.
Kun de personer, som har indgivet resuméet, herunder eventuelle oversættelser heraf, kan ifalde et civilretligt erstatningsansvar, men kun såfremt resuméet er misvisende, ukorrekt eller uoverensstemmende, når det læses sammen med de øvrige dele af Prospektet, eller hvis det ikke, når det læses sammen med Prospektets øvrige dele, indeholder nogleoplysninger som hjælp til investorernes overvejelser om, hvorvidt de vil investere i de Udbudte Aktier.
A.2	Tilsagn til formidlere	Ikke relevant. Der er ikke indgået nogen aftale vedrørende anvendelse af Prospektet i forbindelse med et efterfølgende salg eller en endelig placering af de Udbudte Aktier.
Afsnit B—Udsteder
---	---	---
B.1	Juridisk navn og binavn	Selskabet er registreret med det juridiske navn Netcompany Group A/S og har ingen binavne.
B.2	Domicil, retlig form, indregistreringsland	Selskabet har hjemsted på adressen Grønningen 17, 1. sal, 1270 København K, og blev stiftet i Danmark som et aktieselskab i henhold til dansk ret den 16. april 2018.
B.3	Nuværende virksomhed og hovedaktiviteter	Koncernen arbejder udelukkende med “Next Gen” it-ydelser med fokus på at levere komplekse og forretningskritiske it-løsninger til store kunder i den offentlige og private sektor samt rådgive og støtte dem i deres digitale transformation. Disse løsninger danner grundlaget for kundernes strategi og er således særdeles vigtige for, at de kan udøve og videreudvikle deres kerneforretning. Koncernen har udviklet og standardiseret en yderst differentieret forretningsmodel, som igennem 18 år har vist sin styrke gennem repetérbarhed og skalérbarhed, hvilket gør Koncernen i stand til at levere projekterne inden for aftalt deadline, budget og aftalte ramme. Det unikke

Afsnit B—Udsteder
	kendetegn ved Koncernens forretningsmodel er en integreret salgs- og leverancetilgang, “IT people leading IT people”, en for kunderne meget gennemsigtig og leverancedrevet arbejdsmetode og et højt kvalificeret team af it-fagfolk med en gennemsnitsalder i 2017 på ca. 33 år.

Koncernens forretning består af to primære segmenter, som hver især udgør et regnskabsmæssigt driftssegment:

• Offentlig sektor. I segmentet Offentlig sektor tilbyder Koncernen komplette it-ydelser (herunder udvikling, vedligeholdelse og drift) til nationale og regionale myndigheder, dvs. staten og store kommuner og regioner. Koncernens projekter i den Offentlige sektor består af udvikling og implementering af systemer, der er kritiske for samfundet, herunder opkrævning af skat fra borgerne og afgifter på køretøjer, betaling af offentlige ydelser til borgerne (f.eks. pensioner, kontanthjælp, børne-/familieydelser og ejendomme/boliger), centralregistre for selskaber, ejendomme, medarbejdere samt offentlige selvbetjeningsportaler vedrørende offentlige ydelser, herunder sundhedsportaler. Koncernen anslår, at dens andel af det primære offentlige marked i Danmark (defineret som store og komplekse projekter for staten og udvalgte større kommuner, som efter udviklingsfasen har en stor andel af løbende udgifter til vedligeholdelse og drift) på basis af de samlede årlige it-udgifter udgjorde ca. 6% for regnskabsåret 2016. Omsætningen fra den Offentlige sektor udgjorde henholdsvis 55,3% og 51,6% af Koncernens samlede omsætning for 1. kvartal 2018 og regnskabsåret 2017, og henholdsvis 50,7% og 39,0% af Koncernens justerede EBITA for 1. kvartal 2018 og regnskabsåret 2017.

• Privat sektor. I segmentet Privat sektor tilbyder Koncernen komplette it-ydelser (herunder udvikling, vedligeholdelse og drift) til mellemstore og store virksomheder samt medlemsorganisationer som f.eks. fagforeninger. Koncernen udvikler og implementerer forretningskritiske it-løsninger til en lang række områder som eksempelvis e-handel, fakturering, dokument- og sagshåndtering, systemintegration, customer relationship management (“CRM”) og enterprise risk management (“ERM”), kunstig intelligens og informationssystemer, ofte i kombination med hinanden. Koncernen anslår, at dens andel af det primære private marked i Danmark (defineret som mellemstore og store selskaber med store årlige it-budgetter, selskaber med strategisk fokus på at anvende digitalisering som en konkurrencefordel, samt komplekse projekter, hvor der er behov for avancerede it-kompetencer) på basis af de samlede årlige it-udgifter udgjorde ca. 7% for regnskabsåret 2016. Omsætningen fra den Private sektor udgjorde henholdsvis 44,7% og 48,4% af Koncernens samlede omsætning for 1. kvartal 2018 og regnskabsåret 2017, og henholdsvis 49,3% og 61,0% af Koncernens justerede EBITA for 1. kvartal 2018 og regnskabsåret 2017.

Koncernens it-ydelser dækker alt fra udvikling til vedligeholdelse og drift. Koncernens udviklingsydelser omfatter design, udvikling og implementering af it-løsninger baseret på kundernes krav inden for |

Afsnit B—Udsteder
		digital transformation med henblik på modernisering af systemer, systemdifferentiering og systeminnovationsprojekter. Ydelserne inden for vedligeholdelse og drift omfatter langsigtede effektiviseringstiltag for løbende at vedligeholde, drive og understøtte de it-løsninger, som Koncernen har leveret til kunderne. Pr. 11. maj 2018 havde Koncernen ca. 1.432 medarbejdere på sine hovedmarkeder i Danmark, Norge og Storbritannien (eksklusive freelancere i Danmark og Norge) samt yderligere 319 medarbejdere i Polen og Vietnam.
B.4a	Beskrivelse af de væsentligste nyere tendenser, der påvirker Selskabet og de sektorer, inden for hvilke Selskabet opererer	Tendenser på markedet for “Next Gen” it-ydelser
It-ydelser med fokus på innovation og differentiering
Markedet for it-ydelser er i øjeblikket kendetegnet ved et paradigmeskifte fra traditionelle ydelser med lav værdiskabelse som f.eks. infrastrukturstyring og implementering af økonomistyringssystemer (“ERP”) hen imod ydelser med høj værdiskabelse som digitalisering, udvikling af skræddersyede applikationer og omstrukturering af forretningsgange. Dette skift giver muligheder for tjenesteudbydere med fokus på dette store og hastigt voksende segment, i takt med at organisationer i alle sektorer efterspørger, tilpasser sig og reagerer på de nye digitale muligheder og det effektiviseringspotentiale, som nutidens teknologier åbner op for.

Øget efterspørgsel hos kunderne efter digitaliserede processer, som skaber konkurrencefordele
Kundefokus skifter fra legacy-systemer til Next Gen-systemer som følge af udviklingen og den hurtige accept af nye teknologier samt behovet for at integrere disse systemer med nye digitale løsninger. Med dette skift flyttes fokus væk fra forbedring eller vedligeholdelse af store monolitiske systemer og uflexible dataaktiver til mindre og mere fleksible it-arkitekturer, der giver kunderne en problemfri oplevelse af integrerede analyseværktøjer.

Markedet for Next Gen-it er segmenteret efter graden af processens kompleksitet og innovation
Kunderne anskuer i dag udgifter til it-ydelser ud fra en “pace layered” tilgang, som omfatter følgende tre kategorier: “Grundsystemer, Differentiering og Innovation”. Der forventes inden 2020 at ske et omfattende skift i it-udgifter hen imod Differentiering og Innovation, således at ca. 50% af de samlede it-udgifter i 2020 forventes at være inden for Differentiering og Innovation mod ca. 10% i 2016.

Fokusmarkeder og -segmenter
Offentlig sektor. I den offentlige sektor omfatter kernemarkedet store og komplekse projekter for staten med fokus på at udvikle it-ydelser, der kan understøtte og automatisere det offentlige velfærdssystem, og udvalgte større kommuner, som efter udviklingsfasen har en stor andel af løbende udgifter til vedligeholdelse og drift. Koncernen specialiserer sig i store og komplekse projekter kendetegnet ved deltagelse af flere interessenter og gensidig teknisk afhængighed samt selskaber med behov for innovativt input til innovative eller differentierede projekter samt end-to-end-systemintegration, herunder registreringssystemer.

Privat sektor. I den private sektor består det primære marked af mellemstore og store selskaber med væsentlige årlige it-udgifter, |

Afsnit B—Udsteder
		selskaber med strategisk fokus på at anvende digitalisering som en konkurrencefordel, samt mere specialiserede projekter, hvor der er behov for avancerede it-kompetencer. Koncernen specialiserer sig i meget komplekse og store it-projekter for kunder, som anvender it-ydelser til innovation og til at differentiere sig fra konkurrenterne, samt projekter, der fordrer omfattende udviklingskompetencer.

Koncernen vurderer, at der er yderligere potentiale for at vinde markedsandele på det danske, norske og engelske marked for it-ydelser og fokuserer generelt på markeder med en veludviklet digitaliseringsdagsorden. | |
| B.5 | Beskrivelse af Koncernen og Selskabets plads i Koncernen | Selskabet blev stiftet i april 2018 med henblik på at blive optaget til handel og officiel notering på Nasdaq Copenhagen som moderselskab for Koncernen som led i en omstrukturering, hvorved de Sælgende Aktionærer (som defineret i Prospektet) bliver Selskabets ejere (“IPO-omstruktureringen”). Selskabet har pr. prospektdatoen ingen væsentlige aktiver eller passiver og har ingen driftsaktiviteter, før IPO-omstruktureringen træder i kraft. Selskabet har indgået visse Omstruktureringsaftaler (som defineret i Prospektet) med aktionærerne i Koncernen og visse Koncernenheder, som indeholder bestemmelser om, at IPO-omstruktureringen skal gennemføres i forbindelse med prisfastsættelse og forud for Optagelsen.

Forudsat at Udbudskursen svarer til midtpunktet i Udbudskursintervallet, vil Aktierne efter gennemførelsen af IPO-omstruktureringen og forud for Optagelsen være ejet direkte af de Væsentlige Aktionærer (44,1%), André Rogaczewski Holding ApS (holdingselskab for André Rogaczewski, CEO) (8,5%), Holdingselskabet Claus Jørgensen ApS (holdingselskabet for Claus Jørgensen, COO) (8,5%), Carsten Gomard Holding ApS (holdingselskabet for Carsten Gomard, bestyrelsesmedlem) (4,4%), NC NorthCo AB (holdingselskabet for Gustaf Löfbjerg, landechef for Danmark) (7,6%), Danica Pension, Livsforsikringsaktieselskab (4,6%) og MIP-deltagerne samt Medarbejderaktionærer (22,3%).

Afsnit B—Udsteder
		repræsenterede 100% af Koncernens samlede omsætning og 99,4% af Koncernens samlede EBITDA for 1. kvartal 2018 og 99,9% af Koncernens samlede aktiver pr. 31. marts 2018.
B.6	Personer, som direkte eller indirekte har en andel i udsteders kapital eller stemmerettigheder eller kontrollerer Selskabet	Efter gennemførelsen af IPO-omstruktureringen og forud for Optagelsen ejes Aktierne direkte af de Væsentlige Aktionærer (44,1%), André Rogaczewski Holding ApS (8,5%), Holdingselskabet Claus Jørgensen ApS (8,5%), Carsten Gomard Holding ApS (4,4%), NC NorthCo AB (7,6%), Danica Pension, Livsforsikringsaktieselskab (4,6%) og MIP-deltagerne samt Medarbejderaktionærer (22,3%) (ejerinteresserne er under forudsætning af, at Udbudskursen svarer til midtpunktet i Udbudskursintervallet).

De Væsentlige Aktionærer udgøres af FSN Capital IV L.P., FSN Capital IV Invest LP og FSN Capital IV Netcompany Co-Investment LP, som er limited partnerships stiftet i henhold til lovgivningen i Jersey, og FSN Capital IV (B) LP, som er stiftet i henhold til lovgivningen i England. FSN Capital IV Netcompany Co-Investment L.P. er et direkte fælles investeringsselskab for visse af investorerne i FSN fund IV. FSN Capital GP IV Limited fungerer som general partner for og på vegne af henholdsvis FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. og FSN Capital IV Netcompany Co-Investment LP.

Alle Aktier har samme rettigheder og er ligestillet bl.a. med hensyn til stemmeret.

Bortset fra som anført ovenfor er Selskabet ikke bekendt med nogen person, der direkte eller indirekte ejer en andel af Selskabets aktiekapital eller stemmerettigheder, der skal indberettes efter dansk ret.

For yderligere oplysninger om de Sælgende Aktionærer henvises til afsnit E.5. |
| B.7 | Udvalgte regnskabs- og virksomhedsoplysninger | Nedenstående udvalgte koncernregnskabsoplysninger, bestående af udvalgte resultatopgørelser, balancer og pengestrømsopgørelser for Koncernen, er uddraget af Koncernens Sammendragne Regnskaber og de Sammendragne Delårsregnskaber, som er inkluderet i dette Prospekt. Nedenstående udvalgte Andre Data og Finansielle Nøgletal samt segmentoplysninger og driftsoplysninger er uddraget af Koncernens almindelige registreringer og driftssystemer. |

Afsnit B—Udsteder

	Sammendraget Resultatopgørelse
	1. kvartal		Regnskabsår
	2018	2017	2017	2016¹⁾	2015
	DKK mio.
Omsætning	517,0	332,9	1.416,1	899,6	758,1
Serviceomkostninger	(318,8)	(192,3)	(803,4)	(527,0)	(446,8)
Bruttoresultat	198,2	140,6	612,7	372,6	311,3
Salgs- og
markedsføringsomkostninger	(2,7)	(2,0)	(9,7)	(3,7)	(3,8)
Administrationsomkostninger	(67,7)	(42,8)	(201,0)	(120,9)	(100,1)
Driftsomkostninger	(70,4)	(44,8)	(210,7)	(124,6)	(103,9)
Særlige poster	(7,7)	0	(32,9)	(35,1)	—
EBITA (ikke IFRS)	120,1	95,7	369,0	212,9	207,4
Afskrivninger af immaterielle aktiver	(28,8)	(23,9)	(95,9)	(73,8)	—
EBIT	91,2	71,8	273,2	139,1	207,4
Finansielle poster	(24,7)	(23,9)	(72,2)	(62,7)	0,2
Resultat før skat	66,5	48,0	201,0	76,4	207,6
Skat af periodens resultat	(15,3)	(12,1)	(59,4)	(43,6)	(19,8)
Periodens resultat	51,2	35,9	141,6	32,8	187,8
	1) Som led i transaktionen, hvor de Væsentlige Aktionærer købte en majoritetsandel i Koncernen, købte Koncernen den 1. februar 2016 Netcompany A/S (omdøbt til Netcompany Holding A/S i februar 2018), og NC TopCo A/S blev dets moderholdingselskab. Det sammendragne regnskab for regnskabsåret 2016 består af de sammendragne rapporterede tal for 11 måneder for NC TopCo A/S for perioden fra 1. februar til 31. december 2016 og de rapporterede tal fra den ene måned i januar 2016 for Netcompany A/S (omdøbt til Netcompany Holding I A/S i februar 2018), som samlet udgør Koncernen.
	Organisk omsætning/organisk omsætningsvækst (ikke IFRS)
	1. kvartal		Regnskabsår
	2018	2017	2017	2016	2015
	(DKK mio. medmindre andet er angivet)
Koncern Koncernomsætning	517,0	332,9	1.416,1	899,6	758,1
Effekt af justering for faste valutakurser,
Koncern	3,2	—	4,7	—	—
Effekt af virksomhedskøb, Koncern	(77,1)	(35,1)	(188,8)	(11,7)	—
Organisk Omsætning (ikke IFRS), Koncern	443,2	297,8	1.232,0	887,9	758,1
Organisk Omsætningsvækst (ikke IFRS), Koncern	33,1%	45,3%	37,0%	17,1%	20,5%
Sektor
Omsætning, Offentlig sektor	285,8	152,6	730,2	368,3	311,5
Effekt af justering for faste valutakurser,
Offentlig sektor	1,8	0,0	2,4	—	—
Effekt af virksomhedskøb, Offentlig sektor	(11,8)	(11,4)	(83,5)	(2,8)	—
Organisk Omsætning (ikke IFRS), Offentlig sektor	275,8	141,2	649,1	365,6	311,5
Organisk Omsætningsvækst (ikke IFRS), Offentlig sektor	80,7%	63,7%	76,2%	17,4%	16,8%
Omsætning, Private sektor	231,2	180,3	685,9	531,3	446,6

Afsnit B—Udsteder
		1. kvartal		Regnskabsår
		2018	2017	2017	2016	2015
(DKK mio. medmindre andet er angivet)
Effekt af justering for faste valutakurser, Private sektor	1,4	0,0	2,3	—	—
Effekt af virksomhedskøb, Privat sektor	(65,3)	(23,7)	(105,2)	(9,0)	—
Organisk Omsætning (ikke IFRS), Private sektor	167,4	156,6	583,0	522,3	446,6
Organisk Omsætningsvækst (ikke IFRS), Private sektor Geografisk område	(7,2)%	31,9%	9,7%	16,9%	23,2%
Omsætning, Danmark^{1)}	397,3	297,8	1.220,3	887,9	758,1
Effekt af justering for faste valutakurser, Danmark	—	—	—	—	—
Effekt af virksomhedskøb, Danmark	—	—	—	—	—
Organisk Omsætning (ikke IFRS), Danmark	397,3	297,8	1.220,3	887,9	758,1
Organisk Omsætningsvækst (ikke IFRS), Danmark	33,4%	45,3%	37,4%	17,1%	20,5%
Omsætning, Norge	42,6	35,1	133,9	11,7	—
Effekt af justering for faste valutakurser, Norge	3,2	—	4,7	—	—
Effekt af virksomhedskøb, Norge	—	(35,1)	(126,9)	(11,7)	—
Organisk Omsætning (ikke IFRS), Norge	45,8	—	11,7	—	—
Organisk Omsætningsvækst (ikke IFRS), Norge	30,6%	—	0,0%	—	—
Omsætning, Storbritannien^{2)}	77,1	—	61,9	—	—
Effekt af justering for faste valutakurser, Storbritannien	—	—	—	—	—
Effekt af virksomhedskøb, Storbritannien	77,1	—	(61,9)	—	—
Organisk Omsætning (ikke IFRS), Storbritannien	—	—	—	—	—
Organisk Omsætningsvækst (ikke IFRS), Storbritannien	—	—	—	—	—
1) Omfatter omsætning, effekt af justering for faste valutakurser og virksomhedskøb samt organisk omsætning fra Koncernens danske projekter, herunder omsætning genereret fra Koncernens ressourceenhed i Polen.
2) Omfatter omsætning, effekt af justering for faste valutakurser og virksomhedskøb samt organisk omsætning fra Koncernens britiske projekter, herunder omsætning genereret fra Koncernens ressourceenhed i Vietnam.

Afsnit B—Udsteder
		Balance
		1. kvartal		Regnskabsår
		2018	2017	2017	2016
		DKK mio.
Goodwill	2.108,7	1.883,9	2.108,7	1.883,9	0,0
Andre immaterielle aktiver	465,2	463,6	495,2	488,7	4,1
Immaterielle aktiver	2.573,9	2.347,5	2.603,9	2.372,5	4,1
Indretning af lejede lokaler	4,3	3,1	3,9	2,2	2,1
Udstyr	20,8	15,4	20,0	14,0	6,4
Brugsretssaktiver	26,9	25,2	30,5	25,2	11,9
Materielle anlægsaktiver	52,0	43,8	54,5	41,5	20,4
Andre tilgodehavender	9,9	6,4	8,8	5,4	4,0
Udskudte skatteaktiver	0,7	0,2	0,0	0,2	11,0
Finansielle aktiver	10,6	6,6	8,8	5,6	15,0
Langfristede aktiver	2.636,4	2.397,9	2.667,2	2.419,6	39,5
Tilgodehavender fra salg	318,7	193,6	445,4	258,2	180,3
Tilgodehavender hos koncernenheder	—	0,0	0,0	0,0	97,7
Igangværende arbejder for fremmed regning	301,6	170,7	139,2	110,5	80,9
Andre tilgodehavender	9,3	2,2	11,0	6,8	1,0
Periodeafgrænsningsposter	6,6	6,0	12,3	5,3	5,2
Tilgodehavender	636,1	372,4	607,8	380,8	365,1
Likvide beholdninger	154,2	71,2	194,5	60,0	111,5
Kortfristede aktiver	790,4	443,7	802,3	440,8	476,6
Aktiver	3.426,8	2.841,5	3.469,5	2.860,4	516,1
Aktiekapital	71,7	69,4	71,6	69,3	0,6
Reserve for sikring af pengestrømme	(29,8)	(38,7)	(30,0)	(39,8)	0,0
Valutakursreguleringsreserve	(5,2)	(2,1)	(2,9)	(0,1)	0,0
Reserve for udskudte hedgingomkostninger	13,1	20,9	10,4	18,0	0,0
Overført resultat	1.652,8	1.252,8	1.594,8	1.213,1	299,8
Egenkapital	1.702,6	1.302,3	1.643,9	1.260,5	300,4
Lån	1.167,3	1.175,7	1.264,9	1.178,0	0,0
Leasing	15,0	13,6	17,6	13,6	6,1
Udskudt skatteforpligtelse	116,9	106,1	112,4	111,2	0,0
Langfristede forpligtelser	1.299,2	1.295,4	1.394,9	1.302,8	6,1
Lån	—	0,6	0,0	28,0	0,0
Leasing	12,8	11,7	13,6	11,7	5,8
Modtagne forudbetalinger fra kunder	46,2	19,5	36,2	27,5	27,2
Leverandører af varer og tjenesteydelser	54,3	16,9	50,6	26,8	18,6
Gæld til koncernenheder	—	0,0	0,0	0,0	52,1
Anden gæld	199,9	157,7	223,1	163,3	80,0
Hensatte forpligtelser	30,4	2,5	30,4	8,9	5,0
Skyldig skat	81,4	34,8	76,8	31,0	20,9
Kortfristede forpligtelser	425,0	243,8	430,7	297,1	209,6
Forpligtelser	1.724,2	1.539,2	1.825,6	1.599,9	215,7
Passiver	3.426,8	2.841,5	3.469,5	2.860,4	516,1


	Pengestrømsopgørelse
	1. kvartal		Regnskabsår
	2018	2017	2017	2016^{2)}
	DKK mio.
EBIT	91,2	71,8	273,2	139,1
Afskrivninger	38,5	27,7	129,2	94,2
Ændring i driftskapital	(35,0)	(20,7)	(95,0)	(19,6)
Frit cash flow^{1)}	94,7	78,9	307,3	213,6
Betalt selskabsskat	(10,4)	(19,4)	(35,4)	(34,0)
Finansielle poster	(13,3)	(15,6)	(76,6)	(62,7)
Pengestrømme fra driftsaktiviteter	71,1	43,8	195,3	116,9
Netto pengestrømme fra Koncernen i forbindelse med køb af dattervirksomheder	—	0,0	(120,3)	(2.516,1)
Køb af immaterielle aktiver	—	0,0	(11,1)	(9,2)
Køb af materielle anlægsaktiver	(3,5)	(4,9)	(16,7)	(13,0)
Andre tilgodehavender (indskud)	(1,1)	0,0	(2,3)	(1,5)
Pengestrømme fra investeringsaktiviteter	(4,6)	(4,9)	(150,5)	(2.539,7)
Udbytte	—	0,0	0,0	(116,4)
Provenu fra udstedelse af aktiekapital	6,9	3,9	16,7	1.265,1
Låneprovenu	—	0,0	92,0	1.178,0
Afdrag på gæld	(114,7)	(3,9)	(16,6)	(11,0)
Pengestrømme fra finansieringsaktiviteter	(107,7)	(0,0)	92,2	2.315,7
Nettopengestrømme	(41,2)	38,9	137,0	(107,0)
Likvider, primo	194,5	32,0	32,0	111,5
Overtagne likvidbalancer	—	0,0	26,3	27,6
Indvirkning af valutakursændringer på udestående likvider denomineret i udenlandsk valuta	(1,0)	(0,2)	(0,8)	(0,1)
Likvider, ultimo	154,2	70,7	194,5	32,0
1) Frit cash flow defineres som pengestrømme fra driftsaktiviteter fratrukket pengestrømme fra betalt selskabsskat, finansielle poster og investeringsaktiviteter.
Sammenligning af Koncernens resultater for 1. kvartal 2018 og 1. kvartal 2017
Omsætningen steg med DKK 184,1 mio., svarende til 55,3%, fra DKK 332,9 mio. i 1. kvartal 2017 til DKK 517,0 mio. i 1. kvartal 2018, primært som følge af vækst i omsætningen i Danmark og Norge samt købet af Hunter Macdonald Ltd. Den organiske vækst i 1. kvartal 2018 kunne henføres til væsentlige udbud vundet i den Offentlige sektor i 2015, 2016 og 2017, som Koncernen arbejdede på i 1. kvartal 2018.
Omsætningen fra segmentet Offentlig sektor udgjorde henholdsvis 55,3% og 45,8% af Koncernens samlede omsætning for 1. kvartal

Afsnit B—Udsteder
	2018 og 2017. Omsætningen fra segmentet Privat sektor udgjorde henholdsvis 44,7% og 54,2% af Koncernens samlede omsætning for 1. kvartal 2018 og 2017.

• Omsætningen fra segmentet Offentlig sektor steg med DKK 133,2 mio., svarende til 87,3%, fra DKK 152,6 mio. i 1. kvartal 2017 til DKK 285,8 mio. i 1. kvartal 2018. Den organiske omsætningsvækst udgjorde 80,7%, som primært kunne henføres til væsentlige udbud vundet i den danske Offentlige sektor i 2015, 2016 og 2017, som Koncernen arbejdede på i 1. kvartal 2018. Af omsætningen fra segmentet Offentlig sektor på DKK 285,8 mio. i 1. kvartal 2018 kunne DKK 11,8 mio. henføres til Hunter Macdonald Ltd. Justeret for købet af Hunter Macdonald Ltd, som blev gennemført den 25. oktober 2017, ville omsætningen fra segmentet Offentlig sektor for 1. kvartal 2017 have været DKK 152,6 mio.

• Omsætningen fra segmentet Privat sektor steg med DKK 50,9 mio., svarende til 28,2%, fra DKK 180,3 mio. i 1. kvartal 2017 til DKK 231,2 mio. i 1. kvartal 2018. Den organiske omsætning faldt med 7,2%, hvilket i vid udstrækning kunne henføres til det øgede fokus på segmentet Offentlig sektor, som har krævet, at en stor del af den danske, polske og norske arbejdsstyrke gennemførte og leverede disse projekter. Af omsætningen fra segmentet Privat sektor på DKK 231,2 mio. i 1. kvartal 2018 kunne DKK 65,3 mio. henføres til Hunter Macdonald Ltd. Justeret for købet af Hunter Macdonald Ltd, som blev gennemført den 25. oktober 2017, ville omsætningen fra segmentet Privat sektor for 1. kvartal 2017 have været DKK 180,3 mio.

Justeret EBITA steg med DKK 32,1 mio., svarende til 33,5%, fra DKK 95,7 mio. i 1. kvartal 2017 til DKK 127,8 mio. i 1. kvartal 2018, primært som følge af den stigende omsætning. Den justerede EBITA-margin faldt fra 28,8% i 1. kvartal 2017 til 24,7% i 1. kvartal 2018, primært som følge af højere omkostninger i Storbritannien som følge af den højere andel af underleverandører, der anvendes i Storbritannien sammenlignet med i Danmark og Norge. Som følge heraf faldt bruttomarginen fra 42,2% i 1. kvartal 2017 til 38,3% i 1. kvartal 2018.

Sammenligning af Koncernens resultater for regnskabsårene 2017 og 2016

Omsætningen steg med DKK 516,5 mio., eller 57,4%, fra DKK 899,6 mio. i 2016 til DKK 1.416,1 mio. i 2017, primært som følge af organisk vækst i Danmark på DKK 332,4 mio. i forhold til DKK 129,8 mio. i 2016 samt meromsætning på DKK 133,9 mio. og DKK 61,9 mio. som følge af købet af henholdsvis Mesan AS og Hunter Macdonald Ltd. Den organiske vækst i 2017 skyldtes væsentlige udbud i den Offentlige sektor i 2015 og 2016, som Koncernen arbejde på i 2017, samt yderligere vundne udbud i den Offentlige sektor i 2017, fra de respektive konsolideringsdatoer.

Omsætningen fra segmentet Offentlig sektor udgjorde henholdsvis 51,6% og 40,9% af Koncernens samlede omsætning for regnskabsårene 2017 og 2016. Omsætningen fra segmentet Privat sektor udgjorde henholdsvis 48,4% og 59,1% af Koncernens samlede omsætning for regnskabsårene 2017 og 2016. |

Afsnit B—Udsteder
	• Omsætningen fra segmentet Offentlig sektor steg med DKK 361,8 mio., eller 98,2%, fra DKK 368,3 mio. i regnskabsåret 2016 til DKK 730,2 mio. i regnskabsåret 2017. Den organiske omsætningsvækst udgjorde i regnskabsårene 2017 og 2016 henholdsvis 76,2% og 17,4%, primært drevet af de store offentlige udbud, som Koncernen vandt i Danmark i 2016 og 2017. Af omsætningen fra segmentet Offentlig sektor på DKK 730,2 mio. i regnskabsåret 2017 kunne DKK 30,9 mio. henføres til Hunter Macdonald Ltd. Justeret for købet af Hunter MacDonald Ltd, som blev gennemført den 25. oktober 2017, ville omsætningen fra segmentet Offentlig sektor for regnskabsåret 2017 have været DKK 699,2 mio. • Omsætningen fra segmentet Privat sektor steg med DKK 154,6 mio., eller 29,1%, fra DKK 531,3 mio. i regnskabsåret 2016 til DKK 685,9 mio. i regnskabsåret 2017. Den organiske omsætningsvækst udgjorde henholdsvis 9,7% og 16,9% for regnskabsårene 2017 og 2016, hvilket primært kunne henføres til kontraktfornyelse hos en lang række af Koncernens store danske kunder, samt at Koncernen vandt nye store kundekontrakter i perioderne. Af omsætningen fra segmentet Privat sektor på DKK 685,9 mio. i regnskabsåret 2017 kunne DKK 30,9 mio. henføres til Hunter Macdonald Ltd. Justeret for købet af Hunter MacDonald Ltd, som blev gennemført den 25. oktober 2017, ville omsætningen fra segmentet Privat sektor for regnskabsåret 2017 have været DKK 655,0 mio. Justeret EBITA steg med DKK 153,9 mio., eller 62,1%, fra DKK 248,0 mio. i 2016 til DKK 402,0 mio. i 2017, primært som følge af det højere aktivitetsniveau i 2017. Derudover blev marginerne forbedret som følge af fortsat driftsmæssig effektivitet ved levering af projekter.

Afsnit B—Udsteder

• Omsætningen fra segmentet Offentlig sektor steg med DKK 361,8 mio., eller 98,2%, fra DKK 368,3 mio. i regnskabsåret 2016 til DKK 730,2 mio. i regnskabsåret 2017. Den organiske omsætningsvækst udgjorde i regnskabsårene 2017 og 2016 henholdsvis 76,2% og 17,4%, primært drevet af de store offentlige udbud, som Koncernen vandt i Danmark i 2016 og 2017. Af omsætningen fra segmentet Offentlig sektor på DKK 730,2 mio. i regnskabsåret 2017 kunne DKK 30,9 mio. henføres til Hunter Macdonald Ltd. Justeret for købet af Hunter MacDonald Ltd, som blev gennemført den 25. oktober 2017, ville omsætningen fra segmentet Offentlig sektor for regnskabsåret 2017 have været DKK 699,2 mio. • Omsætningen fra segmentet Privat sektor steg med DKK 154,6 mio., eller 29,1%, fra DKK 531,3 mio. i regnskabsåret 2016 til DKK 685,9 mio. i regnskabsåret 2017. Den organiske omsætningsvækst udgjorde henholdsvis 9,7% og 16,9% for regnskabsårene 2017 og 2016, hvilket primært kunne henføres til kontraktfornyelse hos en lang række af Koncernens store danske kunder, samt at Koncernen vandt nye store kundekontrakter i perioderne. Af omsætningen fra segmentet Privat sektor på DKK 685,9 mio. i regnskabsåret 2017 kunne DKK 30,9 mio. henføres til Hunter Macdonald Ltd. Justeret for købet af Hunter MacDonald Ltd, som blev gennemført den 25. oktober 2017, ville omsætningen fra segmentet Privat sektor for regnskabsåret 2017 have været DKK 655,0 mio. Justeret EBITA steg med DKK 153,9 mio., eller 62,1%, fra DKK 248,0 mio. i 2016 til DKK 402,0 mio. i 2017, primært som følge af det højere aktivitetsniveau i 2017. Derudover blev marginerne forbedret som følge af fortsat driftsmæssig effektivitet ved levering af projekter.

Sammenligning af Koncernens resultater for regnskabsårene 2016 og 2015

Omsætningen steg med DKK 141,5 mio., eller 18,7%, fra DKK 758,1 mio. i 2015 til DKK 899,6 mio. i 2016, drevet af en omsætningsfremgang på DKK 56,9 mio. i segmentet Offentlig sektor og en fremgang på DKK 84,6 mio. i segmentet Privat sektor.

Omsætningen fra segmentet Offentlig sektor udgjorde henholdsvis 40,9% og 41,1% af Koncernens samlede omsætning for regnskabsårene 2016 og 2015. Omsætningen fra segmentet Privat sektor udgjorde henholdsvis 59,1% og 58,9% af Koncernens samlede omsætning for regnskabsårene 2016 og 2015.

• Omsætningen fra segmentet Offentlig sektor steg med DKK 56,9 mio., eller 18,3%, fra DKK 311,5 mio. i regnskabsåret 2015 til DKK 368,3 mio. i regnskabsåret 2016. Den organiske omsætningsvækst udgjorde henholdsvis 17,4% og 16,8% i regnskabsårene 2016 og 2015. Af omsætningen fra segmentet Offentlig sektor på DKK 368,3 mio. i regnskabsåret 2016 kunne DKK 2,8 mio. henføres til Mesan AS. Justeret for købet af Mesan AS, som blev gennemført den 22. november 2016, ville omsætningen fra segmentet Offentlig sektor for regnskabsåret 2016 have været DKK 365,6 mio. |

Afsnit B—Udsteder
		• Omsætningen fra segmentet Privat sektor steg med DKK 84,6 mio., eller 19,0%, fra DKK 446,6 mio. i regnskabsåret 2015 til DKK 531,3 mio. i regnskabsåret 2016. Den organiske omsætningsvækst udgjorde henholdsvis 16,9% og 23,2% i regnskabsårene 2016 og 2015. Af omsætningen fra segmentet Privat sektor på DKK 531,3 mio. i regnskabsåret 2016 kunne DKK 9,0 mio. henføres til Mesan AS. Justeret for købet af Mesan AS, som blev gennemført den 22. november 2016, ville omsætningen fra segmentet Privat sektor for regnskabsåret 2016 have været DKK 522,3 mio.

Justeret EBITA steg med DKK 40,7 mio., eller 19,6%, fra DKK 207,4 mio. i 2015 til DKK 248,0 mio. i 2016 som følge af den forbedrede bruttomargin og en lavere stigning i administrations-, salgs- og markedsføringsomkostninger i forhold til stigningen i Koncernens omsætning.

Der er pr. prospektdatoen ikke sket nogen væsentlig ændringer i Koncernens finansielle stilling og resultat siden 31. marts 2018. |
| B.8 | Udvalgte vigtige proforma- regnskabsoplysninger | Ikke relevant. Prospektet indeholder ingen proforma- regnskabsoplysninger, da der ikke har været nogen transaktioner, som medfører en væsentlig (defineret som mere end 25%) bruttoændring i relevante nøgletal som f.eks. balancesum, nettoomsætning eller nettoresultat. |
| B.9 | Resultatforventninger eller -prognoser | Med hensyn til de fremadrettede konsoliderede finansielle oplysninger for regnskabsåret 2018 har Koncernen et mål om rapporteret omsætning i den øvre ende af intervallet mellem DKK 1.940 mio. og DKK 2.011 mio. (svarende til omsætningsvækst i den øvre ende af intervallet mellem 37% og 42%), vækst i organisk omsætning i den øvre ende af intervallet mellem 20% og 25%, et resultat før skat på mellem DKK 213 mio. og DKK 282 mio. (svarende til en EBT-margin på mellem 11% og 14%) og en justeret EBITA-margin på mellem 24,5% og 27,5%. Koncernen anslår, at særlige poster vil udgøre mellem DKK 30 mio. og DKK 35 mio. i 2018.

For så vidt angår prognoser for Koncernens mellemlange finansielle mål for treårs-perioden, der slutter den 31. december 2021 har Koncernen et mål om en rapporteret omsætningsvækst på mellem 20% og 25%, en årlig organisk omsætningsvækst på mellem 20% og 25%, en EBT-margin i intervallet fra de lave til medium 20%’ere senest i 2021 samt en EBITA-margin i intervallet fra medium til høje 20%’ere senest i 2021. |
| B.10 | Forbehold i revisionspåtegningen vedrørende historiske finansielle oplysninger | Ikke relevant. Revisionspåtegningerne på de historiske regnskabsoplysninger i Prospektet er afgivet uden forbehold. |
| B.11 | Forklaring, hvis Selskabets arbejdskapital ikke er tilstrækkelig til at dække Selskabets nuværende behov | Ikke relevant. Det er Koncernens opfattelse, at den arbejdskapital, som er til rådighed for Koncernen på tidspunktet for IPO-omstruktureringens gennemførelse, er tilstrækkelig til at dække det nuværende kapitalbehov i en periode på 12 måneder efter prospektdatoen. Koncernens arbejdskapital og dens behov herfor er knyttet direkte til gennemførelsen af Refinansieringen, som er betinget af Udbuddets gennemførelse. |

Afsnit C—Værdipapirer
C.1	En beskrivelse af typen og klassen af Udbudte Aktier, herunder fondskode	Aktierne, herunder de Udbudte Aktier, er ikke inddelt i aktieklasser.
Permanent ISIN-kode for Aktierne: DK0060952919
C.2	Valuta for de Udbudte Aktier	De Udbudte Aktier vil være denomineret i danske kroner (“DKK”).
C.3	Antallet af udstedte og fuldt indbetalte Aktier og af udstedte, men ikke fuldt indbetalte Aktier	Efter gennemførelse af IPO-omstruktureringen har Selskabets aktiekapital en nominel værdi på DKK 50.000.000 fordelt på 50.000.000 stk. Aktier a DKK 1 eller multipla heraf, som alle vil være udstedt og fuldt indbetalt.
C.4	En beskrivelse af Aktiernes rettigheder	Alle Aktier, herunder de Udbudte Aktier, har samme rettigheder, og de Udbudte Aktier er ligestillet med alle andre Aktier med hensyn til stemmeret, fortegningsret, indløsning, konvertering og restriktioner eller begrænsninger i henhold til Selskabets vedtægter (“Vedtægterne”) eller med hensyn til ret til udbytte eller provenu i tilfælde af opløsning eller likvidation. I henhold til Vedtægterne er ingen Aktier omfattet af særlige rettigheder, restriktioner eller begrænsninger.

Hvert aktiebeløb med en nominel værdi på DKK 1 giver én stemme på Selskabets generalforsamling samt ret til at modtage udloddet udbytte.

Enhver aktionær har ret til at få behandlet et bestemt emne på generalforsamlingen, såfremt aktionæren skriftligt fremsætter krav derom over for Bestyrelsen senest seks uger før generalforsamlingen. |
| C.5 | En beskrivelse af eventuelle indskrænkninger i Aktiernes omsættelighed | Ikke relevant. Aktierne er omsætningspapirer, og der gælder ingen indskrænkninger i Aktiernes omsættelighed i henhold til Vedtægterne eller dansk lovgivning. |
| C.6 | Optagelse til handel på et reguleret marked | Aktierne er søgt optaget til handel og officiel notering på Nasdaq Copenhagen under symbolet “NETC”. Optagelsen er bl.a. betinget af gennemførelse af IPO-omstruktureringen, Nasdaq Copenhagens godkendelse af spredningen af de Udbudte Aktier, at Udbuddet ikke trækkes tilbage før afviklingen, og at Selskabet offentliggør en meddelelse herom.

Hvis Udbuddet lukkes før den 6. juni 2018, vil Optagelsen, Afviklingsdatoen og Aktiernes første handels- og officielle noteringsdag på Nasdaq Copenhagen blive fremrykket tilsvarende.

Betaling for og afvikling af de Udbudte Aktier forventes at finde sted omkring den 11. juni 2018. Første handels- og officielle noteringsdag for Aktierne på Nasdaq Copenhagen i den permanente ISIN-kode forventes at være den 7. juni 2018, betinget af at Udbuddet ikke trækkes tilbage før afvikling og gennemførelse af Udbuddet. |
| C.7 | En beskrivelse af udbyttepolitik | Selskabet agter aktuelt at anvende sine tilgængelige finansielle ressourcer og frie cash flow til at afdrage på Koncernens gæld og investere i fortsat fremtidig vækst, og derfor forventer Selskabet ikke at udbetale udbytte i 2018 eller 2019.

En eventuel fremtidig beslutning om at foreslå udbytte samt størrelsen og den tidsmæssige placering heraf vil blive truffet af Bestyrelsen og afhænger af en række forhold, herunder fremtidig indtjening, resultat, finansielle forhold, generelle samfundsøkonomiske og forretningsmæssige forhold og fremtidsudsigter samt andre forhold, som Bestyrelsen måtte finde |

Afsnit C—Værdipapirer
		relevante, samt øvrige myndigheds- og lovgivningsmæssige krav. Der kan ikke gives sikkerhed for, at Koncernens resultater vil give mulighed for at overholde udbyttepolitikken, og især kan Selskabets mulighed for at betale udbytte blive forringet, hvis nogen af de risici, der er beskrevet i dette Prospekt, skulle indtræffe. Endvidere kan Selskabets udbyttepolitik blive ændret, idet Bestyrelsen fra tid til anden vil genoverveje den. Der kan ikke gives sikkerhed for, at der vil blive foreslået eller deklareret udbytte i et givent år.

Som alternativ eller i tillæg til udbyttebetalinger kan Bestyrelsen iværksætte aktietilbagekøb. |
| Afsnit D—Risici | | |
| --- | --- | --- |
| D.1 | Nøgleoplysninger om de vigtigste risici, der er specifikke for Selskabet eller dennes branche | De nedenfor omtalte risikofaktorer og usikkerheder omfatter de risici, som Koncernens ledelse på nuværende tidspunkt vurderer som værende væsentlige, men det er ikke de eneste risikofaktorer og usikkerheder, Koncernen er eksponeret mod. Der er yderligere risikofaktorer og usikkerheder, herunder risici som Koncernen på nuværende tidspunkt ikke er bekendt med, eller som ledelsen på nuværende tidspunkt anser for uvæsentlige, som kan opstå eller blive væsentlige i fremtiden, og som kan føre til et fald i de Udbudte Aktiers værdi, og til at hele eller en del af det investerede beløb mistes. Risikofaktorerne er ikke nævnt i prioriteret rækkefølge efter vigtighed eller sandsynlighed.

• Hvis der opstår fejl i en kundes infrastruktur eller applikationer som følge af, eller påstået følge af, Koncernens it-ydelser, kan det medføre bøder eller omfattende erstatningskrav samt afkræve udbedrende handlinger og/eller markant skade på Koncernens omdømme.

• Koncernens evne til at tiltrække og fastholde såvel it-fagfolk som kunder afhænger af Koncernens omdømme i markedet. Negativ medieomtale og offentlig omtale kan få negativ indvirkning på Koncernens virksomhed og kursen på Aktierne.

• Koncernens succes afhænger af ledelsesgruppen, højt kvalificerede it-fagfolk og konsulenter, evnen til at rekruttere, tiltrække, motivere, fastholde og videreuddanne sådanne medarbejdere, og Koncernens lønninger er påvirket af løninflation.

• Koncernen vil måske ikke være i stand til at beskytte sig mod cybertrusler, som potentielt kan få væsentlig indvirkning på Koncernen og dens kunders ydelser.

• Koncernen vil måske ikke have held til at identificere, købe eller integrere andre virksomheder eller teknologier.

• Hvis Koncernen ikke formår at styre og fastholde sin vækst, kan det få opsættende indvirkning på virksomheden og reducere dens lønsomhed.

• Hvis Koncernen eller dens kunder ikke præcist vurderer de fornødne ressourcer til kontrakter med fast honorar eller kontrakter med degressive prismodeller, kan den samlede værdi af dens kontrakter blive lavere end forventet, og hvis Koncernens prissætning ikke forudser omkostningerne og kompleksiteten ved at udføre arbejdet, kan Koncernens kontrakter vise sig at være urentable. |

Afsnit D—Risici
	• Ændringer i love og regler eller ændret fortolkning eller håndhævelse af sådanne love og regler kan nogle gange være uforudsigelige, hvilket kan få negativ indvirkning på Koncernens virksomhed. Særligt kan ændringer i dansk skattelovgivning, regler om privatlivets fred og databeskyttelse og nationale sikkerhedsregler, hvis de vedtages, få negativ indvirkning på Koncernens virksomhed. • Manglende overholdelse af regler om privatlivets fred og databeskyttelse eller manglende beskyttelse af fortrolige oplysninger kan skade Koncernens omdømme og føre til retssager og/eller andre juridiske og lovgivningsmæssige tiltag og/eller sanktioner. • Koncernen og dennes kunder er underlagt omfattende lovgivningsmæssige, branchemæssige og erhvervsmæssige krav, og Koncernen eller dens medarbejdere kan ubevidst overtræde bestemte love og krav som følge af Koncernens hastige vækst. • Koncernen er underlagt risikoen for, at kunderne nedbringer deres udgifter til it. • Omdannelsen til et børsnoteret selskab vil øge Koncernens omkostninger og kan forstyrre den daglige drift af virksomheden og kræve tilpasning af visse politikker, arbejdsgange og strategier. • Negative begivenheder, der påvirker EU’s stabilitet og position som et indre marked kan få negativ indvirkning på globale økonomiske forhold og finansielle markeder og på Koncernens virksomhed. • De markeder, hvor Koncernen har aktiviteter, er meget konkurrenceprægede, og Koncernen vil måske ikke kunne konkurrere effektivt. • Koncernens driftsresultat kan blive negativt påvirket, hvis den ikke er i stand til at tilpasse, udvide og udvikle sine it-ydelser i takt med ændringer i teknologi, kundenes efterspørgsel eller markedets udvikling. • Koncernens succes afhænger af dens evne til at fastholde kunder og vinde yderligere opgaver fra eksisterende kunder. • Koncernens arbejde med kunder i den Offentlige sektor udsætter Koncernen for de yderligere risici, der gælder for kontraktindgåelse i den Offentlige sektor. • Hvis en kunde i den Offentlige sektor efter et udbud, som Koncernen vinder, beslutter at tildele Koncernen kontrakten, kan en sådan beslutning blive anfægtet ved administrative nævn og eller domstolene, og det er usikkert, hvorvidt Koncernen vil være i stand til at forsvarer sig mod en sådan anfægtelse. • Koncernens forsikringsdækning vil muligvis ikke være tilstrækkelig. • Koncernen vil måske skulle afholde yderligere omkostninger som følge af brugen af underleverandører, og vil måske være ansvarlig for deres fejl. • Koncernen risikerer at ifølge ansvar, hvis dens strategiske samarbejdspartnere, leverandører eller tjenesteudbydere ikke opfylder deres forpligtelser eller ikke leverer deres projektbidrag til tiden, eller overhovedet.

Afsnit D—Risici

• Ændringer i love og regler eller ændret fortolkning eller håndhævelse af sådanne love og regler kan nogle gange være uforudsigelige, hvilket kan få negativ indvirkning på Koncernens virksomhed. Særligt kan ændringer i dansk skattelovgivning, regler om privatlivets fred og databeskyttelse og nationale sikkerhedsregler, hvis de vedtages, få negativ indvirkning på Koncernens virksomhed. • Manglende overholdelse af regler om privatlivets fred og databeskyttelse eller manglende beskyttelse af fortrolige oplysninger kan skade Koncernens omdømme og føre til retssager og/eller andre juridiske og lovgivningsmæssige tiltag og/eller sanktioner. • Koncernen og dennes kunder er underlagt omfattende lovgivningsmæssige, branchemæssige og erhvervsmæssige krav, og Koncernen eller dens medarbejdere kan ubevidst overtræde bestemte love og krav som følge af Koncernens hastige vækst. • Koncernen er underlagt risikoen for, at kunderne nedbringer deres udgifter til it. • Omdannelsen til et børsnoteret selskab vil øge Koncernens omkostninger og kan forstyrre den daglige drift af virksomheden og kræve tilpasning af visse politikker, arbejdsgange og strategier. • Negative begivenheder, der påvirker EU’s stabilitet og position som et indre marked kan få negativ indvirkning på globale økonomiske forhold og finansielle markeder og på Koncernens virksomhed. • De markeder, hvor Koncernen har aktiviteter, er meget konkurrenceprægede, og Koncernen vil måske ikke kunne konkurrere effektivt. • Koncernens driftsresultat kan blive negativt påvirket, hvis den ikke er i stand til at tilpasse, udvide og udvikle sine it-ydelser i takt med ændringer i teknologi, kundenes efterspørgsel eller markedets udvikling. • Koncernens succes afhænger af dens evne til at fastholde kunder og vinde yderligere opgaver fra eksisterende kunder. • Koncernens arbejde med kunder i den Offentlige sektor udsætter Koncernen for de yderligere risici, der gælder for kontraktindgåelse i den Offentlige sektor. • Hvis en kunde i den Offentlige sektor efter et udbud, som Koncernen vinder, beslutter at tildele Koncernen kontrakten, kan en sådan beslutning blive anfægtet ved administrative nævn og eller domstolene, og det er usikkert, hvorvidt Koncernen vil være i stand til at forsvarer sig mod en sådan anfægtelse. • Koncernens forsikringsdækning vil muligvis ikke være tilstrækkelig. • Koncernen vil måske skulle afholde yderligere omkostninger som følge af brugen af underleverandører, og vil måske være ansvarlig for deres fejl. • Koncernen risikerer at ifølge ansvar, hvis dens strategiske samarbejdspartnere, leverandører eller tjenesteudbydere ikke opfylder deres forpligtelser eller ikke leverer deres projektbidrag til tiden, eller overhovedet.

Afsnit D—Risici
	• Koncernens it-ydelser vil måske krænke tredjeparters immaterielle rettigheder, og Koncernen kan miste muligheden for at benytte tredjeparters immaterielle rettigheder.
• Den omfattende brug af Koncernens Modulus-platform hos, og den høje markedsandel blandt, fagforeninger udsætter Koncernen for risikoen for, at konkurrenterne udvikler en platform, som fagforeningerne vil foretrække i stedet for Modulus.
• En væsentlig del af Koncernens omsætning afhænger af et begrænset antal kunder.
• Koncernens hastigt stigende markedsandel i visse områder kan medføre, at kunderne, særligt i den Offentlige sektor, vil lægge flere opgaver ud til Koncernens konkurrenter for at sprede opgaverne, og konkurrenceregler eller -myndigheder kan begrænse Koncernens evne til at vækste og tvinge Koncernen til at ændre sin forretningspraksis.
• Hvis Koncernen ikke er i stand til at opkræve betaling for sine ydelser eller inddrive sine tilgodehavender, kan det få væsentlig negativ indvirkning på dens resultat og pengestrømme.
• Eventuelle forstyrrelser i driften af datacentraler eller nedbrud på telekommunikationssystemer kan negativt påvirke Koncernens evne til at levere sine it-ydelser, skade dens omdømme eller på anden måde få negativ indvirkning på Koncernens virksomhed.
• Synligheden af Koncernens omsætning er med forbehold for visse antagelser og estimater, og den forventede omsætning vil måske ikke blive realiseret fuldt ud.
• Koncernen kan få udfordringer med at levere komplekse og store projekter til kunderne, hvilket kan føre til tab af forretning og skade på omdømme.
• Hvis Koncernen ikke fastholder sin kapacitetsudnyttelse, kan det få negativ indvirkning på dens marginer.
• Koncernens fremtidige resultater kan afvige væsentligt fra det, der er udtrykt eller underforstået i prognosen for Koncernens finansielle oplysninger og prognoser for Koncernens finansielle mål på mellemlangt sigt indeholdt i dette Prospekt, og investor bør ikke tillægge disse oplysninger for megen vægt.
• I koncernbalancen indgår goodwill og immaterielle aktiver fra virksomhedskøb med væsentlige beløb, og der er risiko for, at en væsentlig del af disse aktiver kan blive nedskrevet.
• Koncernen vil måske ikke kunne opnå finansiering eller garantifaciliteter på favorable vilkår, om overhovedet, eller opfylde sine betalingsforpligtelser som følge af utilstrækkelig likviditet.
• Koncernens brug af gearing og evne til at pådrage sig yderligere gæld kan potentielt få væsentlig negativ indvirkning på dens evne til at opnå yderligere finansiering eller gøre den mere sårbar i tilfælde af et fald i forretningsaktivitet eller økonomien som helhed.
• Koncernens Nye Faciliteter indeholder, og dens fremtidige gældsaftaler vil kunne indeholde, bestemmelser, som potentielt

Afsnit D—Risici
		begrænser Koncernens likviditet og fleksibilitet med hensyn til at opnå yderligere finansiering, foretage virksomhedskøb eller andre forretningsmæssige aktiviteter eller dens evne til at deklarere udbytte til aktionærerne.

• Koncernen er afhængig af at kunne beskytte sin egenudviklede teknologi og immaterielle rettigheder, og beskyttelsesforanstaltninger kan være omkostnings- og tidskrævende, og vil måske ikke falde ud til Koncernens fordel.

• Koncernen kan blive inddraget i retssager, som, hvis de ikke falder ud til Koncernens fordel, kan skade virksomheden, dens omdømme, resultat, finansielle stilling og fremtidsudsigter.

• Koncernens internationale aktiviteter er underlagt visse risici, der er naturligt forbundet med internationale forretninger.

• Nogle af Koncernens kundekontrakter indeholder bestemmelser om ændring af kontrol, som potentielt kan blive udløst af Udbuddet eller en efterfølgende ændring af kontrollen.

• Koncernen kan miste sin certificering til at foretage it-revision eller lide skade, hvis den ikke er i stand til rettidigt at opnå ny certificering til it-revision.

• Koncernens driftsresultat kan blive væsentligt negativt påvirket af udsving i valutakurser eller begrænsninger i Koncernens evne til at omveksle midler til sine driftsvalutaer.

• Renteudsving kan få væsentlig negativ indvirkning på Koncernens virksomhed, resultat, finansielle stilling og pengestrømme. |
| D.3 | Nøgleoplysninger om de vigtigste risici vedrørende de Udbudte Aktier | • Efter Udbuddet vil de Væsentlige Aktionærer fortsat være større aktionærer og kan kontrollere eller på anden måde påvirke Koncernens vigtige dispositioner.

• Der er en begrænset mængde Aktier i fri handel.

• Aktierne har ikke tidligere været handlet offentligt, og kursen kan være volatil og variere.

• Fremtidige salg af Aktier efter Udbuddet kan medføre et fald i Aktiernes markedskurs.

• Udstedelsen af yderligere Aktier i Selskabet i forbindelse med fremtidige virksomhedskøb, et eventuelt aktieincitaments- eller aktieoptionsprogram m.v. kan udvande alle øvrige aktiebesiddelser.

• Selskabet vil måske ikke være i stand til eller kan beslutte ikke at udbetale udbytte på niveau med aktionærernes forventninger, hvilket kan reducere investors afkast på Aktierne.

• Amerikanske og andre udenlandske aktionærer vil muligvis ikke kunne deltage i fremtidige aktieudbud.

• Udbuddet kan blive tilbagekaldt efter, at Aktierne er optaget til handel og officiel notering, og indtil der er sket afvikling af Udbuddet. |

Afsnit E—Udbud
E.1	Udbuddets samlede nettoprovenu og anslåede udgifter	Koncernen modtager intet provenu i forbindelse med de Sælgende Aktionærers salg af Udbudte Aktier i Udbuddet.

De samlede omkostninger i forbindelse med Udbuddet, som Koncernen skal betale til Emissionsbankerne, andre rådgiverhonorarer samt omkostninger og honorarer forbundet med Refinansieringen, skønnes at udgøre ca. DKK 50 mio., hvoraf DKK 17,5 mio. var omkostninger i regnskabsåret 2017. Desuden skal visse omkostninger i forbindelse med Udbuddet, herunder provisioner og honorarer (faste og diskretionære), der skal betales til Emissionsbankerne, betales af de Sælgende Aktionærer beregnet forholdsmæssigt i forhold til det antal Udbudte Aktier, der sælges i Udbuddet.

De Sælgende Aktionærer har endvidere indgået aftale om at betale en salgsprovision til kontoførende institutter (dog undtaget Emissionsbankerne) svarende til 0,25% af Udbudskursen på de Udbudte Aktier, der tildeles til købsordrer for beløb til og med DKK 3 mio. afgivet gennem de kontoførende institutter (undtagen Emissionsbankerne), der betales af de Sælgende Aktionærer beregnet forholdsmæssigt i forhold til det antal Udbudte Aktier, der sælges. |
| E.2a | Baggrund for Udbuddet og anvendelse af provenu, forventet nettoprovenu | Udbuddet forventes at understøtte Koncernens driftsmæssige strategi, styrke Selskabets offentlige og kommercielle profil og give bedre adgang til de offentlige kapitalmarkeder og en bred kreds af nye danske og internationale aktionærer. Koncernen vurderer, at disse faktorer yderligere vil styrke dens konkurrenceevne i forhold til andre it-serviceselskaber samt udgøre en passende platform for Koncernens fremtidige udvikling.

Koncernen modtager ikke nogen del af provenuet fra salget af de Udbudte Aktier, der sælges af de Sælgende Aktionærer. |
| E.3 | Udbuddets vilkår og betingelser | De Sælgende Aktionærer udbyder 20.000.000 stk. Udbudte Aktier, ekskl. eventuelle Aktier i henhold til Overallokeringsretten.

De Væsentlige Aktionærer har på vegne af Emissionsbankerne givet Joint Global Coordinators en Overallokeringsret til at købe op til 3.000.000 stk. Overallokeringsaktier til Udbudskursen, som kan udnyttes helt eller delvist fra datoen for Optagelsen og indtil 30 kalenderdage derefter, alene til dækning af eventuel overallokering eller korte positioner i forbindelse med Udbuddet.

De Væsentlige Aktionærer udbyder mellem 8.753.013 stk. og 8.878.762 stk. Udbudte Aktier, ekskl. eventuelle Aktier i henhold til Overallokeringsretten, og mellem 11.753.013 stk. og 11.878.762 stk. Udbudte Aktier, inklusive alle Aktier i henhold til Overallokeringsretten.

André Rogaczewski Holding ApS udbyder mellem 1.691.432 stk. og 1.702.267 stk. Udbudte Aktier, Holdingselskabet Claus Jørgensen ApS udbyder mellem 1.691.432 stk. og 1.702.267 stk. Udbudte Aktier, Carsten Gomard Holding ApS udbyder mellem 879.209 stk. og 880.031 stk. Udbudte Aktier, NC NorthCo AB udbyder mellem 1.501.921 stk. og 1.523.498 stk. Udbudte Aktier, Danica Pension, Livsforsikringsaktieselskab udbyder mellem 842.262 stk. og 1.029.431 stk. Udbudte Aktier, og MIP-deltagerne og Medarbejderaktionærer udbyder mellem 4.452.740 stk. og 4.471.735 stk. Udbudte Aktier. De Aktier, der indirekte er ejet af André Rogaczewski, CEO, og Claus Jørgensen, COO, via deres respektive holdingselskaber (André Rogaczewski Holding ApS og Holdingselskabet Claus Jørgensen ApS) vil blive overført til et fælles holdingselskab, som etableres umiddelbart forud for Optagelsen. |

Afsnit E—Udbud
	De Sælgende Aktionærer vil hver især sælge et antal Aktier i forhold til deres relative ejerandel af Selskabet efter gennemførelsen af IPO-omstruktureringen, men forud for Optagelsen. Det præcise antal Aktier, der ejes af hver enkelt af de Sælgende Aktionærer efter gennemførelsen af IPO-omstruktureringen, vil blive fastsat på grundlag af den endelige Udbudskurs som led i IPO-omstruktureringen. De Væsentlige Aktionærer har i henhold til en Aktielånsaftale indgået aftale med Joint Global Coordinators om at stille op til 3.000.000 stk. Aktier til rådighed med henblik på levering af de Udbudte Aktier til investorer i forbindelse med Overallokeringsretten. De Aktier, der stilles til rådighed af de Væsentlige Aktionærer, skal tilbageleveres af Joint Global Coordinators seneste efter udløbet af Overallokeringsretten. Koncernen skal ikke betale nogen omkostninger, renter eller andre beløb som følge af Aktielånsaftalen eller Overallokeringsretten, såfremt den udnyttes. Udbuddet består af: 1) børsnotering og et offentligt udbud til private og institutionelle investorer i Danmark, 2) en privatplacering i USA til personer, der er “qualified institutional buyers” eller “QIBs” (som defineret i Rule 144A i henhold til U.S. Securities Act) i medfør af Rule 144A, og 3) privatplaceringer til institutionelle investorer i resten af verden. Udbuddet uden for USA foretages i overensstemmelse med Regulation S i U.S. Securities Act. Udbudskursintervallet forventes at udgøre mellem DKK 135 og DKK 165 pr. Udbudt Aktie og vil blive fastsat ved en bookbuilding-proces. Udbudskursen fastlægges af de Væsentlige Aktionærer i samråd med de øvrige Sælgende Aktionærer, Bestyrelsen og Joint Global Coordinators og forventes offentliggjort via Nasdaq Copenhagen senest den 7. juni 2018 kl. 7.30 (dansk tid). Udbudskursintervallet kan blive justeret i løbet af bookbuilding-processen. Hvis Udbudskursintervallet justeres, vil Selskabet meddele dette via Nasdaq Copenhagen og offentliggøre et tillæg til dette Prospekt. Efter offentliggørelsen af et sådant tillæg har investorer, der har indleveret købsordrer på Udbudte Aktier i Udbuddet, to handelsdage til at tilbagekalde deres købsordre. I dette tilfælde vil meddelelsen om den endelige Udbudskurs først blive offentliggjort, når fristen for udnyttelse af retten til tilbagekaldelse er udløbet. Udbudskursen kan således ligge uden for Udbudskursintervallet. Udbudsperioden løber fra og med den 23. maj 2018 til og med senest den 6. juni 2018 kl. 11.00 (dansk tid). Udbudsperioden kan lukkes før den 6. juni 2018. Hel eller delvis lukning af Udbudsperioden vil dog tidligst finde sted den 1. juni 2018 kl. 00.01 (dansk tid). Hvis Udbuddet lukkes før den 6. juni 2018, kan meddelelsen om Udbudskursen, tildeling og Optagelse blive fremrykket tilsvarende. Udbudsperioden for købsordrer for beløb til og med DKK 3 mio. kan lukkes før resten af Udbuddet. En sådan tidligere hel eller delvis lukning offentliggøres i givet fald via Nasdaq Copenhagen. Der skal som minimum tegnes/købes 1 stk. Udbudt Aktie. Der gælder intet maksimalt tegningsbeløb i Udbuddet. Antallet af aktier begrænses dog til antallet af Udbudte Aktier i Udbuddet. Købsordrer fra danske investorer for beløb op til og med DKK 3 mio. skal afgives på den ordreblanket, der er indeholdt i det Engelsksprogede Prospekt. Ordreblanketten skal indsendes til

Afsnit E—Udbud

De Sælgende Aktionærer vil hver især sælge et antal Aktier i forhold til deres relative ejerandel af Selskabet efter gennemførelsen af IPO-omstruktureringen, men forud for Optagelsen. Det præcise antal Aktier, der ejes af hver enkelt af de Sælgende Aktionærer efter gennemførelsen af IPO-omstruktureringen, vil blive fastsat på grundlag af den endelige Udbudskurs som led i IPO-omstruktureringen. De Væsentlige Aktionærer har i henhold til en Aktielånsaftale indgået aftale med Joint Global Coordinators om at stille op til 3.000.000 stk. Aktier til rådighed med henblik på levering af de Udbudte Aktier til investorer i forbindelse med Overallokeringsretten. De Aktier, der stilles til rådighed af de Væsentlige Aktionærer, skal tilbageleveres af Joint Global Coordinators seneste efter udløbet af Overallokeringsretten. Koncernen skal ikke betale nogen omkostninger, renter eller andre beløb som følge af Aktielånsaftalen eller Overallokeringsretten, såfremt den udnyttes. Udbuddet består af: 1) børsnotering og et offentligt udbud til private og institutionelle investorer i Danmark, 2) en privatplacering i USA til personer, der er “qualified institutional buyers” eller “QIBs” (som defineret i Rule 144A i henhold til U.S. Securities Act) i medfør af Rule 144A, og 3) privatplaceringer til institutionelle investorer i resten af verden. Udbuddet uden for USA foretages i overensstemmelse med Regulation S i U.S. Securities Act. Udbudskursintervallet forventes at udgøre mellem DKK 135 og DKK 165 pr. Udbudt Aktie og vil blive fastsat ved en bookbuilding-proces. Udbudskursen fastlægges af de Væsentlige Aktionærer i samråd med de øvrige Sælgende Aktionærer, Bestyrelsen og Joint Global Coordinators og forventes offentliggjort via Nasdaq Copenhagen senest den 7. juni 2018 kl. 7.30 (dansk tid). Udbudskursintervallet kan blive justeret i løbet af bookbuilding-processen. Hvis Udbudskursintervallet justeres, vil Selskabet meddele dette via Nasdaq Copenhagen og offentliggøre et tillæg til dette Prospekt. Efter offentliggørelsen af et sådant tillæg har investorer, der har indleveret købsordrer på Udbudte Aktier i Udbuddet, to handelsdage til at tilbagekalde deres købsordre. I dette tilfælde vil meddelelsen om den endelige Udbudskurs først blive offentliggjort, når fristen for udnyttelse af retten til tilbagekaldelse er udløbet. Udbudskursen kan således ligge uden for Udbudskursintervallet. Udbudsperioden løber fra og med den 23. maj 2018 til og med senest den 6. juni 2018 kl. 11.00 (dansk tid). Udbudsperioden kan lukkes før den 6. juni 2018. Hel eller delvis lukning af Udbudsperioden vil dog tidligst finde sted den 1. juni 2018 kl. 00.01 (dansk tid). Hvis Udbuddet lukkes før den 6. juni 2018, kan meddelelsen om Udbudskursen, tildeling og Optagelse blive fremrykket tilsvarende. Udbudsperioden for købsordrer for beløb til og med DKK 3 mio. kan lukkes før resten af Udbuddet. En sådan tidligere hel eller delvis lukning offentliggøres i givet fald via Nasdaq Copenhagen. Der skal som minimum tegnes/købes 1 stk. Udbudt Aktie. Der gælder intet maksimalt tegningsbeløb i Udbuddet. Antallet af aktier begrænses dog til antallet af Udbudte Aktier i Udbuddet. Købsordrer fra danske investorer for beløb op til og med DKK 3 mio. skal afgives på den ordreblanket, der er indeholdt i det Engelsksprogede Prospekt. Ordreblanketten skal indsendes til

Afsnit E—Udbud
	investors eget kontoførende institut i løbet af Udbudsperioden eller en eventuelt kortere periode, der måtte blive offentliggjort via Nasdaq Copenhagen. Ordrer er bindende og kan ikke ændres eller annulleres. Ordrer kan afgives med en maksimumkurs i DKK pr. Udbudt Aktie. Hvis Udbudskursen overstiger maksimumkursen pr. Udbudt Aktie, der er anført på ordreblanketten, vil der ikke blive tildelt Udbudte Aktier til investor. Hvis der ikke er angivet en maksimumkurs pr. aktie, anses ordrer for at være afgivet til Udbudskursen. Alle ordrer, der er afgivet til en kurs lig med Udbudskursen eller en højere kurs, afregnes til Udbudskursen efter eventuel tildeling. Ordrer skal afgives for et antal Udbudte Aktier eller for et samlet beløb nedrundet til nærmeste kronebeløb. Der kan kun indleveres én ordreblanket for hver VP-konto. For bindende ordrer indsendes den udfyldte og underskrevne ordreblanket til investors eget kontoførende institut i så god tid, at investors eget kontoførende institut kan behandle og fremsende ordreblanketten, således at den er Danske Bank A/S i hænde senest den 6. juni 2018 kl. 11.00 (dansk tid) eller på et eventuelt tidligere tidspunkt, hvor Udbuddet lukkes.

Afsnit E—Udbud

investors eget kontoførende institut i løbet af Udbudsperioden eller en eventuelt kortere periode, der måtte blive offentliggjort via Nasdaq Copenhagen. Ordrer er bindende og kan ikke ændres eller annulleres. Ordrer kan afgives med en maksimumkurs i DKK pr. Udbudt Aktie. Hvis Udbudskursen overstiger maksimumkursen pr. Udbudt Aktie, der er anført på ordreblanketten, vil der ikke blive tildelt Udbudte Aktier til investor. Hvis der ikke er angivet en maksimumkurs pr. aktie, anses ordrer for at være afgivet til Udbudskursen. Alle ordrer, der er afgivet til en kurs lig med Udbudskursen eller en højere kurs, afregnes til Udbudskursen efter eventuel tildeling. Ordrer skal afgives for et antal Udbudte Aktier eller for et samlet beløb nedrundet til nærmeste kronebeløb. Der kan kun indleveres én ordreblanket for hver VP-konto. For bindende ordrer indsendes den udfyldte og underskrevne ordreblanket til investors eget kontoførende institut i så god tid, at investors eget kontoførende institut kan behandle og fremsende ordreblanketten, således at den er Danske Bank A/S i hænde senest den 6. juni 2018 kl. 11.00 (dansk tid) eller på et eventuelt tidligere tidspunkt, hvor Udbuddet lukkes.

Investorer, som ønsker at afgive købsordrer for beløb over DKK 3 mio., kan tilkendegive deres interesse til en eller flere af Emissionsbankerne i løbet af Udbudsperioden. Disse investorer kan i Udbudsperioden løbende ændre eller tilbagekalde deres interessetilkendegivelser, men interessetilkendegivelserne bliver bindende ordrer ved udløbet af Udbudsperioden. Umiddelbart efter fastsættelsen af Udbudskursen vil investorerne få tildelt et antal Udbudte Aktier til Udbudskursen inden for rammerne af investors sidst afgivne eller justerede interessetilkendegivelse. Alle ordrer, der er afgivet til en kurs lig med Udbudskursen eller en højere kurs, afregnes til Udbudskursen efter eventuel tildeling.

Hvis det samlede antal aktier, der er afgivet ordrer på i Udbuddet, overstiger antallet af Udbudte Aktier, vil der blive foretaget reduktion på følgende måde:

• Ved købsordrer for beløb til og med DKK 3 mio. foretages matematisk reduktion.
• Ved købsordrer for beløb på mere end DKK 3 mio. sker der individuel tildeling. Joint Global Coordinators vil tildele de Udbudte Aktier efter aftale herom med de Sælgende Aktionærer og Bestyrelsen.
• Der vil blive reserveret op til maksimalt 370.370 stk. Udbudte Aktier (det præcise antal Udbudte Aktier vil svare til en samlet værdi på DKK 50.000.000, divideret med Udbudskursen) til Danske Bank A/S til køb med henblik på at sikre levering til Selskabet i henhold til LTIP Equity Swap.

Efter Udbudsperiodens udløb modtager investorerne normalt en opgørelse over det eventuelle antal Udbudte Aktier, der er tildelt dem, og værdien heraf til Udbudskursen, medmindre andet aftales mellem investor og det pågældende kontoførende institut.

Betaling for og afvikling af de Udbudte Aktier forventes at finde sted på Afviklingsdatoen i form af elektronisk levering af Aktier mod kontant betaling i danske kroner til investorernes konti hos VP Securities og gennem Euroclear og Clearstream.

Hvis Udbuddet lukkes før den 6. juni 2018, vil Afviklingsdatoen og Aktiernes første handels- og officielle noteringsdag på Nasdaq Copenhagen blive fremrykket tilsvarende. Al handel med de Udbudte |

Afsnit E—Udbud
		Aktier forud for afvikling af Udbuddet vil være betinget og sker for de involverede parters egen regning og risiko.

Med henblik på at levere Aktier til deltagerne i Post-IPO LTIP ved optjening af tildelingen af “restricted share units” efter den første optjeningsperiode har Koncernen indgået en “equity swap”, som giver Selskabet mulighed for indtil den 15. april 2019 at købe op til maksimalt 370.370 stk. Udbudte Aktier (det præcise antal Udbudte Aktier vil svare til en samlet værdi på DKK 50.000.000, divideret med Udbudskursen) til Udbudskursen fra Danske Bank A/S eller alternativt, med forbehold for visse betingelser, at kontantafvikle swappen (“LTIP Equity Swap”). Antallet af Aktier, som Selskabet kan købe fra Danske Bank A/S i henhold til LTIP Equity Swap vil blive reserveret til Danske Bank A/S til køb i Udbuddet. Omkostningerne forbundet med LTIP Equity Swap forventes at udgøre ca. DKK 1 mio., som blive blive omkostningsført over løbetiden for LTIP Equity Swap. |
| E.4 | Væsentlige interesser i Udbuddet, herunder interessekonflikter | Visse medlemmer af Bestyrelsen samt Direktionen og Gustaf Löfbjerg (landecfef, Danmark) (“Nøglemedarbejderen”) vil være aktionærer, direkte eller indirekte, i Selskabet efter gennemførelsen af IPO-omstruktureringen eller vil have økonomiske interesser deri og vil derfor have en interesse i Udbuddet. Direktionen og Nøglemedarbejderen vil, betinget af Udbuddets gennemførelse, deltage i visse aktiebaserede incitamentsprogrammer og har derfor en direkte økonomisk interesse i Udbuddet.

Der er ingen medlemmer af Bestyrelsen eller Direktionen, der direkte eller indirekte ejer mere end 5% af Selskabets aktiekapital med undtagelse af André Rogaczewski, CEO, og Claus Jørgensen, COO, som gennem deres respektive holdingselskaber vil eje henholdsvis 8,5% og 8,5% af aktiekapitalen i Selskabet (forudsat at Udbudskursen svarer til midtpunktet i Udbudskursintervallet) efter gennemførelsen af IPO-omstruktureringen men forud for Optagelsen. De Aktier, der indirekte er ejet af André Rogaczewski, CEO, og Claus Jørgensen, COO, via deres respektive holdingselskaber (André Rogaczewski Holding ApS og Holdingselskabet Claus Jørgensen ApS) vil blive overført til et fælles holdingselskab, som etableres umiddelbart forud for Optagelsen. Aktierne og stemmerettighederne i det fælles holdingselskab for André Rogaczewski, CEO, og Claus Jørgensen, COO, vil være ejet i forhold til deres ejerandel af Selskabet efter gennemførelsen af IPO-omstruktureringen og vil være underlagt en ejeraftale.

Emissionsbankerne og deres respektive tilknyttede virksomheder er full-service finansielle institutioner med forskellige aktiviteter, der bl.a. kan omfatte værdipapirhandel, forretnings- og investeringsbankvirksomhed, finansiel rådgivning, investeringsforvaltning, investeringsanalyse, investering for egen regning, risikoafdækning, finansierings- og mægleraktiviteter vedrørende eller udstedt af Selskabet, dets tilknyttede selskaber eller andre parter, der er involveret i eller forbundet med Udbuddet. Visse af Emissionsbankerne og deres respektive tilknyttede virksomheder har fra tid til anden været involveret i og kan i fremtiden involvere sig i forretningsbank- og investeringsbankvirksomhed og finansielle rådgivningstransaktioner og -ydelser som led i deres aktiviteter med Selskabet eller de Sælgende Aktionærer eller nogen af Selskabets eller disses respektive nærtstående parter. For visse af disse |

Afsnit E—Udbud
		transaktioner og ydelser gælder det, at deling af information generelt er underlagt restriktioner af hensyn til fortrolighed, interne procedurer eller gældende regler og forskrifter. Emissionsbankerne har modtaget og vil modtage sædvanligt honorar og provision for disse transaktioner og ydelser og vil muligvis få interesser, der ikke er forenelige med eller potentielt kunne være i modstrid med potentielle investorers og Selskabets interesser.

Især er Danske Bank A/S og Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige og/eller deres respektive tilknyttede virksomheder långivere i forbindelse med Koncernens eksisterende gæld. Endvidere vil Danske Bank A/S og Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige og/eller deres respektive tilknyttede virksomheder være långivere i forbindelse med de Nye Faciliteter. Endvidere har Danske Bank A/S, Skandinaviska Enskilda Banken AB (publ), Sverige og/eller deres respektive tilknyttede virksomheder tidligere modtaget og vil muligvis i fremtiden modtage tjenesteydelser leveret af Selskabet. Derudover er Danica Pension, Livsforsikringsaktieselskab, en af de Sælgende Aktionærer, et 100% ejet datterselskab af Danske Bank A/S.

Herudover kan Emissionsbankerne og deres respektive tilknyttede virksomheder som led i den almindelige drift foretage eller have en bred vifte af investeringer, herunder være modpart i visse derivat- og afdækningsforretninger, og aktivt handle med gældsinstrumenter og aktier (eller hermed forbundne afledte værdipapirer) samt finansielle instrumenter (herunder banklån) for egen regning og for deres klienters regning, og sådanne investerings- og værdipapiraktiviteter kan involvere værdipapirer og/eller instrumenter i Selskabet. Nogle af Emissionsbankerne og/eller deres respektive tilknyttede virksomheder kan fra tid til anden have visse direkte eller indirekte interesser i de Væsentlige Aktionærer. Emissionsbankerne og deres respektive tilknyttede virksomheder kan desuden afgive investeringsanbefalinger og/eller offentliggøre eller udtrykke uafhængige holdninger til analyser af de pågældende værdipapirer eller instrumenter og kan til enhver tid have, eller anbefale klienter at erhverve, lange og/eller korte positioner i de pågældende værdipapirer og instrumenter. |
| E.5 | Sælgende Aktionærer og lockup-aftaler | Sælgende Aktionærer
De Sælgende Aktionærer (bestående af de Væsentlige Aktionærer, André Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB, Danica Pension, Livsforsikringsaktieselskab og MIP-deltagerne samt Medarbejderaktionærer) udbyder 20.000.000 stk. Udbudte Aktier, ekskl. eventuelle Aktier i henhold til Overallokeringssretten. |


Pr. prospektdatoen ejer de Væsentlige Aktionærer 100% af Aktierne. Ejerandelene tilhørende de enkelte Sælgende Aktionærer efter a) IPO-omstruktureringen og før gennemførelse af Udbuddet og b) gennemførelse af Udbuddet vil være som anført nedenfor:
Aktionær	Aktier ejet efter IPO-omstruktureringen og før Udbuddets gennemførelse^{1)}	Aktier ejet efter Udbuddets gennemførelse^{2)}
	Antal Aktier	% af aktiekapital	Antal Aktier
Væsentlige Aktionærer^{3)}	22.055.426	44,11%	10.233.252
André Rogaczewski Holding ApS^{4)}	4.243.478	8,49%	2.546.087
Holdingselskabet Claus Jørgensen ApS^{4)}	4.243.478	8,49%	2.546.087
Carsten Gomard Holding ApS	2.198.948	4,40%	1.319.369
NC NorthCo AB	3.784.471	7,57%	2.270.683
Danica Pension, Livsforsikringsaktieselskab	2.316.221	4,63%	1.389.733
MIP-deltagere og Medarbejderaktionærer	11.157.978	22,32%	6.694.789
Nye aktionærer:	—	—	23.000.000
I alt	50.000.000	100%	50.000.000
1) Forudsat at Udbudskursen svarer til midtpunktet i Udbudskursintervallet.
2) Forudsat at Udbudskursen svarer til midtpunktet i Udbudskursintervallet, salg af 20.000.000 stk. Aktier og fuld udnyttelse af Overallokeringssretten.
3) Forudsat at Overallokeringssretten ikke udnyttes, vil de Væsentlige Aktionærer eje 13.233.252 stk. Aktier, svarende til 26,5% af Selskabets aktiekapital og stemmerettigheder efter Udbuddets gennemførelse.
4) De Aktier, der indirekte er ejet af André Rogaczewski, CEO, og Claus Jørgensen, COO, via deres respektive holdingselskaber (André Rogaczewski Holding ApS og Holdingselskabet Claus Jørgensen ApS) vil blive overført til et fælles holdingselskab, som etableres umiddelbart forud for Optagelsen. Aktierne og stemmerettighederne i det fælles holdingselskab for André Rogaczewski, CEO, og Claus Jørgensen, COO, vil være ejet i forhold til deres aktuelle ejerandel af Selskabet efter gennemførelsen af IPO-omstruktureringen.
De Aktier, der indirekte er ejet af André Rogaczewski, CEO, og Claus Jørgensen, COO, via deres respektive holdingselskaber (André Rogaczewski Holding ApS og Holdingselskabet Claus Jørgensen ApS) vil blive overført til et fælles holdingselskab, som etableres umiddelbart forud for Optagelsen. Aktierne og stemmerettighederne i det fælles holdingselskab for André Rogaczewski, CEO, og Claus Jørgensen, COO, vil være ejet i forhold til deres ejerandel af Selskabet efter gennemførelsen af IPO-omstruktureringen.
André Rogaczewski og Claus Jørgensen har oplyst Selskabet, at de forventer at indgå en ejeraftale vedrørende deres forhold som kapitalejere i det fælles holdingselskab, og at det i ejeraftalen vil fremgå, at alle væsentlige beslutninger truffet af det fælles holdingselskab vedrørende Aktierne, herunder afstemning om Aktierne og afhændelse eller etablering af øvrige tredjepartsrettigheder i forhold til Aktierne, kun kan træffes enstemmigt af André Rogaczewski og Claus Jørgensen. Hvis der ikke kan opnås enstemmighed, foreskriver ejeraftalen et uformelt konfliktløsningspanel, som vil være bemyndiget til at træffe beslutning om det omtvistede emne, med bindende virkning for parterne og uden mulighed for at anke afgørelsen. Selskabet er ikke aftalepart i ejeraftalen og har ingen rettigheder og/eller forpligtelser i henhold til denne.

Afsnit E—Udbud
	Gustaf Löfberg, landechef for Danmark, har oplyst Selskabet, at de Aktier, der ejes indirekte af hans holdingselskab, NC NorthCo AB, vil blive overført til en personlig svensk pensions- og livsforsikringsordning, en Kapitalförsäkring hos Danica Pension Försäkringsaktiebolag, Sverige, i forbindelse med Optagelsen. Stemmerettighederne samt eventuelle rettigheder til at træffe beslutning om de Aktier, der tidligere var ejet af NC NorthCo AB, vil dog fortsat tilhøre Gustaf Löfberg.
De Væsentlige Aktionærer
	De Væsentlige Aktionærer udgøres af FSN Capital IV L.P., FSN Capital IV Invest L.P. og FSN Capital IV Netcompany Co-Investment LP, som er limited partnerships stiftet i henhold til lovgivningen i Jersey, og FSN Capital IV (B) L.P., som er stiftet i henhold til lovgivningen i England. Begge har hjemsted på adressen 11–15 Seaton Place, St Helier, Jersey, JE4 0QH. FSN Capital IV Netcompany Co-Investment LP er et direkte fælles investeringsselskab for visse af investorerne i FSN fund IV. FSN Capital GP IV Limited fungerer som general partner for og på vegne af henholdsvis FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. og FSN Capital IV Netcompany Co-Investment LP.
MIP-deltagere og Medarbejderaktionærer
	MIP-deltagerne og Medarbejderaktionærerne består af en gruppe af 81 personer pr. prospektdatoen, herunder fire medlemmer af Bestyrelsen, et medlem af Direktionen, nogle af de tidligere ejere af Mesan AS (omdøbt til Netcompany Norway AS i marts 2018) og Hunter Macdonald Ltd (omdøbt til Netcompany UK Ltd i januar 2018), samt visse andre medarbejdere, som har investeret i Koncernen, herunder gennem MIP.
	MIP-deltagerne og Medarbejderaktionærerne har investeret i Koncernen, direkte gennem NC TopCo A/S (Koncernens moderselskab forud for gennemførelsen af IPO-omstruktureringen) og indirekte gennem NC ShareCo ApS (en direkte aktionær i NC TopCo A/S forud for gennemførelsen af IPO-omstruktureringen).
Lockup-aftaler
	De Væsentlige Aktionærer og Danica Pension, Livsforsikringsaktieselskab, har indgået aftale med Emissionsbankerne om, at de, bortset fra som beskrevet nedenfor, i en periode på 180 dage fra Optagelsen, ikke uden Emissionsbankernes forudgående skriftlige samtykke vil: 1) udbyde, pantsætte, sælge, indgå aftale om at sælge, sælge nogen option eller indgå aftale om at købe, købe nogen option eller indgå aftale om at sælge, tildele nogen option, ret eller warrant til at købe, udlåne, eller på anden måde, direkte eller indirekte, overdrage eller afhænde (eller offentliggøre en sådan disposition) nogen af deres Aktier, eller nogen værdipapirer, der kan konverteres til, udnyttes til eller ombyttes til sådanne Aktier, 2) indgå nogen swap eller anden disposition, der helt eller delvist overdrager nogen af de økonomiske konsekvenser i forbindelse med ejerskab af sådanne Aktier, uanset om sådanne transaktioner beskrevet under pkt. 1) eller 2) afregnes ved levering af sådanne Aktier eller sådanne andre værdipapirer, kontant eller på anden måde, eller 3) fremsætte begæring om generalforsamling i Selskabet, eller indkalde eller tage skridt til at indkalde til generalforsamling med henblik på at stille forslag om at bemyndige

Afsnit E—Udbud
	Selskabet til at udstede Aktier eller warrants til tegning af Aktier. Endvidere har de Væsentlige Aktionærer og Danica Pension, Livsforsikringsaktieselskab indgået aftale med Emissionsbankerne om, at de ikke vil offentliggøre en hensigt om at indgå i nogen af de i punkt 1) og 2) omtalte transaktioner. Ovenstående gælder ikke for: 1) afståelse af Aktier til deres respektive nærtstående parter, forudsat at disse personer indgår aftale om at overholde tilsvarende begrænsninger, 2) salg af de Udbudte Aktier i Udbuddet, 3) med hensyn til de Væsentlige Aktionærer, udlån af Aktier i henhold til Aktielånsaftalen, 4) afståelse med henblik på at betale (eventuelle) skatteforpligtelser som følge af IPO-omstruktureringen og/eller Post-IPO-omstruktureringen (hvis relevant), 5) overdragelse af Aktier til direkte eller indirekte aktionærer i den pågældende Sælgende Aktionær i forbindelse med eller som følge af eventuelt udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den pågældende Sælgende Aktionær eller nogen af dennes tilknyttede virksomheder, forudsat at den pågældende overtagende aktionær som betingelse for en sådan overdragelse og modtagelse af Aktier, herunder via udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den Sælgende Aktionær eller nogen af dennes tilknyttede virksomheder, har indgået aftale om at påtage sig lockup-forpligtelserne, 6) afståelse i henhold til en retskendelse eller i henhold til love eller bestemmelser, 7) afståelse af Aktier i henhold til et generelt tilbud til alle ejere af aktier i Selskabet afgivet i henhold til overtagelsesbestemmelserne på vilkår, der behandler alle sådanne ejere lige, eller 8) salg af tegningsretter modtaget i forbindelse med en fortegningsemission. Selskabet har indgået aftale med Emissionsbankerne om stort set samme begrænsninger som anført ovenfor i en periode på 180 dage fra Optagelsen med visse undtagelser. Foranstående gælder ikke 1) Aktier udstedt i forbindelse med IPO-omstruktureringen og 2) tildelingen af betingede aktieenheder og Aktier til Direktionen og medarbejdere i Selskabet og dets datterselskaber i henhold til vilkårene for Selskabets Post-IPO LTIP. Bestyrelsen, Direktionen, Nøglemedarbejderen og MIP-deltagerne og Medarbejderaktionærerne har, med visse undtagelser, derudover indgået aftale med Emissionsbankerne om, at de i en periode på 360 dage fra Optagelsen af Aktierne i alt væsentlighed vil være underlagt tilsvarende begrænsninger som Selskabet og de relevante Sælgende Aktionærer som anført ovenfor. De undtagelser, der gælder for Bestyrelsen, Direktionen og Nøglemedarbejderen, omfatter: 1) afståelse til deres respektive a) ægtefælle, b) barn eller c) juridiske enhed, som de alene (eller sammen med en anden af deres respektive nærtstående parter) har bestemmende indflydelse over, forudsat at disse personer indgår aftale om at overholde tilsvarende begrænsninger, 2) salg af de Udbudte Aktier i Udbuddet, 3) afståelse af Aktier i forbindelse med IPO-omstruktureringen og/eller Post-IPO-omstruktureringen, herunder eventuel afståelse, der måtte kræves for direkte eller indirekte at implementere IPO-omstruktureringen og/eller Post-IPO-omstruktureringen, 4) afståelse med henblik på at betale (eventuelle) skatteforpligtelser som følge af IPO-omstruktureringen og/eller Post-IPO-omstruktureringen. --- 29 \| Afsnit E—Udbud \| \| \| --- \| --- \| \| \| Post-IPO-omstruktureringen (hvis relevant), 5) overdragelse af Aktier til direkte eller indirekte aktionærer i en juridisk enhed kontrolleret af det pågældende medlem af Bestyrelsen, Direktionen, Nøglemedarbejderen eller MIP-deltagerne og Medarbejderaktionærerne, i forbindelse med eller som følge af eventuelt udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den pågældende forpligtede Aktionær eller nogen af dennes tilknyttede virksomheder, forudsat at den pågældende overtagende aktionær som betingelse for en sådan overdragelse og modtagelse af Aktier, herunder via udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den forpligtede Aktionær eller nogen af dennes tilknyttede virksomheder, har indgået aftale om at påtage sig lockup-forpligtelserne, 6) afståelse i henhold til en retskendelse eller i henhold til love eller bestemmelser, 7) afståelse efter død, varig invaliditet eller afbrydelse af ansættelsen i en periode på mindst 16 uger som følge af invaliditet eller sygdom, 8) afståelse efter ansættelsesforholdet er bragt til ophør af Selskabet (eller det relevante selskab i Koncernen, hvor den pågældende er ansat) eller udtræden af Bestyrelsen, 9) afståelse af Aktier i henhold til et generelt tilbud til alle ejere af aktier i Selskabet afgivet i henhold til overtagelsesbestemmelserne på vilkår, der behandler alle sådanne ejere lige, 10) salg af tegningsretter modtaget i forbindelse med en fortegningsemission, 11) overdragelse af Aktier til en personlig pensionsordning, 12) for personer omfattet af Selskabets Post-IPO LTIP annullering af betingede aktieenheder, hvis ansættelsesforholdet med Koncernen, under visse omstændigheder, ophører, og 13) for MIP-deltagere og Medarbejderaktionærer (som tilsammen ejer mindre end 5% af Selskabets samlede udestående Aktier efter gennemførelsen af IPO-omstruktureringen og Udbuddet), som har indvilget i at sælge deres Aktier til de Væsentlige Aktionærer, hvis de forlader Koncernen, inden for de første tre år efter Optagelsen, et sådant salg og overdragelse til de Væsentlige Aktionærer eller en erhverver udpeget af de Væsentlige Aktionærer. I tillæg til ovenstående har de Sælgende Aktionærer og Bestyrelsen, Direktionen, Nøglemedarbejderen og MIP-deltagerne og Medarbejderaktionærerne ret til hver især at stille sikkerhed i eventuelle Aktier, de besidder ved Optagelsen, på den betingelse, at 1) den begunstigede for en sådan sikkerhedsstillelse, eller 2) i tilfælde af at sikkerhedsrettigheden kræves håndhævet, erhververen (uanset om denne er den begunstigede eller en tredjemand) af disse aktier vil skulle overholde lockup-forpligtelsen. Endvidere har visse af MIP-deltagerne og Medarbejderaktionærerne indgået aftale med Selskabet om, at de Aktier, de modtager som led i IPO-omstruktureringen og/eller Post-IPO-omstruktureringen (svarende til alle de aktier i NC TopCo A/S, de ejer forud for en sådan begivenhed) i en periode på op til tre år fra Optagelsen vil være underlagt visse begrænsninger og undtagelser. Endvidere har disse MIP-deltagere og Medarbejderaktionærer indvilget i at sælge aktier i Selskabet til de Væsentlige Aktionærer (eller en erhverver udpeget af de Væsentlige Aktionærer), hvis deres ansættelse i Koncernen ophører. Hvis ansættelsesophøret for disse MIP-deltagere og Medarbejderaktionærer gennemføres inden for en periode på tre år fra Optagelsen og 1) skyldes disse MIP-deltageres og Medarbejderaktionærers væsentlige misligholdelse af \| --- \| Afsnit E—Udbud \| \| \| \| --- \| --- \| --- \| \| \| \| ansættelsesforholdet, eller 2) disse MIP-deltageres og Medarbejderaktionærers ansættelsesforhold ophører uden grund, vil de Væsentlige Aktionærer være berettiget til at erhverve de Aktier, som disse MIP-deltagere og Medarbejderaktionærer ejer, til en favørkurs i forhold til Aktiernes gældende markedskurs på tidspunktet for et sådant salg til de Væsentlige Aktionærer. Forudsat at Udbudskursen svarer til midtpunktet i Udbudskursintervallet, vil 11.157.978 stk. Aktier efter gennemførelsen af IPO-omstruktureringen og forud for Optagelsen være ejet af MIP-deltagerne og Medarbejderaktionærerne omfattet af denne indeståelse. \| \| E.6 \| Beløb og procentdel for umiddelbar udvanding som følge af Udbuddet \| Ikke relevant. Der vil ikke blive udstedt nye Aktier i forbindelse med Udbuddet. \| \| E.7 \| Anslåede udgifter, som investor pålægges af Selskabet eller de Sælgende Aktionærer \| Ikke relevant. Hverken Selskabet, de Sælgende Aktionærer eller Emissionsbankerne vil pålægge investorerne omkostninger. Investorerne skal betale sædvanlige transaktions- og ekspeditionsgebyrer til deres kontoførende institutter. \| 30 --- # English Summary Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in Sections A-E (A.1-E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer under the Prospectus Regulation no. 486/2012, as amended. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of "not applicable". \| Section A—Introduction and Warnings \| \| \| \| --- \| --- \| --- \| \| A.1 \| Warning to investors \| This summary should be read as an introduction to this Offering Circular. Any decision to invest in the Offer Shares should be based on consideration of the Offering Circular as a whole by the investor. Where a claim relating to the information contained in the Offering Circular is brought before a court, under the national legislation of the European Economic Area member states, the plaintiff investor might have to bear the costs of translating this Offering Circular before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only if this summary is misleading, inaccurate or inconsistent when read together with the other parts of the Offering Circular or it does not provide, when read together with the other parts of the Offering Circular, key information in order to aid investors when considering whether to invest in the Offer Shares. \| \| A.2 \| Consent for intermediaries \| Not applicable. No agreement has been made in regard to the use of the Offering Circular in connection with a subsequent resale or final placement of the Offer Shares. \| \| Section B-Issuer \| \| \| \| --- \| --- \| --- \| \| B.1 \| Legal and commercial name \| The Company is registered with the legal name Netcompany Group A/S and does not have any secondary names. \| \| B.2 \| Domicile, legal form, country of incorporation \| The Company has its registered office at Grønningen 17, 1stfloor, DK-1270 Copenhagen K, Denmark, and was incorporated in Denmark as a public limited liability company under the laws of Denmark on 16 April 2018. \| \| B.3 \| Current operations and principal activities \| The Group is a pure-play next-generation IT services company, focused on delivering business critical IT solutions to large Public and Private sector customers to lead and support them in their digital transformation journeys. These solutions are at the heart of an organisation’s core strategy or function and are thus highly significant for customers in conducting their core business. The Group has developed and institutionalised a highly differentiated business model that, for over 18 years, has proven to be repeatable and scalable and enables the Group to deliver projects on time, on budget and within scope. The uniqueness of the Group’s business model is characterised by an integrated sales and delivery approach, IT people leading IT people, a very customer transparent and deliverable-driven methodology and a highly skilled team of IT professionals, with an average age in 2017 of approximately 33 years. \| --- 32 \| Section B—Issuer \| \| \| --- \| --- \| \| \| The Group’s business is comprised of two main segments, each of which is an operating segment for financial reporting purposes: - Public sector. Through the Group’s Public sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to central and local government, i.e. the state and large municipalities and regions. The Group’s projects in the Public sector encompass the delivery of society critical systems, including tax collection from citizens and on vehicles, payments of public benefits to citizens (e.g. pensions, cash assistance, children/family and property/housing), central registries for companies, properties, employees and public self-service portals relating to public services, including health. The Group estimates its share of the core public market in Denmark (defined as large complex projects for the central government and selected large municipalities that, post development phase, have a significant share of maintenance and operations recurring spending volume) based on total annual IT spend was approximately 6% for the year ended 31 December 2016. Public sector revenues accounted for 55.3% and 51.6% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 50.7% and 39.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. - Private sector. Through the Group’s Private sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to mid- and large-sized businesses as well as membership organisations, such as trade unions. The Group delivers business critical IT solutions covering various areas such as e-commerce, billing, document and case management, system integration, customer relationship management (“CRM”) and enterprise risk management (“ERM”), artificial intelligence and information management, very often in combination with each other. The Group estimates its share of the core private market in Denmark (defined as medium and large companies with significant annual IT budgets, companies with strategic focus on using digitalisation as a competitive advantage and complex projects where sophisticated IT capabilities are required) based on total annual IT spend was approximately 7% for the year ended 31 December 2016. Private sector revenues accounted for 44.7% and 48.4% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 49.3% and 61.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. The Group’s IT services cover development through to maintenance and operations. The Group’s development services include design, development and implementation of IT solutions driven by customer requirements in the digital transformation areas of systems modernisation, system differentiation and system innovation projects. Its maintenance and operations services include long term benefit realisation initiatives, to continuously maintain, operate and support customer IT solutions that the Group has delivered. As at 11 May 2018, the Group had approximately 1,432 employees based in its key geographies of Denmark, Norway and the United Kingdom (excluding freelancers in Denmark and Norway) and an additional 319 employees based in Poland and Vietnam. \| --- 33 \| Section B—Issuer \| \| \| \| --- \| --- \| --- \| \| B.4a \| Description of the most significant recent trends affecting the Company and the industries in which it operates \| The Next-Generation IT Services Market and Trends IT Services Focusing on Innovation and Differentiation The IT services market is undergoing a secular shift from traditional low-value added services such as infrastructure management and enterprise resource planning (“ERP”) implementation towards high-value added services including digitalisation, custom application development and business process re-engineering. This shift presents opportunities for service providers focused on this large and fast growing segment as organisations across sectors embrace, adapt and respond to the new digital opportunities and efficiency potential made possible by technologies available today. Increased Customer Demand for Digitalised Processes that Enable Competitive Advantage Customer focus is shifting from legacy systems to next-generation systems, following the development and fast adoption of new technologies and need to integrate these systems with new digital offerings. This shift is moving project focus from enhancing or maintaining large, monolithic systems and inflexible data assets, to smaller and more flexible architecture for seamless experiences and advanced analytics. Next-Generation IT Market is Segmented by the Degree of Complexity and Innovation in the Process Customers are now looking at IT services spend in a “pace layered approach” which includes the following three categories: “Records, Differentiation and Innovation”. A substantial shift of IT spend towards Differentiation and Innovation is expected by 2020, with approximately 50% of total IT spend in 2020 expected to be in Differentiation and Innovation, compared to approximately 10% in 2016. Focus Markets and Segments Public. In the public sector, the core market includes large, complex projects for the central government focused on developing IT services designed to facilitate and automate public welfare systems, and selected large municipalities that, post-development phase, have significant share of maintenance and operations recurring spending volume. The Group specialises in large and complex projects involving several stakeholders and technical interdependencies, and companies in need of innovative thinking for projects that are innovative or differentiated in nature and end-to-end systems integration, including systems of records. Private. In the private sector, the core market includes medium and large companies with significant annual IT spend, companies with strategic focus on using digitalisation as a competitive advantage, and “non-vanilla” projects where sophisticated IT capabilities are required. The Group specialises in highly complex and large IT projects for customers that use IT services to innovate and differentiate themselves from competition and projects that require highly-skilled development. The Group sees further potential for market share gains in the Danish, Norwegian and UK IT services markets and generally focuses on markets that have an advanced digitalisation agenda. \| --- 34 \| Section B—Issuer \| \| --- \| \| B.5 \| Description of the Group and the Company’s position within the Group \| The Company was incorporated in April 2018 for the purpose of being admitted to trading and official listing on Nasdaq Copenhagen as the parent company of the Group pursuant to a reorganisation whereby the Selling Shareholders (as defined herein) will become the owners of the Company (the “IPO Reorganisation”). As at the date of the Offering Circular, the Company does not have any material assets or liabilities and does not conduct any operating activities prior to the effectiveness of the IPO Reorganisation. The Company has entered into certain Reorganisation Agreements (as defined herein) with the shareholders of the Group and certain Group entities which provide for the IPO Reorganisation to be carried out in connection with pricing and prior to Admission. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, the Shares will be directly owned by the Significant Shareholders (44.1%), André Rogaczewski Holding ApS (the holding company of André Rogaczewski, CEO) (8.5%), Holdingselskabet Claus Jørgensen ApS (the holding company of Claus Jørgensen, COO) (8.5%), Carsten Gomard Holding ApS (the holding company of Carsten Gomard, member of the Board of Directors) (4.4%), NC NorthCo AB (the holding company of Gustaf Löfberg, Country Manager, Denmark) (7.6%), Danica Pension, Livsforsikringsaktieselskab (4.6%) and the MIP Participants and Employee Shareholders (22.3%). The following table sets forth the Group’s material subsidiaries which are, directly or indirectly held by NC TopCo A/S, as at the date of this Offering Circular: \| \| Entity Name \| Country of Incorporation \| Percentage of (Direct or Indirect) Ownership Interest and Voting Rights \| \| NC Newco A/S \| Denmark \| 100% \| \| Netcompany Holding I A/S (formerly Netcompany A/S) \| Denmark \| 100% \| \| Netcompany UK Ltd (formerly Hunter Macdonald Ltd) \| United Kingdom \| 100% \| \| Netcompany UK Holding Ltd \| Kingdom \| 100% \| \| Netcompany Norway AS (formerly Mesan AS) \| Norway \| 100% \| \| Netcompany A/S (formerly Netcompany IT and Business Consulting A/S) \| Denmark \| 100% \| \| Netcompany Poland Sp. Z o.o. (formerly Netcompany Solutions Sp. Z o.o.) \| Poland \| 100% \| \| The Group has selected the material subsidiaries on the basis of a commercial materiality assessment, primarily focusing on (i) where revenue is generated and (ii) where a substantial part of the Group’s assets are held. The material subsidiaries represented 100% of the Group’s total revenue and 99.4% of the Group’s total EBITDA for the three months ended 31 March 2018 and 99.9% of the Group’s total assets as of 31 March 2018. \| --- 35 \| Section B—Issuer \| \| \| \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| B.6 \| Persons who, directly or indirectly, have an interest in the issuer's capital or voting rights or have control over the Company \| Following completion of the IPO Reorganisation and prior to Admission, the Shares will be directly owned by the Significant Shareholders (44.1%), André Rogaczewski Holding ApS (8.5%), Holdingselskabet Claus Jørgensen ApS (8.5%), Carsten Gomard Holding ApS (4.4%), NC NorthCo AB (7.6%), Danica Pension, Livsforsikringsaktieselskab (4.6%) and the MIP Participants and Employee Shareholders (22.3%) (ownership stakes assume an Offer Price at the midpoint of the Offer Price Range). The Significant Shareholders comprise FSN Capital IV L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, which are limited partnerships organised under the laws of Jersey and FSN Capital IV (B) L.P. organised under the laws of England. FSN Capital IV Netcompany Co-Investment LP is a direct co-investment vehicle for certain of the investors in FSN fund IV. FSN Capital GP IV Limited is acting as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. All Shares have the same rights and rank pari passu in respect of, inter alia, voting rights. Other than as set out above, the Company is not aware that any person directly or indirectly owns an interest in the Company's share capital or voting rights that would be notifiable under Danish law. For further information on the Selling Shareholders, see item E.5. \| \| \| \| \| \| B.7 \| Selected financial and business information \| The selected consolidated financial information comprising selected consolidated income statement, balance sheet and cash flow statements shown below has been derived from the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular. The selected Other Data and Financial Measures as well as the segmental and operating information below has been derived from the Group's regularly maintained records and operating systems. Combined Income Statement \| \| \| \| \| \| \| \| Three months ended 31 March \| \| Year ended 31 December \| \| \| \| \| \| 2018 \| 2017 \| 2017 \| 2016(1) \| 2015 \| \| \| \| DKK million \| \| \| \| \| \| \| Revenue \| 517.0 \| 332.9 \| 1,416.1 \| 899.6 \| 758.1 \| \| \| Cost of services \| (318.8) \| (192.3) \| (803.4) \| (527.0) \| (446.8) \| \| \| Gross profit \| 198.2 \| 140.6 \| 612.7 \| 372.6 \| 311.3 \| \| \| Sales and marketing costs \| (2.7) \| (2.0) \| (9.7) \| (3.7) \| (3.8) \| \| \| Administrative costs \| (67.7) \| (42.8) \| (201.0) \| (120.9) \| (100.1) \| \| \| Operating expenses \| (70.4) \| (44.8) \| (210.7) \| (124.6) \| (103.9) \| \| \| Special items \| (7.7) \| 0 \| (32.9) \| (35.1) \| — \| \| \| EBITA (non-IFRS) \| 120.1 \| 95.7 \| 369.0 \| 212.9 \| 207.4 \| \| \| Amortisation \| (28.8) \| (23.9) \| (95.9) \| (73.8) \| — \| \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| \| Net financials \| (24.7) \| (23.9) \| (72.2) \| (62.7) \| 0.2 \| \| \| EBT \| 66.5 \| 48.0 \| 201.0 \| 76.4 \| 207.6 \| \| \| Tax for the period \| (15.3) \| (12.1) \| (59.4) \| (43.6) \| (19.8) \| \| \| Profit/(loss) for the period \| 51.2 \| 35.9 \| 141.6 \| 32.8 \| 187.8 \| --- 36 # Section B—Issuer (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) which, in total, comprise the Group. ## Organic revenue/organic revenue growth (non-IFRS) \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| DKK million, unless otherwise indicated \| \| \| \| \| \| \| Group \| \| \| \| \| \| \| Group Revenue \| 517.0 \| 332.9 \| 1,416.1 \| 899.6 \| 758.1 \| \| Group impact of constant currency adjustments \| 3.2 \| — \| 4.7 \| — \| — \| \| Group impact of acquisitions \| (77.1) \| (35.1) \| (188.8) \| (11.7) \| — \| \| Group Organic Revenue (non-IFRS) \| 443.2 \| 297.8 \| 1,232.0 \| 887.9 \| 758.1 \| \| Group Organic Revenue Growth (non-IFRS) \| 33.1% \| 45.3% \| 37.0% \| 17.1% \| 20.5% \| \| Sector \| \| \| \| \| \| \| Public sector revenue \| 285.8 \| 152.6 \| 730.2 \| 368.3 \| 311.5 \| \| Public sector impact of constant currency adjustments \| 1.8 \| 0.0 \| 2.4 \| — \| — \| \| Public sector impact of acquisitions \| (11.8) \| (11.4) \| (83.5) \| (2.8) \| — \| \| Public Sector Organic Revenue (non-IFRS) \| 275.8 \| 141.2 \| 649.1 \| 365.6 \| 311.5 \| \| Public Sector Organic Revenue Growth (non-IFRS) \| 80.7% \| 63.7% \| 76.2% \| 17.4% \| 16.8% \| \| Private sector revenue \| 231.2 \| 180.3 \| 685.9 \| 531.3 \| 446.6 \| \| Private sector impact of constant currency adjustments \| 1.4 \| 0.0 \| 2.3 \| — \| — \| \| Private sector impact of acquisitions \| (65.3) \| (23.7) \| (105.2) \| (9.0) \| — \| \| Private Sector Organic Revenue (non-IFRS) \| 167.4 \| 156.6 \| 583.0 \| 522.3 \| 446.6 \| \| Private Sector Organic Revenue Growth (non-IFRS) \| (7.2)% \| 31.9% \| 9.7% \| 16.9% \| 23.2% \| \| Geography \| \| \| \| \| \| \| Denmark(1) revenue \| 397.3 \| 297.8 \| 1,220.3 \| 887.9 \| 758.1 \| \| Denmark impact of constant currency adjustments \| — \| — \| — \| — \| — \| \| Denmark impact of acquisitions \| — \| — \| — \| — \| — \| \| Denmark Organic Revenue (non-IFRS) \| 397.3 \| 297.8 \| 1,220.3 \| 887.9 \| 758.1 \| \| Denmark Organic Revenue Growth (non-IFRS) \| 33.4% \| 45.3% \| 37.4% \| 17.1% \| 20.5% \| \| Norway Revenue \| 42.6 \| 35.1 \| 133.9 \| 11.7 \| — \| \| Norway impact of constant currency adjustments \| 3.2 \| — \| 4.7 \| — \| — \| \| Norway impact of acquisitions \| — \| (35.1) \| (126.9) \| (11.7) \| — \| --- 37 # Section B—Issuer \| \| Norway Organic Revenue (non-IFRS) \| 45.8 \| — \| 11.7 \| — \| — \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| Norway Organic Revenue Growth (non-IFRS) \| 30.6% \| — \| 0.0% \| — \| — \| \| \| United Kingdom(2) Revenue \| 77.1 \| — \| 61.9 \| — \| — \| \| \| United Kingdom impact of constant currency adjustments \| — \| — \| — \| — \| — \| \| \| United Kingdom impact of acquisitions \| 77.1 \| — \| (61.9) \| — \| — \| \| \| United Kingdom Organic Revenue (non-IFRS) \| — \| — \| — \| — \| — \| \| \| United Kingdom Organic Revenue Growth (non-IFRS) \| — \| — \| — \| — \| — \| \| \| (1) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s Danish projects including revenue generated from the Group’s sourcing center in Poland. \| \| \| \| \| \| \| \| (2) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s UK projects including revenue generated from the Group’s sourcing center in Vietnam. \| \| \| \| \| \| \| \| Balance Sheet Data \| \| \| \| \| \| \| \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| \| DKK million \| \| \| \| \| \| \| Goodwill \| 2,108.7 \| 1,883.9 \| 2,108.7 \| 1,883.9 \| 0.0 \| \| \| Other intangible assets \| 465.2 \| 463.6 \| 495.2 \| 488.7 \| 4.1 \| \| \| Intangible assets \| 2,573.9 \| 2,347.5 \| 2,603.9 \| 2,372.5 \| 4.1 \| \| \| Leasehold improvements \| 4.3 \| 3.1 \| 3.9 \| 2.2 \| 2.1 \| \| \| Equipment \| 20.8 \| 15.4 \| 20.0 \| 14.0 \| 6.4 \| \| \| Right of use assets \| 26.9 \| 25.2 \| 30.5 \| 25.2 \| 11.9 \| \| \| Property, plant and equipment \| 52.0 \| 43.8 \| 54.5 \| 41.5 \| 20.4 \| \| \| Other receivables \| 9.9 \| 6.4 \| 8.8 \| 5.4 \| 4.0 \| \| \| Deferred tax assets \| 0.7 \| 0.2 \| 0.0 \| 0.2 \| 11.0 \| \| \| Financial assets \| 10.6 \| 6.6 \| 8.8 \| 5.6 \| 15.0 \| \| \| Non-current assets \| 2,636.4 \| 2,397.9 \| 2,667.2 \| 2,419.6 \| 39.5 \| \| \| Trade receivables \| 318.7 \| 193.6 \| 445.4 \| 258.2 \| 180.3 \| \| \| Receivables from group entities \| — \| 0.0 \| 0.0 \| 0.0 \| 97.7 \| \| \| Contract work in progress \| 301.6 \| 170.7 \| 139.2 \| 110.5 \| 80.9 \| \| \| Other receivables \| 9.3 \| 2.2 \| 11.0 \| 6.8 \| 1.0 \| \| \| Prepayments \| 6.6 \| 6.0 \| 12.3 \| 5.3 \| 5.2 \| \| \| Receivables \| 636.1 \| 372.4 \| 607.8 \| 380.8 \| 365.1 \| \| \| Cash \| 154.2 \| 71.2 \| 194.5 \| 60.0 \| 111.5 \| \| \| Current assets \| 790.4 \| 443.7 \| 802.3 \| 440.8 \| 476.6 \| \| \| Assets \| 3,426.8 \| 2,841.5 \| 3,469.5 \| 2,860.4 \| 516.1 \| \| Share capital \| 71.7 \| 69.4 \| 71.6 \| 69.3 \| 0.6 \| \| \| Cash flow hedging reserve \| (29.8) \| (38.7) \| (30.0) \| (39.8) \| 0.0 \| \| \| Foreign currency translation reserve \| (5.2) \| (2.1) \| (2.9) \| (0.1) \| 0.0 \| \| \| Deferred cost of hedging reserve \| 13.1 \| 20.9 \| 10.4 \| 18.0 \| 0.0 \| \| \| Retained earnings \| 1,652.8 \| 1,252.8 \| 1,594.8 \| 1,213.1 \| 299.8 \| \| \| Equity \| 1,702.6 \| 1,302.3 \| 1,643.9 \| 1,260.5 \| 300.4 \| \| --- 38 \| Section B—Issuer \| \| --- \| \| \| \| Borrowings \| 1,167.3 \| 1,175.7 \| 1,264.9 \| 1,178.0 \| \| Leasing \| 15.0 \| 13.6 \| 17.6 \| 13.6 \| \| Deferred tax liability \| 116.9 \| 106.1 \| 112.4 \| 111.2 \| \| Non-current liabilities \| 1,299.2 \| 1,295.4 \| 1,394.9 \| 1,302.8 \| \| Borrowings \| — \| 0.6 \| 0.0 \| 28.0 \| \| Leasing \| 12.8 \| 11.7 \| 13.6 \| 11.7 \| \| Prepayments received from customers \| 46.2 \| 19.5 \| 36.2 \| 27.5 \| \| Trade payables \| 54.3 \| 16.9 \| 50.6 \| 26.8 \| \| Payables to group entities \| — \| 0.0 \| 0.0 \| 0.0 \| \| Other payables \| 199.9 \| 157.7 \| 223.1 \| 163.3 \| \| Provisions \| 30.4 \| 2.5 \| 30.4 \| 8.9 \| \| Income tax payable \| 81.4 \| 34.8 \| 76.8 \| 31.0 \| \| Current liabilities \| 425.0 \| 243.8 \| 430.7 \| 297.1 \| \| Liabilities \| 1,724.2 \| 1,539.2 \| 1,825.6 \| 1,599.9 \| \| Equity and liabilities \| 3,426.8 \| 2,841.5 \| 3,469.5 \| 2,860.4 \| \| Statement of Cash Flow Data \| \| Three months ended 31 March \| Year ended 31 December \| \| 2018 \| 2017 \| 2017 \| 2016(2) \| 2015 \| \| \| DKK million \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| Depreciation and amortization \| 38.5 \| 27.7 \| 129.2 \| 94.2 \| 20.6 \| \| Working capital changes \| (35.0) \| (20.7) \| (95.0) \| (19.6) \| 9.1 \| \| Free cash flow(1) \| 94.7 \| 78.9 \| 307.3 \| 213.6 \| 237.2 \| \| Paid taxes \| (10.4) \| (19.4) \| (35.4) \| (34.0) \| (20.6) \| \| Net financials \| (13.3) \| (15.6) \| (76.6) \| (62.7) \| 0.2 \| \| Cash flows from operating activities \| 71.1 \| 43.8 \| 195.3 \| 116.9 \| 216.8 \| \| Net cash outflow on acquisition of subsidiaries \| — \| 0.0 \| (120.3) \| (2,516.1) \| 0.0 \| \| Acquisition of intangible assets \| — \| 0.0 \| (11.1) \| (9.2) \| (5.9) \| \| Acquisition of property, plant and equipment \| (3.5) \| (4.9) \| (16.7) \| (13.0) \| (3.0) \| \| Other receivables (deposits) \| (1.1) \| 0.0 \| (2.3) \| (1.5) \| (0.6) \| \| Cash flows from investing activities \| (4.6) \| (4.9) \| (150.5) \| (2,539.7) \| (9.6) \| \| Dividends \| — \| 0.0 \| 0.0 \| (116.4) \| (100.0) \| \| Proceeds from issue of share capital \| 6.9 \| 3.9 \| 16.7 \| 1,265.1 \| 0.0 \| \| Proceeds from borrowings \| — \| 0.0 \| 92.0 \| 1,178.0 \| 0.0 \| \| Repayment of borrowing \| (114.7) \| (3.9) \| (16.6) \| (11.0) \| (8.6) \| \| Cash flows from financing activities \| (107.7) \| (0.0) \| 92.2 \| 2,315.7 \| (108.6) \| \| Net cash flow \| (41.2) \| 38.9 \| 137.0 \| (107.0) \| 98.6 \| \| Cash and cash equivalents at beginning of period \| 194.5 \| 32.0 \| 32.0 \| 111.5 \| 12.9 \| \| Cash and cash equivalents balances acquired \| — \| 0.0 \| 26.3 \| 27.6 \| 0.0 \| \| Effect of exchange rate changes on the balance cash held in foreign currencies \| (1.0) \| (0.2) \| (0.8) \| (0.1) \| 0.0 \| \| Cash and cash equivalents at end of period \| 154.2 \| 70.7 \| 194.5 \| 32.0 \| 111.5 \| --- 39 \| Section B—Issuer \| \| \| --- \| --- \| \| \| (1) Free cash flow is defined as cash flow from operating activities less cash flow from paid taxes, net financials and investing activities. \| \| \| Comparison of Results for the Group for the Three Months Ended 31 March 2018 and 31 March 2017 \| \| \| Revenue increased by DKK 184.1 million, or 55.3%, from DKK 332.9 million for the three months ended 31 March 2017 to DKK 517.0 million for the three months ended 31 March 2018, principally due to growth in revenue in Denmark and Norway as well as the acquisition of Hunter Macdonald Ltd. The organic growth for the three months ended 31 March 2018 was a result of significant Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. \| \| \| Public sector segment revenue accounted for 55.3% and 45.8% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Private sector segment revenue accounted for 44.7% and 54.2% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. \| \| \| • Public sector segment revenue increased by DKK 133.2 million, or 87.3%, from DKK 152.6 million for the three months ended 31 March 2017 to DKK 285.8 million for the three months ended 31 March 2018. Organic revenue growth was 80.7%, primarily driven by Danish Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. Of the DKK 285.8 million in Public sector segment revenue for the three months ended 31 March 2018, DKK 11.8 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the three months ended 31 March 2017 would have been DKK 152.6 million. \| \| \| • Private sector segment revenue increased by DKK 50.9 million, or 28.2%, from DKK 180.3 million for the three months ended 31 March 2017 to DKK 231.2 million for the three months ended 31 March 2018. Organic revenue decreased by 7.2%, largely attributable to the increased focus on the public sector segment which has required a large part of the Danish, Polish and Norwegian workforce to complete and deliver those projects. Of the DKK 231.2 million in Private sector segment revenue for the three months ended 31 March 2018, DKK 65.3 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the three months ended 31 March 2017 would have been DKK 180.3 million. \| \| \| Adjusted EBITA increased by DKK 32.1 million, or 33.5%, from DKK 95.7 million for the three months ended 31 March 2017 to DKK 127.8 million for the three months ended 31 March 2018, principally due to the increase in revenue. Adjusted EBITA margin decreased from 28.8% for the three months that ended 31 March 2017 to 24.7% for the three months that ended 31 March 2018, principally due to higher costs in the United Kingdom attributable to the higher proportion of subcontractors used in the United Kingdom compared \| --- 40 \| Section B—Issuer \| \| \| --- \| --- \| \| \| to Denmark and Norway. As a result, gross profit margin decreased from 42.2% for the three months ended 31 March 2017 to 38.3% for the three months ended 31 March 2018. Comparison of Results for the Group for the Years Ended 31 December 2017 and 31 December 2016 Revenue increased by DKK 516.5 million, or 57.4%, from DKK 899.6 million in 2016 to DKK 1,416.1 million in 2017, principally due to organic growth in Denmark of DKK 332.4 million compared to DKK 129.8 million in 2016 and additional revenue of DKK 133.9 million and DKK 61.9 million generated due to the acquisitions of Mesan AS and Hunter Macdonald Ltd, respectively. The organic growth in 2017 was a result of significant Public sector tender wins in 2015 and 2016 that the Group worked on during 2017, along with wins of additional Public sector tenders in 2017, from their respective dates of consolidation. Public sector segment revenue accounted for 51.6% and 40.9% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Private sector segment revenue accounted for 48.4% and 59.1% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. - Public sector segment revenue increased by DKK 361.8 million, or 98.2%, from DKK 368.3 million for the year ended 31 December 2016 to DKK 730.2 million for the year ended 31 December 2017. Organic revenue growth was 76.2% and 17.4% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the large public tenders won by the Group in Denmark in 2016 and 2017. Of the DKK 730.2 million in Public sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the year ended 31 December 2017 would have been DKK 699.2 million. - Private sector segment revenue increased by DKK 154.6 million, or 29.1%, from DKK 531.3 million for the year ended 31 December 2016 to DKK 685.9 million for the year ended 31 December 2017. Organic revenue growth was 9.7% and 16.9% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the renewal by several of the Group's large Danish customers of their engagements, as well as by the Group winning new major customers during the periods. Of the DKK 685.9 million in Private sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the year ended 31 December 2017 would have been DKK 655.0 million. Adjusted EBITA increased by DKK 153.9 million, or 62.1%, from DKK 248.0 million in 2016 to DKK 402.0 million in 2017, principally due to the increased FTE activity level in 2017. Further, margins improved as a result of continued operational leverage in delivering projects. \| --- 41 \| Section B—Issuer \| \| \| \| --- \| --- \| --- \| \| \| \| Comparison of Results for the Group for the Years Ended 31 December 2016 and 31 December 2015 Revenue increased by DKK 141.5 million, or 18.7%, from DKK 758.1 million in 2015 to DKK 899.6 million in 2016, driven by the increase in revenue of DKK 56.9 million in the Public sector segment and an increase of DKK 84.6 million in the Private sector segment. Public sector segment revenue accounted for 40.9% and 41.1% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Private sector segment revenue accounted for 59.1% and 58.9% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. • Public sector segment revenue increased by DKK 56.9 million, or 18.3%, from DKK 311.5 million for the year ended 31 December 2015 to DKK 368.3 million for the year ended 31 December 2016. Organic revenue growth was 17.4% and 16.8% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 368.3 million in Public sector segment revenue for the year ended 31 December 2016, DKK 2.8 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Public sector segment revenue for the year ended 31 December 2016 would have been DKK 365.6 million. • Private sector segment revenue increased by DKK 84.6 million, or 19.0%, from DKK 446.6 million for the year ended 31 December 2015 to DKK 531.3 million for the year ended 31 December 2016. Organic revenue growth was 16.9% and 23.2% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 531.3 million in Private sector segment revenue for the year ended 31 December 2016, DKK 9.0 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Private sector segment revenue for the year ended 31 December 2016 would have been DKK 522.3 million. Adjusted EBITA increased by DKK 40.7 million, or 19.6%, from DKK 207.4 million in 2015 to DKK 248.0 million in 2016, due to the increase in gross profit margin and a lower increase in administration, sales and marketing costs relative to the increase in Group revenue. As of the date of this Offering Circular, there have been no significant changes to the Group’s financial condition and operating results since 31 March 2018. \| \| B.8 \| Selected key pro forma financial information \| Not applicable. No pro forma financial information is presented in the Offering Circular as there have not been any transactions that result in a significant (defined as more than 25%) gross change in relevant indicators such as total assets, net revenue or net profit. \| \| B.9 \| Profit forecast or estimate \| With respect to the consolidated prospective financial information for the year ending 31 December 2018, the Group targets reported revenue at the top end of the range between DKK 1,940 million and DKK 2,011 million (equal to revenue growth at the top end of the range of between 37% and 42%), organic revenue to grow at the top end of the range of between 20% and 25%, earnings before tax of between DKK 213 million and DKK 282 million (equal to an earnings before tax margin of between 11% and 14%) and an \| --- 42 \| Section B—Issuer \| \| \| \| --- \| --- \| --- \| \| \| \| adjusted EBITA margin of between 24.5% and 27.5%. The Group estimates that special items will be between DKK 30 million and DKK 35 million in 2018. With respect to the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, the Group targets annual reported revenue growth to be between 20% and 25%, annual organic revenue growth to be between 20% and 25%, earnings before tax margin to be in the low to mid 20s% range in 2021 at the latest, and EBITA margin to be in the mid to high 20s% range in 2021 at the latest. \| \| B.10 \| Qualifications in the audit report on the historical financial information \| Not applicable. The audit reports on the historical financial information included in the Offering Circular have been issued without qualifications. \| \| B.11 \| Explanation if the issuer’s working capital is not sufficient for the Company’s present requirements \| Not applicable. In the opinion of the Group, the working capital available to the Group is, at the time of completion of the IPO Reorganisation, sufficient for its present requirements for the next twelve months following the date of this Offering Circular. The working capital of the Group and its need thereof is directly tied to completion of the Refinancing, which is subject to completion of the Offering. \| \| Section C—Securities \| \| \| \| --- \| --- \| --- \| \| C.1 \| A description of the type and the class of the Offer Shares, including any security identification number \| The Shares, including the Offer Shares, are not divided into share classes. Permanent ISIN for the Shares: DK0060952919 \| \| C.2 \| Currency of the Offer Shares \| The Offer Shares will be denominated in Danish kroner (“DKK”). \| \| C.3 \| The number of Shares issued and fully paid and issued but not fully paid \| Upon completion of the IPO Reorganisation, the Company’s share capital has a nominal value of DKK 50,000,000, divided into 50,000,000 Shares of DKK 1 each or multiples thereof, which will all be issued and fully paid up. \| \| C.4 \| A description of the rights attached to the Shares \| All Shares, including the Offer Shares, have the same rights and the Offer Shares will rank pari passu with all other Shares in the Company in respect of voting rights, preemption rights, redemption, conversion and restrictions or limitations according to the articles of association of the Company (the “Articles of Association”) or eligibility to receive dividends or proceeds in the event of dissolution and liquidation. No Shares carry special rights, restrictions or limitations pursuant to the Articles of Association. Each Share with a nominal value of DKK 1 gives the holder the right to one vote at the Company’s general meetings and to receive distributed dividends. Every shareholder is entitled to have specific business transacted at the general meeting, provided that the shareholder submits a written request to that effect to the Board of Directors not later than six weeks before the date of the general meeting. \| \| C.5 \| A description of any restrictions on the free transferability of the Shares \| Not applicable. The Shares are negotiable instruments and no restrictions under the Articles of Association or Danish law apply to the transferability of the Shares. \| --- 43 \| Section C—Securities \| \| \| \| --- \| --- \| --- \| \| C.6 \| Admission to trading on a regulated market \| Application has been made for the Shares to be admitted to trading and official listing on Nasdaq Copenhagen under the symbol “NETC”. The Admission is subject to, among other things, completion of the IPO Reorganisation, Nasdaq Copenhagen’s approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to the settlement and the Company making an announcement to that effect. If the Offering is closed before 6 June 2018, the Admission, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. Payment for and settlement of the Offer Shares are expected to take place on or around 11 June 2018. The first day of trading and official listing of the Shares on Nasdaq Copenhagen under the permanent ISIN is expected to be 7 June 2018 subject to the Offering not being withdrawn prior to settlement and completion of the Offering. \| \| C.7 \| A description of dividend policy \| The Company currently intends to use its available financial resources and free cash flow to service the Group’s debt and invest in continued future growth and therefore does not expect to pay out dividends in 2018 or 2019. Any future decision to propose dividends and the amounts and timing thereof, will be made at the discretion of the Board of Directors and will depend on a number of factors, including future revenue, profits, financial conditions, general economic and business conditions, and future prospects and such other factors as the Board of Directors may deem relevant, as well as other legal and regulatory requirements. There can be no assurances that the Group’s performance will facilitate adherence to the dividend policy, and, in particular, the Company’s ability to pay dividends may be impaired if any of the risks described in this Offering Circular were to occur. Furthermore, the Company’s dividend policy is subject to change as the Board of Directors will revisit the dividend policy from time to time. There can be no assurances that in any given year a dividend will be proposed or declared. As an alternative, or in addition to, making dividend payments, the Board of Directors may initiate share buybacks. \| \| Section D—Risks \| \| \| \| --- \| --- \| --- \| \| D.1 \| Key information on the key risks that are specific to the Company or its industry \| The risks and uncertainties discussed below are those that the Group’s management currently views as material, but these risks and uncertainties are not the only ones that the Group faces. Additional risks and uncertainties, including risks that are not known to the Group at present or that its management currently deems immaterial, may also arise or become material in the future, which could lead to a decline in the value of the Offer Shares and a loss of part or all of your investment. The following risk factors are not listed in any particular order of priority as to significance or probability. • Any failure in a customer’s infrastructure or applications as a result, or alleged result, of the Group’s IT services could result in penalties, claims for substantial damages, require corrective measures and/or cause significant reputational harm. \| --- 44 \| Section D—Risks \| \| \| --- \| --- \| \| \| • The Group’s ability to attract and retain both IT professionals and customers depends on the Group’s reputation in the marketplace. Negative media coverage and public scrutiny may adversely affect the Group’s business and the price of the Shares. • The Group’s success depends upon its management team, highly skilled IT professionals and consultants, its ability to hire, attract, motivate, retain and train such personnel, and the Group’s wages are subject to wage inflation. • The Group may not be able to protect itself against cyber threats that have the potential to significantly disrupt the Group and its customers’ services. • The Group may not be successful at identifying, acquiring or integrating other businesses or technologies. • Any inability to manage and sustain the Group’s growth could disrupt its business and reduce its profitability. • If the Group or its customers do not accurately forecast volumes required for fixed fee contracts or contracts with degressive price models, the total contract value of its contracts could be lower than anticipated, and if the Group’s pricing does not anticipate the cost and complexity of performing its work, the Group’s contracts could be unprofitable. • Changes in laws and regulations or changed interpretation or enforcement of such laws and regulations may sometimes be unpredictable, which could adversely affect the Group’s business. In particular, changes in Danish tax laws, privacy and data protection regulations and national security regulations, if adopted, could adversely affect the Group’s business. • Privacy and data protection compliance breaches or failure to protect confidential information could harm the Group’s reputation and expose it to litigation and/or other legal or regulatory actions and/or sanctions. • The Group and its customers are subject to extensive legislative, industry and business requirements, and the Group or its employees may inadvertently violate certain laws and requirements as a consequence of the Group’s rapid growth. • The Group is subject to the risk of reduced customers’ IT expenditure levels. • Transformation into a listed public company will increase the Group’s costs and may disrupt the regular operations of its business and require adjustments of certain policies, procedures and strategies. • Adverse events affecting the stability and standing of the European Union as a single market may have a negative effect on global economic conditions, financial markets and the Group’s business. • The markets in which the Group competes are highly competitive, and the Group might not be able to compete effectively. \| --- 45 \| Section D—Risks \| \| \| --- \| --- \| \| \| • The Group’s results of operations could be negatively affected if it cannot adapt, expand and develop its IT services in response to changes in technology, customer demand, or market developments. • The Group’s success depends on its ability to retain customers and win additional work from existing clients. • The Group’s work with Public sector customers exposes the Group to additional risks inherent in the Public sector contracting environment. • A Public sector customer’s decision following a tender won by the Group to award the contract to the Group may be challenged before administrative tribunals and/or courts and it is uncertain whether the Group will be successful in defending against such a challenge. • The Group’s insurance coverage may be insufficient. • The Group may incur additional costs from its use of subcontractors and may be liable for their mistakes. • The Group could be subject to liability if its strategic partners, vendors or service providers do not perform their obligations or deliver their project contributions on time or at all. • The Group’s IT services could infringe upon third-party intellectual property rights and it may lose its ability to utilise the intellectual property of third parties. • The widespread use of the Group’s Modulus platform by, and the high market share among, trade unions exposes the Group to the risk that competitors develop a platform that unions consider preferable to Modulus. • A significant portion of the Group’s revenues depends on a limited number of customers. • The Group’s rapid increase in market shares in certain areas may cause its customers, particularly within the Public sector segment, to give more business to the Group’s competitors in order to diversify, and competition regulations or authorities may limit the Group’s ability to grow and may force the Group to alter its business practices. • If the Group were unable to bill for its services or collect its receivables, its results of operations and cash flows could be materially adversely affected. • Any disruption in data centre operations or telecommunications systems failures could harm the Group’s ability to deliver its IT services, damage its reputation or otherwise materially adversely affect its business. • The Group’s revenue visibility is subject to certain assumptions and estimates and expected revenue may not be realised in full. • The Group may face difficulties in delivering complex and large projects to its customers which could result in loss of business and reputational harm. • Failure to maintain utilisation levels may have an adverse effect on the Group’s margins. \| --- 46 \| Section D—Risks \| \| \| \| --- \| --- \| --- \| \| \| \| • The Group’s future results may differ materially from what is expressed or implied by the forecast of consolidated financial information and projections of consolidated medium term financial targets included in this Offering Circular, and investors should not place undue reliance on this information. • The Group’s consolidated balance sheet includes significant amounts of goodwill and intangible assets in connection with acquisitions and faces the risk of impairment of a significant portion of these assets. • The Group may be unable to obtain financing or guarantee facilities at favourable terms, or at all, or perform payment obligations due to insufficient liquidity. • The Group’s degree of leverage and ability to incur additional indebtedness could have a material adverse effect on its ability to obtain additional financing or make it more vulnerable in the event of a downturn in business or the economy generally. • The Group’s New Facilities contain, and its future debt arrangements could contain, covenants that limit the Group’s liquidity and flexibility in obtaining additional financing, in pursuing business acquisitions or other corporate activities or its ability to declare dividends to its shareholders. • The Group depends on protecting its proprietary technology and intellectual property rights, and protective measures may prove costly, time consuming and may not be resolved in the Group’s favour. • The Group may be the subject of litigation, which, if adversely determined, could harm its business, reputation, results of operations, financial condition and prospects. • The Group’s international operations are subject to certain risks inherent in doing business internationally. • Some of the Group’s contracts with its customers include change of control provisions which could be triggered by the Offering or a subsequent change of control. • The Group may lose IT audit certifications, or suffer harm from not being able to obtain new IT audit certifications in a timely manner. • The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies. • Interest rate fluctuations could materially adversely affect the Group’s business, results of operations, financial condition and cash flows. \| \| D.3 \| Key information on the key risks relating to the Offer Shares \| • Following the Offering, the Significant Shareholders and certain members of the Board of Directors, Executive Management and the Key Employee, will continue to be large shareholders and may control or otherwise influence important actions the Group takes. • There is limited free float in the Shares. • The Shares have not previously been publicly traded, and their price may be volatile and fluctuate. \| --- 47 \| Section D—Risks \| \| \| \| --- \| --- \| --- \| \| \| \| • Future sales of Shares after the Offering may cause a decline in the market price of the Shares. • The issuance of additional Shares in the Company in connection with future acquisitions, any share incentive or share option plan or otherwise may dilute all other shareholdings. • The Company may not be able or may decide not to pay dividends at a level anticipated by shareholders on its Shares, which could reduce investors’ return on Shares. • Shareholders in the United States and other non-Danish jurisdictions may not be able to participate in future equity offerings. • The Offering may be withdrawn after Admission to trading and official listing of the Shares and until settlement of the Offering. \| \| Section E—Offer \| \| \| \| --- \| --- \| --- \| \| E.1 \| Total net proceeds of the Offer and estimated expenses \| The Group will not receive any of the proceeds from the sale of the Offer Shares by the Selling Shareholders in the Offering. The total expenses in relation to the Offering payable by the Group to the Managers, other advisor fees and expenses and fees related to the Refinancing, are estimated to be approximately DKK 50 million, of which 17.5 million were expensed in the financial year ended 2017. In addition, certain expenses in relation to the Offering, including commissions and fees (fixed and discretionary) to be paid to the Managers, are payable by the Selling Shareholders based proportionately on the numbers of Offer Shares that are sold in the Offering. Further, the Selling Shareholders have agreed to pay a selling commission to account holding banks (unless such account holding bank is a Manager) equivalent to 0.25% of the Offer Price of the Offer Shares that are allocated in respect of orders of up to and including DKK 3 million submitted through the account holding banks (except for the Managers) to be paid proportionally by the Selling Shareholders based on the number of Offer Shares, respectively, that are sold. \| \| E.2a \| Reasons for the Offer and use of proceeds, estimated net amount of the proceeds \| The Offering is expected to support the Group’s operational strategy, advance the Company’s public and commercial profile, and provide improved access to public capital markets and a diversified base of new Danish and international shareholders. The Group believes that these factors will further enhance its competitive position, in relation to other IT services companies, and provide the appropriate platform for the Group’s future development. The Group will not receive any part of the proceeds from the sale of Offer Shares sold by the Selling Shareholders. \| \| E.3 \| Terms and conditions of the Offer \| The Selling Shareholders are offering 20,000,000 Offer Shares, excluding any Shares subject to the Overallotment Option. The Significant Shareholders have agreed to grant the Joint Global Coordinators, on behalf of the Managers, an Overallotment Option to purchase up to 3,000,000 Option Shares at the Offer Price, exercisable, in whole or in part, from the date of Admission until \| --- 48 \| Section E—Offer \| \| \| --- \| --- \| \| \| 30 calendar days thereafter, solely to cover overallotments or short positions, if any, incurred in connection with the Offering. The Significant Shareholders are offering between 8,753,013 and 8,878,762 Offer Shares, excluding any Shares subject to the Overallotment Option and between 11,753,013 and 11,878,762 Offer Shares, including all Shares subject to the Overallotment Option. André Rogaczewski Holding ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Holdingselskabet Claus Jørgensen ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Carsten Gomard Holding ApS is offering between 879,209 and 880,031 Offer Shares, NC NorthCo AB is offering between 1,501,921 and 1,523,498 Offer Shares, Danica Pension, Livsforsikringsaktieselskab is offering between 842,262 and 1,029,431 Offer Shares and the MIP Participants and Employee Shareholders are offering between 4,452,740 and 4,471,735 Offer Shares. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. Each of the Selling Shareholders will sell a number of Shares pro rata to their relative ownership of the Company, following completion of the IPO Reorganisation, but prior to Admission. The exact number of Shares to be held by each Selling Shareholder, following completion of the IPO Reorganisation, will be determined on the basis of the final Offer Price, as part of the IPO Reorganisation. The Significant Shareholders have, pursuant to a Share Lending Agreement, agreed with the Joint Global Coordinators to make available up to 3,000,000 Shares for purposes of delivery of the Offer Shares to investors in connection with the Overallotment Option. The Shares made available by the Significant Shareholders shall be redelivered by the Joint Global Coordinators, no later than following the expiry of the Overallotment Option. No costs, interest or other payments shall be made by the Group as a result of the Share Lending Agreement or the Overallotment Option, if exercised. The Offering consists of: (i) an initial public offering to retail and institutional investors in Denmark; (ii) a private placement in the United States to persons who are “qualified institutional buyers” or “QIBs” (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A; and (iii) private placements to institutional investors in the rest of the world. The Offering outside the United States will be made in compliance with Regulation S under the U.S. Securities Act. The Offer Price Range is expected to be between DKK 135 and DKK 165 per Offer Share and will be determined through a book-building process. The Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, Board of Directors and the Joint Global Coordinators and is expected to be announced through Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. The Offer Price Range may be adjusted during the book-building process. If the Offer Price Range is adjusted, the Company will make an announcement through Nasdaq Copenhagen and publish a supplement to this Offering Circular. Following publication of such \| --- 49 \| Section E—Offer \| \| \| --- \| --- \| \| \| supplement, investors who have submitted orders to purchase Offer Shares in the Offering will have two trading days to withdraw their purchase offer. In such an event, the announcement of the final Offer Price will not be published until the period for exercising such withdrawal rights has ended. The Offer Price may thus be outside of the Offer Price Range. The Offer Period will commence on 23 May 2018 and will close no later than 6 June 2018 at 11:00 a.m. (CET). The Offer Period may be closed prior to 6 June 2018; however, the Offer Period will not be closed in whole or in part before 1 June 2018 at 00:01 a.m. (CET). If the Offering is closed before 6 June 2018, the announcement of the Offer Price, allocation and the Admission may be moved forward accordingly. The Offer Period in respect of applications for purchases of amounts up to, and including, DKK 3 million may be closed before the remainder of the Offering is closed. Any such earlier closing, in whole or in part, will be announced through Nasdaq Copenhagen. The minimum subscription/purchase amount is one Offer Share. No maximum subscription amount applies to the Offering. However, the number of shares is limited to the number of Offer Shares in the Offering. Applications by Danish investors to purchase for amounts of up to and including DKK 3 million should be made by submitting the application form enclosed in the English Language Prospectus to the investor’s own account holding bank during the Offer Period or such shorter period as may be announced through Nasdaq Copenhagen. Applications are binding and cannot be altered or cancelled. Bids may be made at a maximum price per Offer Share in Danish kroner. If the Offer Price exceeds the maximum price per Offer Share stated in the application form, then no Offer Shares will be allocated to the investor. Where no maximum price per share has been indicated, applications will be deemed to be made at the Offer Price. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. Applications should be made for a number of Offer Shares or for an aggregate amount rounded down to the nearest Danish kroner amount. Only one application will be accepted from each account in VP Securities. For binding orders, the application form must be submitted to the investor’s own account holding bank in complete and executed form in due time to allow the investor’s own account holding bank to process and forward the application to ensure that it is in the possession of Danske Bank A/S, no later than 11 a.m. (CET) on 6 June 2018, or such earlier time at which the Offering is closed. Investors who wish to apply to purchase for amounts of more than DKK 3 million can indicate their interest to one or more of the Managers during the Offer Period. During the Offer Period, such investors can continuously change or withdraw their declarations of interest, but these declarations of interest become binding applications at the end of the Offer Period. Immediately following the determination of the Offer Price, investors will be allocated a number of Offer Shares at the Offer Price within the limits of the investor’s most recently submitted or adjusted declaration of interest. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. \| --- 50 \| Section E—Offer \| \| \| \| --- \| --- \| --- \| \| \| \| In the event that the total amount of shares applied for in the Offering exceeds the number of Offer Shares, reductions will be made as follows: • With respect to applications for amounts of up to and including DKK 3 million, reductions will be made mathematically. • With respect to applications for amounts of more than DKK 3 million, individual allocations will be made. The Joint Global Coordinators will allocate the Offer Shares after agreement upon such allocations with the Selling Shareholders and the Board of Directors. • Up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) will be reserved for Danske Bank A/S to purchase for the purpose of ensuring delivery to the Company pursuant to the LTIP Equity Swap. Following the expiration of the Offer Period, investors will normally receive a statement indicating the number of Offer Shares allocated, if any, and the equivalent value at the Offer Price unless otherwise agreed between the investor and the relevant account holding bank. Payment for and settlement of the Offer Shares are expected to take place on the Settlement Date by way of delivery of Shares against payment in immediately available funds in Danish kroner in book-entry form to investors’ accounts with VP Securities and through the facilities of Euroclear and Clearstream. If the Offering is closed before 6 June 2018, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. For the purpose of delivering Shares to the participants in the Post-IPO LTIP upon vesting of the grant of restricted share units after the first vesting period, the Group has entered into an equity swap allowing the Company, on 15 April 2019, to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) at the Offer Price from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap (the “LTIP Equity Swap”). The number of Shares which may be purchased by the Company from Danske Banks A/S under the LTIP Equity Swap, will be reserved for Danske Bank A/S to purchase in the Offering. The costs related to the LTIP Equity Swap is expected to be approximately DKK 1 million, which will be expensed over the duration of the LTIP Equity Swap. \| \| E.4 \| Material interests in the Offer, including conflicts of interest \| Certain members of the Board of Directors as well as the Executive Management and Gustaf Löfberg (Country Manager, Denmark) (the “Key Employee”) will be shareholders, directly or indirectly, in the Company following completion of the IPO Reorganisation or hold economic interests therein and therefore have an interest in the Offering. The Executive Management and the Key Employee will, subject to completion of the Offering, participate in certain share-based incentive programmes and therefore have a direct economic interest in the Offering. \| --- 51 \| Section E—Offer \| \| \| --- \| --- \| \| \| No member of the Board of Directors or Executive Management, directly or indirectly, hold more than 5% of the Company’s share capital except for André Rogaczewski, CEO, and Claus Jørgensen, COO, who will, through their respective holding companies, own 8.5% and 8.5% respectively of the share capital in the Company (assuming an Offer Price at the midpoint of the Offer Price Range), following completion of the IPO Reorganisation, but prior to Admission. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation and will be governed by a shareholders’ agreement. The Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities related to or issued by the Company, its affiliates or other parties involved in or related to the Offering. Certain of the Managers and their respective affiliates have from time to time engaged in, and may in the future engage in, commercial banking, investment banking and financial advisory transactions and services in the ordinary course of their business with the Company or the Selling Shareholders or any of the Company’s or their respective related parties. With respect to certain of these transactions and services, the sharing of information is generally restricted for reasons of confidentiality, internal procedures or applicable rules and regulations. The Managers have received and will receive customary fees and commissions for these transactions and services and may come to have interests that may not be aligned or could potentially conflict with potential investors’ and the Company’s interests. In particular, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates are lenders under the Group’s existing indebtedness. In addition, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates will be a lender under the New Facilities. Furthermore, Danske Bank A/S, Skandinaviska Enskilda Banken AB (publ), Sverige and/or their respective affiliates, have previously received and may in the future receive services provided by the Company. In addition, Danica Pension, Livsforsikringsaktieselskab, one of the Selling Shareholders, is a wholly-owned subsidiary of Danske Bank A/S. In addition, in the ordinary course of business, the Managers and their respective affiliates may make or hold a broad array of investments including serving as counterparties to certain derivative and hedging arrangements and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and \| --- 52 \| Section E—Offer \| \| --- \| \| \| \| such investment and securities activities may involve securities and/or instruments of the Company. Some of the Managers and/or their respective affiliates may from time to time hold certain direct or indirect minority interests in the Significant Shareholders. The Managers and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. \| \| E.5 \| Selling Shareholders and Lock-Up Arrangements \| The Selling Shareholders The Selling Shareholders (comprising the Significant Shareholders, André Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB, Danica Pension, Livsforsikringsaktieselskab, and the MIP Participants and Employee Shareholders) are offering 20,000,000 Offer Shares, excluding any Shares subject to the Overallotment Option. As at the date hereof, the Significant Shareholders own 100% of the Shares. The ownership stakes of each of the Selling Shareholders following (a) the IPO Reorganisation and prior to completion of the Offering and (b) the completion of the Offering, will be as follows: \| \| Shareholder \| Shares owned after the IPO Reorganisation and before completion of the Offering(1) \| Shares owned after completion of the Offering(2) \| \| Number of Shares \| % of share capital \| Number of Shares \| % of share capital \| \| Significant Shareholders(3) \| 22,055,426 \| 44.11% \| 10,233,252 \| 20.47% \| \| André Rogaczewski Holding ApS(4) \| 4,243,478 \| 8.49% \| 2,546,087 \| 5.09% \| \| Holdingselskabet Claus Jørgensen ApS(4) \| 4,243,478 \| 8.49% \| 2,546,087 \| 5.09% \| \| \| \| Carsten Gomard Holding ApS \| 2,198,948 \| 4.40% \| 1,319,369 \| \| NC NorthCo AB \| 3,784,471 \| 7.57% \| 2,270,683 \| \| Danica Pension, Livsforsikringsaktieselskab \| 2,316,221 \| 4.63% \| 1,389,733 \| \| MIP Participants and Employee Shareholders \| 11,157,978 \| 22.32% \| 6,694,789 \| \| New shareholders \| — \| — \| 23,000,000 \| \| \| Total \| 50,000,000 \| 100% \| 50,000,000 \| 100% \| \| \| \| (1) Assuming an Offer Price at the midpoint of the Offer Price Range. (2) Assuming an Offer Price at the midpoint of the Offer Price Range, the sale of 20,000,000 Shares and full exercise of the Overallotment Option. (3) Assuming no exercise of the Overallotment Option, the Significant Shareholders will own 13,233,252 Shares, corresponding to 26.5% of the Company’s share capital and voting rights after completion of the Offering. (4) The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights of the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their current ownership of the Company following completion of the IPO Reorganisation. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and \| --- 53 \| Section E—Offer \| \| \| --- \| --- \| \| \| Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation. André Rogaczewski and Claus Jørgensen have informed the Company that they expect to enter into a shareholders’ agreement governing their relations as shareholders in the joint holding company and that the shareholders’ agreement will provide that any material decisions by the joint holding company with respect to the Shares, including voting on the Shares and disposals of or creation of other third party rights over the Shares shall be subject to the unanimous decision by André Rogaczewski and Claus Jørgensen. If no unanimous decision can be reached, the shareholders’ agreement provides for an informal dispute resolution panel, which shall have the power to decide on the disputed matter, with binding effects on the parties and no rights of appeal. The Company is not a party to the shareholders’ agreement and does not have any rights and/or obligations under it. Gustaf Löfberg, Country Manager, Denmark, has informed the Company that the Shares held indirectly through his holding company, NC NorthCo AB, will be transferred to a Swedish personal pension and life insurance scheme, a Kapitalförsäkring with Danica Pension Försäkringsaktiebolag, Sweden, in connection with Admission. However, the voting rights as well as any rights to decide on disposals of the Shares previously held by NC NorthCo AB, shall remain with Gustaf Löfberg. The Significant Shareholders The Significant Shareholders comprise FSN Capital IV L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, which are limited partnerships organised under the laws of Jersey and FSN Capital IV (B) L.P. organised under the laws of England, each with registered office at 11–15 Seaton Place, St Helier, Jersey, JE4 0QH. FSN Capital IV Netcompany Co-Investment LP is a direct co-investment vehicle for certain of the investors in FSN fund IV. FSN Capital GP IV Limited is acting as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. MIP Participants and Employee Shareholders The MIP Participants and Employee Shareholders comprise a group of 81 individuals as at the date hereof, including four members of the Board of Directors, a member of the Executive Management, some of the previous owners of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018), and certain other employees, having invested in the Group, including through the MIP. The MIP Participants and Employee Shareholders have invested in the Group, directly through NC TopCo A/S (the parent company of the Group, prior to the completion of the IPO Reorganisation) and indirectly through NC ShareCo ApS (a direct shareholder in NC TopCo A/S, prior to the completion of the IPO Reorganisation). Lock-Up Arrangements The Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab, have agreed with the Managers that they \| --- 54 \| Section E—Offer \| \| \| --- \| --- \| \| \| will not, except as set forth below, for a period of 180 days after Admission, without the prior written consent of the Managers: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce such action), directly or indirectly, any of their Shares, or any securities convertible into or exercisable or exchangeable for such Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Shares, whether any such transactions described in clause (i) or (ii) above are to be settled by delivery of such Shares or such other securities, in cash or otherwise; or (iii) propose any general meeting of the Company, or convene or take action to convene any general meeting for the purpose of proposing, any resolution of the Company authorising the issue of any Shares or warrants to subscribe for Shares. Further, the Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab have agreed with the Managers that they will not publicly announce any intention to enter into any of the transactions mentioned in (i) and (ii). The foregoing shall not apply to: (i) disposal of Shares to their respective related parties, provided that such persons agree to adhere to identical restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) with respect to the Significant Shareholders, the lending of Shares under the Share Lending Agreement; (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of the relevant Selling Shareholder, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such Selling Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the Selling Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; or (viii) sale of subscription rights received in connection with a rights issue. The Company has agreed with the Managers to substantially the same restrictions set forth above for a period of 180 days from Admission subject to certain exemptions. The foregoing shall not apply to (i) Shares issued in connection with IPO Reorganisation, and (ii) the grant of restricted share units and Shares to the Executive Management and employees of the Company and its subsidiaries in accordance with the terms of the Company’s Post-IPO LTIP. In addition, the members of the Board of Directors, Executive Management, the Key Employee and the MIP Participants and Employee Shareholders have, subject to certain exemptions, agreed with the Managers that, for a period of 360 days from Admission of the Shares, they will be subject to substantially the same restrictions as those of the Company and the relevant Selling Shareholders as set forth above. \| --- 55 \| Section E—Offer \| \| \| --- \| --- \| \| \| The exemptions applicable to the Board of Directors, Executive Management and the Key Employee include: (i) the disposal to their respective (a) spouse, (b) child or (c) any legal entity over which they alone (or together with any other of their respective related parties) have a controlling influence, provided that such persons agree to adhere to similar restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) disposal of Shares in connection with the IPO Reorganisation and/or the Post-IPO Reorganisation, including any disposal required to be made for the purpose of implementing, directly or indirectly, the IPO Reorganisation and/or the Post-IPO Reorganisation; (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of an entity controlled by a member of the Board of Directors, the Executive Management, the Key Employee or the MIP Participants and Employee Shareholders, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such obliged Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the obliged Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) disposal occurring after death, permanent disability or interruption in employment for a continuous period of not less than 16 weeks due to disability or illness; (viii) disposal occurring after termination of employment by the Company (or the relevant employer company in the Group) or resignation from the Board of Directors; (ix) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; (x) sale of subscription rights received in connection with a rights issue; (xi) the transfer of Shares to a personal pension scheme; (xii) with respect to persons comprised by the Post-IPO LTIP, the cancellation of restricted share units, in the event that, the employment relationship with the Group, under certain circumstances, is terminated; and (xiii) with respect to certain of the MIP Participants and Employee Shareholders (holding in the aggregate less than 5% of the total outstanding Shares of the Company following completion of the IPO Reorganisation and the Offering) having undertaken to sell their Shares to the Significant Shareholders in the event they are leaving the Group within the first three years after Admission, such sale and transfer to the Significant Shareholders or any transferee appointed by the Significant Shareholders. In addition to the above, each of the Selling Shareholders and the members of the Board of Directors, Executive Management, the Key Employee and MIP Participants and Employee Shareholders shall be entitled to grant security over any Shares held on Admission, subject to the condition that (i) the beneficiary of such security, or (ii) in the event of and enforcement of such security interest, any transferee (whether the beneficiary or a third party) of such shares, shall execute and deliver an adherence to the lock-up undertaking. \| --- 56 \| Section E—Offer \| \| \| \| --- \| --- \| --- \| \| \| \| Further, certain of the MIP Participants and Employee Shareholders have agreed with the Company that, for a period of up to three years from Admission, the Shares they receive as part of the IPO Reorganisation and/or the Post-IPO Reorganisation (which corresponds with all shares in NC TopCo A/S they hold prior to such events) will be subject to certain restrictions and exceptions. Further, these MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders’ material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders’ employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be held by the MIP Participants and Employee Shareholders comprised by this undertaking. \| \| E.6 \| The amount and percentage of immediate dilution resulting from the Offering \| Not applicable. No new Shares will be issued in connection with the Offering. \| \| E.7 \| Estimated expenses charged to the investor by the Company or the Selling Shareholders \| Not applicable. None of the Company, the Selling Shareholders or the Managers will charge expenses to investors. Investors will have to bear customary transaction and handling fees charged by their account-holding banks. \| --- 57 # RISK FACTORS An investment in the Offer Shares involves a high degree of financial risk. You should carefully consider all information in this Offering Circular, including the risks described below, before you decide to buy the Offer Shares. This section addresses both general risks associated with the industry in which the Group operates and the specific risks associated with its business. If any such risks were to materialise, the Group's business, results of operations, financial condition and/or prospects could be materially adversely affected, resulting in a decline in the value of the Offer Shares and a loss of part or all of your investment. Further, this section describes certain risks relating to the Offering and the Offer Shares which could also adversely impact the value of the Offer Shares. The risks and uncertainties discussed below are those that the Group's management currently views as material, but these risks and uncertainties are not the only ones that the Group faces. Additional risks and uncertainties, including risks that are not known to the Group at present or that its management currently deems immaterial, may also arise or become material in the future, which could lead to a decline in the value of the Offer Shares and a loss of part or all of your investment. The following risk factors are not listed in any particular order of priority as to significance or probability. ## Risks Relating to the Group's Business and Operations 1. Any failure in a customer's infrastructure or applications as a result, or alleged result, of the Group's IT services could result in penalties, claims for substantial damages, require corrective measures and/or cause significant reputational harm Many of the Group's engagements involve projects and services that are critical to the operations of its customers' businesses. If errors or defects are discovered, the Group may have to incur significant expenditures to eliminate them and may not be able to successfully correct them in a timely manner or at all. Errors and failures in IT services could result in a loss of, or delay in, market acceptance of such IT services and could damage the Group's reputation. The Group's IT services could contain errors or defects that the Group has not detected and that could materially and adversely affect the performance of the IT services and negatively impact the demand therefor. Despite testing by the Group, errors have occurred and will likely continue to occur in the Group's IT services from time to time. Furthermore, any errors in IT services could result in the need to provide concessions and corrective measures to existing customers in order to maintain their business. Resources committed for such purposes mean they cannot be used elsewhere, which could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, IT services failures could cause system or other failures for customers who may assert warranty and other claims for substantial damages against the Group under the Group's contracts. For example, the Group has contracts with customers in the Public sector segment for the development of IT payments systems designed for the distribution of benefits and pension payments to people in Denmark. If there were to be a failure in such IT payments system, such that benefits due were erroneously calculated and incorrectly distributed, the Group could be held responsible for the customer's loss. The Group may also be required to provide additional hours of IT services without charge in order to cure delivery failures. Any claim brought against the Group, even if unsuccessful, could be expensive to defend and require the expenditure of significant resources and might also materially adversely affect the Group's market reputation. In addition, many of the Group's arrangements with customers include service level agreements ("SLAs"), and failure to deliver on time, or with the quality agreed in the SLA, may lead to warranty claims, additional hours of IT services without charge, penalties, or, ultimately, a partial reduction of the Group's total consideration. Any such defects or errors in the Group's IT services and their delivery could result in the loss of orders or a delay in the receipt of orders and could result in reduced operating revenue, delays in market acceptance, diversion of development resources, product liability claims or increased service and warranty costs, any of which could have a material adverse effect on the Group's business, financial condition and results of operations. The Group attempts to manage by contract its liability for damages arising from negligent acts, errors, mistakes or omissions in rendering its IT services, and typically only accepts liability for financial losses resulting directly from failures of its IT services and typically attempts, where possible, to include provisions that put a limit on its liability. However, there can be no assurance that the Company is able to contractually limit its liability or that any such contractual limitations would be enforceable or will otherwise protect the Group from --- liability for damages. Certain contracts awarded through Public sector tenders provide for liability for more than just direct losses. For both Public and Private sector contracts, certain categories of damages are typically not limited in amount, for example, breaches of confidentiality and data protection obligations, gross negligence, wilful misconduct or infringement of third-party intellectual property rights. In addition, certain contracts contain a right for the customer to claim restitution, i.e., return of all received payments pursuant to the relevant contract, in the event of material unremedied breach of the contract. Any such liability could have a material adverse effect on the Group's business, financial condition and results of operations. ## 2. The Group's ability to attract and retain both IT professionals and customers depends on the Group's reputation in the marketplace. Negative media coverage and public scrutiny may adversely affect the Group's business and the price of the Shares The Group's reputation is a significant factor in the Group's ability to attract and retain both IT professionals and customers. The Group's brand and reputation are important corporate assets that the Group believes help distinguish its IT services from those of its competitors and also contribute to the Group's efforts to recruit and retain talented employees in markets where the Group operates. However, the Group's reputation is potentially susceptible to damage resulting from failure to meet contractual milestones (i.e., its ability to deliver on time, on scope and on budget), critical operational incidents or by actions or statements made by or concerning current and former customers, competitors, vendors, adversaries in legal proceedings, government regulators, current and former employees, as well as members of the investment community and the media. Media coverage and public scrutiny of business practices, policies and actions has increased dramatically over the past several years, particularly through the use of Internet forums, blogs and other social media. Certain of the Group's competitors in the Nordic region have recently been subject to negative press and public comment in connection with delivery failures on certain Public sector contracts. The Group's projects in the Public sector segment are particularly susceptible to public scrutiny and reputational risk. Many of the Group's customers in Denmark are part of the Danish public benefits system and use the Group's solutions directly or indirectly to pay out social benefits to Danish citizens, including unemployment and social welfare benefits and pension payments. Any delay or incorrect calculation or distribution in the payment of such benefits could directly adversely affect a large number of people that may depend on such payments for their livelihood and well-being. Regardless of the Group's actual responsibility in such a scenario, it is likely that public authorities, media and public opinion would be quick to point out the involvement of the Group. In addition, the Group provides other services within the Public sector segment that are unrelated to benefit payments, which are frequently used by a large number of Danish citizens, who are likely to immediately notice and be affected by any failure in such system. For example, the Group's IT services provide the crucial technology behind the Danish national car registration platform Motorregistret ("Motorregistret") (within the Danish Customs and Tax Administration), as well as AULA, a Danish countrywide network that, once fully implemented by 2019, will allow teachers, pupils and parents to communicate online. AULA is expected to have over 2 million daily users, and Motorregistret is used every time ownership of a car is transferred or a new car is purchased in Denmark. The failure of either system, or any similar system provided by the Group which has a large and frequently active user base, could have a material adverse impact on the Group's reputation as a reliable IT services company. Any such reputational damage in connection with the Group's IT services in the Public sector segment is likely to reduce the Group's chances of winning future tenders and may also result in the termination of existing partnerships with Public sector segment customers due to public pressure on such customers. In addition, there is a risk that negative attention concerning the Group and/or its Executive Management, such as related to IT systems failure, cyber attacks or litigation, even if based on rumour or misunderstanding, could adversely affect the Group's business operations more generally. As a public company, the Group expects to be subject to greater media scrutiny and thus any such negative information could have an exacerbated effect. Damage to the Group's reputation could be difficult and time-consuming to repair, and could divert the attention of the Group's Executive Management from the business or make potential or existing customers reluctant to select the Group for new projects, all of which could result in a loss of business or adversely affect the Group's employee recruitment and retention efforts. Any unfavourable publicity may also adversely impact investor confidence in the Group's financial condition and result in divestments of the Shares, which may lead to a decline in the price of the Shares. Such consequences could have a material adverse effect on the Group's business, financial condition and results of operations. 58 --- 59 3. The Group’s success depends upon its management team, highly skilled IT professionals and consultants, its ability to hire, attract, motivate, retain and train such personnel and the Group’s wages are subject to wage inflation The Group’s success to date has depended to a significant extent upon, and the Group’s future success will also depend upon, its ability to attract and retain members of its management team as well as highly qualified IT professionals and consultants. In particular, the Group must attract, train and retain appropriate numbers of talented people with diverse skills, including project managers, IT engineers and other senior technical personnel, in order to serve customer needs and grow the Group’s business. If the Group is unable to do so, its ability to develop new business and effectively lead its current projects could be jeopardised. Insufficient intake of new consultants will make it impossible for the Group to continue to grow, as the vast majority of its revenue is generated from billable hours sold. The Group’s consulting career model resembles a pyramid. IT professionals start as “Consultants” (representing 42% of the total number of the Group’s IT professionals in December 2017), and from there they may be promoted to “Senior Consultant” (34%), “Manager” (18%), “Principal” (4%) and eventually “Partner” (2%). The Group’s strategy for the staffing of projects closely reflects this structure even for larger projects which are broken down into smaller teams, and the Group therefore depends both on retaining skilled senior personnel higher up in the pyramid structure and on consistently hiring new junior personnel. The Group focuses its recruiting efforts on graduates within specific fields of studies of certain universities which it believes have curricula that are particularly suited to prepare students for the requirements of the Group’s business. If the Group’s preferred universities were to change their curricula, have a decrease in the number of students enrolled and/or graduating, or if graduates of such universities were to become less interested in working for the Group for any reason, this could have a material adverse impact on the Group’s ability to attract and retain qualified IT personnel. In addition, to supplement its pool of talent, the Group relies to a certain extent on IT personnel recruited outside of Northern Europe, including personnel based in Poland and, more recently, Vietnam. Certain of the Group’s employees based in Poland may be required to travel to projects in Denmark, Norway or the United Kingdom, depending on staffing needs. Any impediments on the ability of its personnel to travel, including as a consequence of Brexit, could have a material adverse impact on the Group’s ability to staff its projects and, consequently, its ability to meet delivery milestones. Accordingly, the Group must ensure that all personnel, regardless of location, not only possess the requisite skill and experience but also are capable of assimilating into the Group’s culture and fill in as necessary on any given project based on project needs. Competition for senior management in the Group’s industry is intense, and the Group may not be able to retain senior management or attract and retain new senior management in the future. It is also difficult for the Group to find senior management matching the agility and culture of the Group. For example, senior managers of competitors are often used to roles with mostly overhead management and supervisory functions, instead of actively participating in the delivery of IT services in a way the Group’s senior management typically does. The lack of sufficient senior management who can be inserted into any organisations acquired by the Group would make it difficult for the Group to ensure that its methodology is properly implemented and applied throughout the organisation. The Group may also lose benefits expected from acquiring organisations if it fails to retain their senior management or other qualified employees, including the former partners of Hunter Macdonald Ltd who recently joined the Group as part of the acquisition. The Group’s competitors may also actively seek to recruit senior management personnel of the Group and other key employees and may succeed in such efforts. In addition, as part of being a publicly-listed company, some of the Group’s key senior management may no longer be able to devote a significant amount of time to, and therefore may become less involved in, the daily business. The inability to recruit, train or retain new personnel and the loss of a member of the Group’s senior management or other key personnel could have a material adverse effect on the Group’s business, financial condition and results of operations. The Group has experienced wage inflation in all of the markets in which it hires employees as a result of competition for personnel with the special IT skill sets its business requires. The Group expects to continue to experience wage inflation in the future, but it may be higher than expected and the Group may be unable to maintain its margins by passing on higher employee costs to customers through price increases, which could have a material adverse effect on the Group’s business, financial condition and results of operations. --- 60 4. The Group may not be able to protect itself against cyber threats that have the potential to significantly disrupt the Group and its customers' services As a provider of IT solutions, the Group has high exposure to cyber security risk. The Group uses various applications internally to develop solutions for its customers and also accesses clients' networks and production environments which may be subject to cyber threats. The financial and strategic importance of certain of the Group's customers, particularly in the Public sector segment as well as companies with global operations, increases the Group's susceptibility to attacks from cybercriminals and nation-state cyber espionage. Any such cyber-attacks may compromise the confidentiality, integrity and availability of information systems and business data of the Group or its customers. Cyber risks generally fall into three broad categories: (i) systems may be hacked and data locked, and the hackers then demand a ransom to release the data; (ii) hackers attack with the intention to harm or even destroy a company's IT infrastructure with no obvious monetary benefit; or (iii) hackers attack with the intent to obtain sensitive data, such as confidential industrial information, bank details or personal data, in order to gain monetary benefits by selling or misappropriating such data. The scope of cyber-attacks has in the past five years developed such that cyber-attacks now occur on a daily basis. While the vast majority of these attacks do not reach a level of sophistication that could pose a threat to the Group or its customers, the Group may not be able to stop cyber-attacks despite its efforts to continually monitor and assess its security organisation in terms of resources and service offerings. In addition, the Group may not be able to adapt to new threats. An increase in social hacking (for example, unauthorised third parties attempting to gain credentials, access or information through direct personal interaction with the Group's employees) also creates a risk for the Group. Human error by the Group's personnel poses a constant risk and the Group's efforts in awareness training and process improvements are unlikely to remove all risk of potentially negative consequences of human error. There can be no assurance that IT security incidents or breaches will not occur in the future, or that future security incidents, breaches and other issues will not have a material impact on the Group's business or that its procedures will be sufficient to address such future IT security incidents, breaches and other issues. The Group frequently experiences distributed denial-of-service ("DDoS") attacks, which are cyber-attacks where the perpetrator seeks to make a machine or network resource unavailable to its intended users by disrupting services of a host connected to the Internet. The denial-of-service is typically accomplished by flooding the targeted machine or resource with superfluous requests in an attempt to overload systems and prevent some or all legitimate requests from being fulfilled. Despite the Group's forward planning and disaster recovery procedures, the occurrence of any DDoS attacks could lead to interruptions, delays or shutdowns, potentially causing harm to the Group's and its customers' business by making critical data, including personal data, temporarily inaccessible. The Group has committed considerable resources to enhancing the security of its systems and works closely with internet operators to help define and configure filters for malicious traffic on its lines. Such efforts may not be sufficient to defend against DDoS attacks in the future. In addition, the Group's customer contracts, particularly in the Public sector segment, typically require it to comply with certain security obligations, including maintaining network and system security, providing security patching, antivirus and malware detection and prevention services, intrusion detection and prevention as well as ensuring the credentials of the Group's employees who interact with such customers. There can be no assurance that the Group will be able to comply with all of these obligations, which may result in it no longer being able to provide certain services to customers, the termination of particular contracts or liability for the Group. The occurrence of any cyber threats, such as the theft or unauthorised use or publication of the Group's or the Group's customers' confidential information or other proprietary business information as a result of an IT security incident, could expose the Group to liability, adversely affect the Group's competitive position and reputation, and reduce marketplace acceptance of the Group's IT services, whether or not the incident is ultimately determined to be the Group's fault. In particular, with respect to the Group's customers in the Public sector segment, many IT solutions and systems developed and maintained by the Group involve the processing of sensitive personal data. Any theft, unauthorised use or publication of such sensitive data is likely to materially damage the Group's reputation. If the Group's IT systems are compromised resulting in reputational harm or its inability to deliver solutions to customers, this could have a material adverse effect on the Group's business, financial condition and results of operations. See "The Group's ability to attract and retain both IT professionals and customers depends on the Group's reputation in the marketplace. Negative media coverage and public scrutiny may adversely affect the Group's business and the price of the Shares". --- 5. The Group may not be successful at identifying, acquiring or integrating other businesses or technologies As part of its overall growth strategy, the Group seeks to gain market share in Northern Europe and continuously evaluates potential acquisition opportunities in Northern European countries. It is possible that the Group may be unable to identify suitable targets for acquisitions or other strategic partnerships, and therefore may not complete the number and type of acquisitions for which the Group plans. The Group intends to focus only on acquisition targets that it considers to be a good strategic and cultural fit, and such opportunities may be limited. The Group’s expansion opportunities are further limited by its primary focus on European countries with an advanced digitalisation agenda. Even if the Group is able to identify a potential acquisition target, it may not be able to complete the acquisition on commercially reasonable terms and may only discover well into the process, after a substantial amount of time and resources have been expended, that the target is not a suitable strategic or cultural fit. In addition, there can be no assurance that the Group will correctly identify and evaluate potential risk related to acquisition targets during its due diligence exercise prior to any acquisition. Further, if the Group is able to complete an acquisition, it may experience difficulty in assimilating the acquired company’s personnel, operations, technology and software. In addition, the key personnel of the acquired company may decide not to continue to work for the Group. These difficulties could disrupt the Group’s ongoing business, distract its management and employees and increase expenses. If the Group is inefficient or unsuccessful at integrating any acquired businesses into its operations, it may not be able to achieve anticipated rates of growth, synergies, increases in market share, profitability or competitive position in specific markets or services or achieve other anticipated benefits. In November 2016, the Group acquired the Norwegian-based company Mesan AS as an entry platform into the Norwegian market. In October 2017, the Group acquired the UK-based company Hunter Macdonald Ltd as an entry platform into the UK market. While the Group has now completed the integration of Mesan AS and has started integrating Hunter Macdonald Ltd, it likely will take a longer time and require more resources, before Hunter Macdonald Ltd is fully integrated and the Group can begin to realise the full benefits of the acquisition. In addition, in the Public sector segment, the integration of Hunter Macdonald Ltd will require the establishment of a UK onsite development organisation before the Group is able to scale its Public sector offerings in the United Kingdom. If the Group fails to successfully integrate Hunter Macdonald Ltd into the Group this could have a material adverse impact on its entry into, and market share in, the United Kingdom, which could have a material adverse effect on the Group’s business, financial condition and results of operations. The anticipated benefits expected from the Hunter Macdonald Ltd acquisition as well as from other future acquisitions are and will be derived from estimates that are inherently uncertain. Such estimates are and will be based on a number of assumptions made in reliance on information available to the Group and management’s judgments based on such information, including, without limitation, information relating to the business, results of operations or financial conditions of Hunter Macdonald Ltd or other future targets. While the Group has no reason to believe that estimated benefits are unrealistic with respect to Hunter Macdonald Ltd, the underlying assumptions are and will be inherently uncertain and subject to a wide variety of significant business, economic, and competitive factors, risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein. 6. Any inability to manage and sustain the Group’s growth could disrupt its business and reduce its profitability The Group has experienced rapid growth during the periods under review, including expansion through acquisition and significant growth in its employee base and scope of services and the Group has achieved a significant increase in margins. In recent years, the Group has expanded its IT services offerings to include infrastructure services, cloud offerings, mobility offerings and a 24/7 global service desk. In addition, the recent acquisition of Hunter Macdonald Ltd has added IT infrastructure consulting services to the Group’s service offering. As part of the Group’s 2022 strategy, the Group will focus on continuing what has made it successful while also leveraging the momentum from recent contract wins, through continuing to advance the digitalisation agenda, implement its business model and performance culture in acquired companies, enhance its talent pool and expand in Northern Europe. As of the date of this Offering Circular, the Group operates offices in four countries outside of Denmark. In addition, the Group’s integrated business model involves its professionals working at customer sites around the world. The Group’s growth to date has placed, and the Group expects its future growth will place, significant demands on the management team and other resources, and will require the Group to continuously develop and improve its operational, financial and other internal controls. The accuracy of the Group’s financial reporting is dependent on the effectiveness of its internal controls. Internal control over financial reporting has inherent 61 --- limitations, including human error, the possibility that controls could be circumvented or become inadequate because of changed conditions, and fraud. Because of these inherent limitations, internal control over financial reporting might not prevent or detect all misstatements or fraud. If the Group cannot maintain and execute adequate internal control over financial reporting or implement required new or improved controls that provide reasonable assurance of the reliability of the financial reporting and preparation of the Group's financial statements for external use, the Group could suffer harm to its reputation, incur incremental compliance costs, fail to meet its public reporting requirements on a timely basis, be unable to properly report on its business and results of operations, or be required to restate its financial statements. In particular, the Group’s continued growth will increase the challenges involved in: - recruiting, training and retaining technical, finance, legal and management personnel and consultants with the knowledge, skills and experience that the Group’s integrated business model requires; - maintaining high levels of customer satisfaction; - developing and improving the Group’s internal infrastructure, particularly its financial, operational, communications and other internal systems; - managing operating costs and remaining cost effective; - increasing and leveraging automation of the Group’s services; - achieving and maintaining economies of scale; - preserving the Group’s culture, values and performance-focused environment; - effectively managing the Group’s personnel and operations and effectively communicating to its personnel its core values, strategies and goals in line with its integrated business model; - operational and technological infrastructure; - tax structuring and transfer pricing policies; and - regulatory compliance. The challenges and scale increases described above may put pressure on the Group’s organisational and operational IT structure of having IT people leading IT people, as the Group may have to rely on a broader range of personnel such as sales and management personnel. Over the past couple of years, the annual organic growth rate of the Group’s employees has been well above 30%, corresponding to an annual net intake of between 150 and 300 new employees, in addition to a large number of employees added as part of the Group’s acquisitions of Mesan AS and Hunter Macdonald Ltd. The high growth rates and the increased number of larger projects heightens the need for cross-company planning and utilisation. The Group’s ability to maintain and renew existing engagements and obtain new business will depend, in large part, on its ability to attract, train and retain technical personnel with the skills that keep pace with continuing changes in IT, evolving industry standards and changing customer preferences. If new consultants do not progress in skill levels, at a sufficient pace and quality throughout their career stages, then the Group’s ability to staff large and complex projects may be adversely impacted. The Group’s profitability also depends on its ability to effectively utilise personnel with the right mix of skills and experience to support the Group’s projects. The processes and costs associated with recruiting, training and retaining employees places significant demands on the Group’s resources. In addition, the demands of changing technology, evolving standards and changing customer preferences may require the Group to redeploy and retrain the Group’s IT professionals. Any failure to address the increasing complexity of the Group’s organisation may lead to decreased speed and agility in executing the Group’s business, which could demotivate its employees, decrease customer retention and harm its ability to compete, each of which could have a material adverse effect on the Group’s business, financial condition and results of operations. 7. If the Group or its customers do not accurately forecast volumes required for fixed fee contracts or contracts with degressive price models, the total contract value of its contracts could be lower than anticipated, and if the Group’s pricing does not anticipate the cost and complexity of performing its work, the Group’s contracts could be unprofitable The Group offers IT services to its customers under various types of contracts. Depending on the complexity of the IT services being delivered, the pricing mechanisms in the Group’s contracts are variable (where the fees 62 --- are typically based on the Group’s time spent and materials used), fixed, or a mix of both (for example, a contract may provide for a fixed fee for the development stage and then become variable-priced in the maintenance and operations stages). In the Public sector segment, the Group’s split between fixed price contracts and time and material contracts (i.e., variable contracts for which fees are typically based on the Group’s time spent and materials used) based on number of contracts was approximately half for the year ended 31 December 2017. 71% of Public sector segment revenue for the year ended 31 December 2017 was generated from fixed price contracts. The pricing of fixed price contracts is complex and highly dependent on the Group’s internal estimates, predictions and assumptions for the Group’s projects and, in particular, the cost of providing the relevant IT services. These estimates, predictions and assumptions might be based on limited data and could turn out to be inaccurate. If the Group does not accurately estimate the scope of the Group’s costs and timing for completing projects, its fixed price contracts could prove unprofitable for the Group or yield lower profit margins than anticipated. The Group may have limited ability to increase the profitability of a loss-making contract because many fixed price services agreements only allow the customer to cancel for convenience and/or include provisions in the contract reducing the Group’s ability to leverage more cost-effective delivery models. Contracts entered into on a variable price time and materials basis, but subject to caps on fees, purchase price adjustment mechanisms or similar arrangements that constrain the fees the Group can charge but do not limit the Group’s potential costs, are subject to similar risks. In addition, if the Group does not accurately forecast the volumes of time and materials required for time and materials contracts, the total contract value of the Group’s contracts could be lower than anticipated. The Group’s pricing, cost and profit margin estimates for the work that the Group performs under its fixed fee contracts may include anticipated long-term cost savings from transformational and other initiatives that the customer expects to achieve and sustain over the life of the contract. There is a risk that the Group will underprice the Group’s projects, fail to accurately estimate the costs of performing the work or fail to accurately assess the risks associated with potential contracts. For example, in 2015 the Group’s average hourly rate billed to customers was significantly negatively impacted by a single loss-making project which was initiated in 2014, related to the Group’s push to enter into the Danish trade union subsector of the Private sector segment. Any increased or unexpected costs, delays or failures to achieve anticipated cost savings, or unexpected risks that the Group encounters in connection with the performance of its work, including those caused by factors outside the Group’s control, could have a material adverse effect on the Group’s business, financial condition and results of operations. For multi-year operations contracts, the Group commonly uses so-called “degressive price models”, as customers typically expect hardware to be less expensive when it has to be renewed and therefore expect that the service provider will reduce the price for services charged on a “like for like” basis. Under such contracts, the Group commits to price reductions on “like for like services” (i.e., price degressions) over the term of the contract in order to win the business. There is a risk that the cost of running the outsourced business cannot be reduced sufficiently to match the degressive price model, and this is particularly the case in second or third generation outsourcing contracts. There is also a risk that the trend of degressive pricing may in the future increasingly apply to other contract types where the Group’s ability to reduce its costs is limited. Conversely, certain consulting and services frame agreements currently allow for price increases in accordance with general or specific price indexes. There is a risk that the referenced index or price adjustment model will prove insufficient in a market with rapidly increasing wage inflation. Any of these risks related to degressive price models or contracts with price adjustments could, if they materialise, have a material adverse effect on the Group’s business, financial condition and results of operations. 8. Changes in laws and regulations or changed interpretation or enforcement of such laws and regulations may sometimes be unpredictable, which could adversely affect the Group’s business. In particular, changes in Danish tax laws, privacy and data protection regulations and national security regulations, if adopted, could adversely affect the Group’s business The Group is subject to laws and regulations applicable to IT service companies in the jurisdictions in which it operates, including laws and regulations on privacy and data protection, tax, unionisation, labour and employment, competition, and marketing. Changes in laws and regulations applicable to the Group or the introduction of new laws and regulations could increase compliance costs, mandate significant and costly changes to the way the Group implements its IT services and structures its contracts, require additional certifications and threaten its ability to continue to serve certain markets and certain customers. In addition, changes in tax laws, treaties or regulations could impose additional taxes on the provision of the Group’s IT services, resulting in lower profitability. 63 --- Given the ongoing debate in Europe as well as in other countries about offshoring (i.e., the relocation of the production of certain products or the delivery of services to overseas countries), the introduction and consideration of restrictive legislation or regulations aiming to impede, reduce or stop offshoring is possible. If such legislation, or privacy legislation with the same effect on the European market, was adopted, this could adversely affect the Group's business if the Group was to increase its reliance on sourcing resources in Vietnam or other jurisdictions. If enacted, such measures could also broaden existing restrictions on offshoring by governmental bodies, thereby affecting customers in the Group's Public sector segment, and on government contracts with firms that outsource services directly or indirectly. In addition, if such measures were adopted, they could impact the Group's Private sector segment with restrictions such as tax disincentives, fees or penalties, intellectual property transfer restrictions, mandatory government audit requirements and new standards that have the effect of restricting the use of certain business and work visas. In the event that any of these measures become law, the Group's operating revenue and profitability could be adversely affected and its ability to provide IT services to its customers could be impaired, which could have a material adverse effect on the Group's business, financial condition and results of operations. 9. Privacy and data protection compliance breaches or failure to protect confidential information could harm the Group's reputation and expose it to litigation and/or other legal or regulatory actions and/or sanctions The Group is subject to a number of laws relating to privacy and data protection, including the following laws and regulations currently in effect: The Danish Act no. 429 of 31 May 2000 on Processing of Personal Data (Persondataloven), the Norwegian Personal Data Act (Personopplysningsloven), the Polish Data Protection Act (Ustawa o ochronie danych osobowych), the Vietnamese Law on Cyber Information Security (Luât An Toàn Thông Tin Mạng), and the UK Data Protection Act 1998, as well as relevant non-EEA data protection and privacy laws. Such laws and regulations govern the Group's ability to collect, use, process and transfer personal information relating to its customers and their clients, as well as its employees and others. The Group relies upon third party contractors and its own employees to process personal data relevant for the IT services it offers. Therefore, the Group is exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, damaged and/or processed in breach of applicable privacy and data protection laws and regulation. For example, the mechanisms for data export are under judicial scrutiny: the validity of personal data transfers under the European Commission's standard contractual clauses has been challenged in Ireland and questions on the case are currently being referred to the Court of Justice of the European Union. While the Group does not currently export personal data outside the EEA, if the standard contractual clauses are invalidated by the Court of Justice of the European Union, any future data flows to Vietnam and other non-EEA jurisdictions could be disrupted. With effect from 25 May 2018, the Group will also be subject to the EU General Data Protection Regulation (Regulation (EU) 2016/679) (the "GDPR") which will place more onerous obligations on the Group in relation to privacy and data protection compliance. The GDPR intends to harmonise data protection laws across the European Union as it is directly binding and applicable in all EU Member States. The GDPR will re-affirm and strengthen already existing requirements and will require controllers and processors of personal data to, among other things, implement more stringent operational requirements, including, for example, mandatory contractual provisions in data processing agreements, expanded disclosures about how personal data is to be used, increased requirements to comply with requests from individuals and mandatory data breach notification requirements. Fines for non-compliance with the GDPR are expected to rise significantly, including fines of up to 4% of global annual revenue for private companies (as set out in the GDPR) and expectedly up to DKK 16 million for Danish public sector organisations and authorities (subject to the adoption of a new Danish data protection law expected to take effect from 25 May 2018 if adopted in time). In Denmark, it is further expected that damages to be paid in case of infringements or breaches of the GDPR and/or the new Danish data protection law will amount to DKK 25,000 per relevant individual. As such, this could add up to significant sums if infringement and/or breaches relate to a larger group of individuals. In addition, the potential consequences for the Group could be even larger due to the reputational impact of not being able to handle personal data, and especially sensitive personal data, in compliance with the GDPR and other applicable laws, in particular in connection with the Group's large Public sector projects. Furthermore, in accordance with the current draft for a new Danish data protection law, a person (for instance, a member of the board or a partner) who is responsible for a violation of the data protection rules may be subject to imprisonment up to 6 months which also would entail significant reputational damage (as mentioned above, the new Danish data protection law is expected to take effect from 25 May 2018 if adopted in time). The Group has taken steps to prepare for the implementation of the GDPR but there is a risk that such measures may not be deemed sufficient in order to comply with the regulation or regulatory guidance. 64 --- Additionally, the penalties for the Group for any breach of the GDPR is more severe than under the current laws relating to privacy and data protection. The GDPR will replace the current national laws of EU/EEA-countries, which means that the above-mentioned Danish, Norwegian, Polish and UK laws on processing of personal data will to a large extent be replaced by the GDPR and any local legislation that implements it. While the GDPR does allow for certain national derogations, it will generally harmonise the rules for processing of personal data within the EU/EEA. If the Group, or any of the third party service providers on which it relies, fails to store, transmit or otherwise process confidential or personal data of its employees, customers and their clients, whether online or offline, in a secure manner, or if any unauthorised or unlawful loss, disclosure or destruction of confidential or personal data were otherwise to occur, the Group may be subject to claims from third parties relating to the infringement of privacy rights and/or investigative or enforcement action (including criminal proceedings and significant fines) by regulatory jurisdictions in which the Group operates. While the Group strives to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection, it is possible that such requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or the Group's practices. Any perceived or actual failure to comply with data protection laws or to protect confidential or personal data may harm the Group's reputation and credibility, adversely affect revenue, reduce its ability to attract and retain customers, result in litigation or other actions being brought against the Group or cause the imposition of fines, and could have a material adverse effect on the Group's business, financial condition and results of operations. ## 10. The Group and its customers are subject to extensive legislative, industry and business requirements, and the Group or its employees may inadvertently violate certain laws and requirements as a consequence of the Group's rapid growth The markets in which the Group operates are subject to changes in legislation that directly impact it, but the Group may also be indirectly impacted by changes in the legislation governing its customers to the extent its contracts with customers place all or parts of the burden of complying with legislation on the Group. The Group may not be able to timely adjust to all legislative changes, industry or business requirements, which could result in fines or other sanctions and may have a material adverse effect on the Group's business, financial condition and results of operations. The increasing size and scope and diverse nature of the Group's operations raise the possibility that a member of its personnel will engage in unlawful or fraudulent activity, breach the Group's Code of Conduct and its Anti-Bribery and Anti-Corruption Policy, internal policies or contractual obligations, or otherwise expose the Group to unacceptable business risks, despite the Group's significant efforts to train its people and maintain internal controls to prevent such instances. The Group may be unable to monitor subcontractors and enforce its supplier conduct principles, which would increase the risk of failing to meet customer obligations in respect of supply chain management. If the Group does not continue to develop and implement the right processes and tools to manage the Group's enterprise, it will be exposed to heightened operational risks and its ability to achieve its business objectives could be impaired. Any of the above developments could have a material adverse effect on the Group's business, financial condition and results of operations. ## 11. The Group is subject to the risk of reduced customers' IT expenditure levels As an IT services company, the Group is dependent on its customers' continued investments in IT. The Group's customers both within the Private sector and Public sector segments may reduce IT expenditure levels for a variety of reasons, including as part of broader cost-cutting programmes in response to adverse market conditions, as part of implementing strategic objectives, or otherwise. Such reduction in IT expenditure levels may mean fewer IT projects for the Group, smaller scale IT projects and/or increased price pressure on existing or new projects. Economic volatility and uncertainty is particularly challenging because many of the projects the Group undertakes for customers require major investments by them and customers are less willing to make such investment decisions in uncertain economic conditions. Volatile, negative or uncertain economic conditions in the Group's customers' markets, particularly Denmark, have undermined, and could in the future undermine, business confidence and cause customers to reduce or defer their spending on new initiatives and technologies, or may result in customers reducing, delaying or eliminating spending under existing contracts or putting pressure 65 --- on pricing. In addition, international, national or local political volatility could in the future negatively impact the Group and its employees. The Group has offices in Denmark, the United Kingdom, Norway, Poland and Vietnam, and is subject to risks relating to the economic or political conditions of such countries. See “The Group’s international operations are subject to certain risks inherent in doing business internationally” in this section. The Group derives a significant proportion of its revenue from its Public sector segment (52% for the year ended 31 December 2017 and 55% for the three months ended 31 March 2018). As a service provider to Public sector customers, the Group is impacted by financial, budgetary, regulatory or political constraints, or changes in government policy and public spending constraints, which could have a significant impact on the size, scope, timing and duration of contracts and orders placed by them and, therefore, on the level of business which the Group will derive from such customers. A substantial part of the Group’s business is therefore dependent on, and susceptible to, changes in governmental policies, as well as budget priorities and regulatory or political constraints or attitudes, in particular those relating to the provision of public services and the attitude to outsourcing of services and activities to the private sector, any of which could have a significant impact on the number, size, scope, type, timing and duration of contracts, and therefore, on the level of business that the Group may win. Such factors could also result in a suspension, cancellation, termination or non-renewal of existing contracts. Accordingly, the Group is subject to risks and uncertainties associated with periodic changes in governments following national elections, particularly in Denmark, where the Group derives a majority of its revenue. Any such reduced expenditure on IT services by the Group’s customers in the Public sector or Private sector segments could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 12. Transformation into a listed public company will increase the Group’s costs and may disrupt the regular operations of its business and require adjustments of certain policies, procedures and strategies The Group expects to incur additional legal, regulatory, finance, accounting, investor relations and other administrative expenses as a result of having publicly traded Shares. The additional demands associated with being a public company may disrupt regular operations of the Group’s business by diverting the attention of some of the Group’s senior management team members away from revenue-producing activities to management and administrative oversight, adversely affecting the Group’s ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing the Group’s businesses. The Group will have to adjust certain policies and procedures as a consequence of being a publicly traded company to be in line with those of peers which are publicly-traded, and to meet listing requirements and shareholder expectations. For example, in anticipation of becoming a publicly traded company, the Group has increased overall Executive Management remuneration in line with other publicly traded companies. See “Board of Directors, Executive Management and Key Employees—Incentive Programmes”. ## 13. Adverse events affecting the stability and standing of the European Union as a single market may have a negative effect on global economic conditions, financial markets and the Group’s business The Group is headquartered in Denmark and operates principally in Europe. Adverse events affecting European economies, including sovereign debt and economic crises in certain EU member states, and, more recently, the UK referendum to withdraw from the European Union in June 2016 (referred to as “Brexit”), have raised a number of questions regarding the stability and overall standing of the European Union as a single economic and monetary area. Despite measures taken by EU member states and the European Central Bank to alleviate credit risk in light of the sovereign debt crises, concerns persist with respect to the overall stability and suitability of the Euro as a single currency. Moreover, although it is subject to further negotiations until March 2019, the Brexit referendum continues to create significant uncertainty about the post-Brexit relationship between the United Kingdom and the European Union, including whether the United Kingdom will be able to continue to benefit from the European Union’s freedom of movement of persons and services and similar agreements, and the potential divergence of national laws and regulations as the United Kingdom determines which EU laws to replace or replicate. The continued uncertainty during and after the period of negotiation may cause increased volatility and 66 --- potentially have a negative economic impact on the markets, particularly in the European Union. Moreover, Brexit could also raise concerns relating to the future standing of the European Union overall, as other EU member states could similarly consider withdrawal. While change creates opportunities for IT services companies and new and updated IT systems will be required for the UK government following Brexit, prolonged uncertainty may mean that UK Public sector entities are reluctant or unable to commit to IT projects and therefore any potential upside for the Group resulting from Brexit cannot be assured and may be limited. Adverse political developments, or the perception that any of them could occur, have had and are likely to continue to have a material adverse effect on global economic conditions, exchange rates and on the stability of global financial markets, particularly in the European Union. Asset valuations, currency exchange rates and credit ratings may be subject to increased market volatility (see “The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies” for further details on current and potential future effects of fluctuations in currency exchange rates on the Group). If the United Kingdom and the European Union are unable to negotiate acceptable Brexit terms or if other EU member countries, including Denmark, pursue withdrawal, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 14. The markets in which the Group competes are highly competitive, and the Group might not be able to compete effectively The Group operates in a highly competitive and rapidly changing global marketplace and competes with a variety of organisations that offer services similar to those the Group offers. The Group’s current competitors include: - large multinational IT services companies, including the services arms of large global technology providers (hardware, equipment and software), that offer some or all of the services the Group offers; - offshore IT services companies in lower-cost locations, particularly large IT outsourcing companies based in India that offer services similar to some of those of the Group, often at highly competitive hourly rates or contractual terms; - providers of cloud services and solutions that offer IT infrastructure as a service on usage-based terms, commoditising certain basic infrastructure components of services included in the Group’s service offerings; - accounting and management consulting firms that have expanded or are in the process of expanding, including through acquisitions, their IT infrastructure consulting services in areas that compete with the Group; - new disruptive IT services companies approaching the IT services market differently than existing incumbents and other players; - niche service providers and local competitors that compete with the Group in a specific industry segment or service area, including companies that provide new or alternative products, services or delivery models; and - in-house IT departments, that use their own resources, rather than engage an outside firm, to provide the types of services the Group provides. Existing vertically integrated companies that provide hardware, software or equipment and services, or those formed through industry consolidation, may be able to provide a more attractive integrated offering (including services that the Group would otherwise provide), particularly where services are standardised. If buyers of IT services favour using a single integrated provider, such buyers may direct more business to such competitors, and this could have a material adverse effect on the Group’s business, financial condition and results of operations. The number and types of competitors may expand as the Group completes any additional acquisitions. Even if the Group has potential offerings that address marketplace or customer needs, its competitors may be more successful at selling similar services, including to the Group’s own current customers. Competitors may offer more aggressive contractual terms or compete on pricing in a manner that the Group is not willing or able to 67 --- match on a sustained basis in light of its size and financial condition, which may affect its ability to obtain new business. Some of the Group’s competitors are companies that have greater financial, marketing or other resources than the Group has and, therefore, may be better able to compete for new business and skilled professionals. In addition, the Group may face increasing competition from new market entrants that are not currently present or not materially present in the Group’s markets. For example, major India-based outsourcing companies, who generally have a lower wage base than the Group in some areas, may in the future provide comparable services at lower prices, putting the Group under increased pricing pressure, and the Group may not be able to quickly adjust its integrated business model to find other sources of higher margin revenue. If the Group is unable to compete successfully, it could lose market share and customers to competitors, which could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 15. The Group’s results of operations could be negatively affected if it cannot adapt, expand and develop its IT services in response to changes in technology, customer demand, or market developments The market for IT services is characterised by rapid technological change, frequent new product introductions, technology enhancements, increasingly sophisticated customer requirements and evolving industry standards. The Group’s future success depends on its ability to continue to develop, market and implement IT services that are attractive, timely and cost-efficient for its existing and new customers. This requires the Group to continue to anticipate and respond to rapid and ongoing changes in technology, industry developments and IT services offerings in order to serve the evolving needs of its customers. The Group’s growth strategy focuses on responding to these types of changes by continuing to develop the Group’s IT services offerings through innovation, by utilising new technology to meet customer needs, and by having an agile workforce that is easily adaptable to new technologies. If the Group does not continue to adapt, expand and develop its IT services in response to changes in technology or customer demand, the Group’s ability to remain competitive and continue to grow could be negatively affected, which could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, companies in the industries the Group serves sometimes seek to achieve economies of scale and other synergies by combining with or acquiring other companies. If one of the Group’s current clients merges or consolidates with a company that relies on another provider for the IT services the Group offers, the Group may lose work from that client or lose the opportunity to gain additional work if the Group is not successful in generating new opportunities from the merger or consolidation. At any given time in a particular industry or geography, one or a small number of clients could contribute a significant portion of the Group’s revenues, and any decision by such a client to delay, reduce, or eliminate spending on IT services could have a material adverse effect on the Group’s business, financial condition and results of operations in the relevant industry and/or geography. Developments in the industries the Group serves could shift demand to new IT services. If, as a result, customers demand new IT services, the Group may be less competitive in these new areas or need to make significant investments to meet that demand. In addition, the Group operates in an environment in which there currently are, and the Group expects will continue to be, new entrants that may offer new IT services. New IT services offered by competitors or new entrants may make the Group’s offerings less attractive or less competitive, when compared to such alternatives. If the Group fails to keep up with technological changes or to convince customers of the value of its IT services in light of new market conditions, new technologies or new offerings by competitors, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 16. The Group’s success depends on its ability to retain customers and win additional work from existing clients The Group’s contracts generally do not give the Group a right to be the exclusive supplier of IT services to its customers. For example, certain of the Group’s contracts for advisory services relating to digital services are for specific projects or have variable pricing based on time and material spent by the Group and typically permit the customer to terminate the agreement on short notice. The Group’s infrastructure and application management outsourcing services, as well as services contracts with customers in its Public sector segment, are typically contracted for a period ranging from four (sometimes comprised of a two-year fixed term plus a two-year option) to ten years and generally require a longer notice period for termination and include an early termination fee to be paid to the Group; however, this fee might not be sufficient to cover the Group’s costs or make up for profits 68 --- lost upon termination of the contract. The Group sometimes enters into framework agreements, which typically relate to systems development and consulting engagements. Although the Group's framework agreements establish basic negotiated terms and some are even "one vendor contracts" where the full potential spend under the framework agreement is awarded to the Group, the Group's customers often have no financial commitment or minimum spending requirement. Further, a customer could choose not to retain the Group for the additional stages of a project, try to renegotiate the terms of its contract or cancel or delay additional planned work. If long-term customers are replaced by new customers on terms that are less favourable to the Group, or new customers do not become long-term customers, customer churn could have a material adverse effect on the Group's business, financial condition and results of operations. In addition to retaining existing customers, the Group's success also depends in large part on its ability to attract additional work from existing customers. If the Group's customers are not satisfied with the quality of the Group's work or with the types of IT services delivered or otherwise seek to renegotiate their contracts where possible (for example, as part of their internal cost-cutting initiatives), the Group could incur additional costs to address the situation and the profitability of such work might be impaired. During contract renegotiation, customers frequently request that the Group increase the quantity of the services supplied at a discounted price. Additionally, customers may also decline to extend contracts or may direct future business to the Group's competitors. Consequently, the Group's results of operations in subsequent periods could be materially lower than expected, which could have a material adverse effect on the Group's business, financial condition and results of operations. ## 17. The Group's work with Public sector customers exposes the Group to additional risks inherent in the Public sector contracting environment The Group works with Public sector entities in Denmark, the United Kingdom and Norway, which include central, provincial, state and local governmental entities. For the three months ended 31 March 2018, Public sector revenues accounted for 55% of overall Group revenue. Public sector projects differ from commercial contracts in the Private sector in that they are generally subject to Danish, UK and Norwegian public procurement rules which require IT services companies to participate in often lengthy and time consuming tender processes and are subject to re-tender processes at the end of their respective terms. Projects involving Public sector customers carry various risks inherent in the Public sector contracting process. These risks include the following: - terms and conditions of Public sector contracts tend to be more onerous for the Group than commercial contracts in the Private sector and may include, for example, more punitive service level penalties and less advantageous limitations on the Group's liability; - Public sector contracts are to a large extent fixed fee contracts which bear a higher risk of inaccurate scoping and miscalculated pricing. See "If the Group or its customers do not accurately forecast volumes required for fixed fee contracts or contracts with degressive price models, the total contract value of its contracts could be lower than anticipated, and if the Group's pricing does not anticipate the cost and complexity of performing its work, the Group's contracts could be unprofitable"; - certain contracts contain a right for the customer to claim restitution in the event of material unremedied breach of the contract; - terms and conditions of Public sector contracts usually have limited or no room for negotiation with a risk of rejection from the tender if the Group includes reservations that are deemed material; and - Public sector contracts are often subject to more publicity than other contracts. Any negative publicity related to such contracts, regardless of the accuracy of such publicity, may adversely affect the Group's business or reputation. The Group is dependent on its ability to continue to win tendered and re-tendered Public sector contracts over time. In the recent past, the Group has had a strong track record of won tenders and re-tenders. As of 11 May 2018, the Group has won 82% of the total number of the tenders in which it participated (for the period from January 2016 up until 11 May 2018). Many of the contracts for these tenders are based on standard contractual terms defined by the customers, i.e., the state or government agencies, and are therefore, by definition, customer-friendly. If the Group's success rate should decrease significantly, for example due to the Group's competitiveness and pricing (including as a result of aggressive pricing of competitors), an adjustment of the Group's risk appetite in bidding on tenders or for any other reason, the Group's business could be negatively affected. 69 --- If the Group were unable to manage these unique risks associated with Public sector work, this could negatively impact the ability to win Public sector contracts and the Group could lose existing contracts, which could have a material adverse effect on the Group's business, financial condition and results of operations. ## 18. A Public sector customer's decision following a tender won by the Group to award the contract to the Group may be challenged before administrative tribunals and/or courts and it is uncertain whether the Group will be successful in defending against such a challenge EU, Danish, UK and Norwegian public procurement rules governing the process of tenders and re-tenders of Public sector contracts provide, and procurement rules in other jurisdictions in which the Group may in the future make bids on public tenders may provide, for statutory complaint periods during which competing tenderers who lost a tender may challenge the public authority's decision to award a contract to the bidder who won the tender. Such challenges may be based on various grounds, mainly pertaining to the public authority's failure to ensure that the tender procedure complied with both the principles of equal treatment and transparency, such as the claim of the competing tenderer that it was not granted a fair chance of obtaining the contract. Such challenges have been made in the past and may occur in the future in relation to tenders awarded to the Group, which may delay the Group's provision of services under the contract. Further, such challenges would usually be lodged against the public authority, leaving the Group with limited (if any) possibilities for intervening or defending the claim. If the challenge of an award decision is successful, in Denmark the public authority will be obliged to terminate the contract (and certain public contracts provide the public authority with a right of termination in such situations), and in other jurisdictions the consequence may also be that that the Group will lose the contract. If the Group, as a consequence of the challenge of an award decision, loses the contract, this could have a material adverse effect on the Group's business, financial condition and results of operations. ## 19. The Group's insurance coverage may be insufficient Although the Group has product liability insurance coverage and IT consulting insurance coverage, there can be no assurance that any such coverage will continue to be available on reasonable terms, or that it will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. Further, the Group's insurance policies may not adequately limit the Group's exposure to certain types of claims. Maximum coverage under the Group's existing insurance policies is DKK 10 million. Due to the Group's continued growth, it is possible that the level of insurance coverage which was considered sufficient in the past will no longer be sufficient going forward and there is no assurance that the Group will be able to increase its coverage on acceptable terms. The successful assertion of one or more large claims against the Group that exceed any available insurance coverage or changes in the Company's insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements may result in significant reputational harm and could have a material adverse effect on the Group's business, financial condition and results of operations. ## 20. The Group may incur additional costs from its use of subcontractors and may be liable for their mistakes From time to time, the Group uses subcontractors to fill shortages in staffing or to satisfy needs for particular expertise. In addition, the continued use of subcontractors instead of employees is more prevalent in certain markets, such as the United Kingdom, where subcontractors accounted for 70.5% of the Group's workforce in the United Kingdom as of 31 March 2018. The Group is responsible for any errors caused by its sub-contractors in the same way it is for its own employees and there are generally higher costs associated with subcontractors, which could have a material adverse effect on the Group's results if the ratio of subcontractors to employers increases and if large volumes of major projects are assigned to subcontractors. In addition, in the United Kingdom, there are different rules applicable for payroll depending on whether the worker is an employee or a subcontractor. The relevant public authorities, rather than the person providing services, are responsible for determining the applicability of rules regarding payroll. If such rules are determined to be applicable, the Group is responsible for deducting taxes and ensuring pensions for the person providing services. If the Group was required to deduct taxes and ensure pensions for its subcontractors in the United Kingdom, this would result in additional costs to the Group. The Group's ability to offset these costs by reducing payments to such subcontractors may be limited if there is a shortage of subcontractors or other employees to perform the required services. These risks related to the use of subcontractors could, if they materialise, have a material adverse effect on the Group's business, financial condition and results of operations. 70 --- 21. The Group could be subject to liability if its strategic partners, vendors or service providers do not perform their obligations or deliver their project contributions on time or at all The Group’s business at times requires that its IT services incorporate or coordinate with the software, systems or infrastructure platforms of its strategic partners. The Group is also at times required to incorporate or coordinate its IT services with the software, systems or infrastructure platforms of other vendors and service providers that it considers crucial to its development efforts and an important part of its business strategy. For example, the Group uses a UK based company as platform provider for the education system solution AULA, and a Greek company’s platform as component for the Group’s tax platform solution. Some of these strategic partners, vendors, or service providers may also be the Group’s competitors in certain instances. The Group’s ability to serve its customers and deliver and implement its IT services in a timely manner depends on the ability of its strategic partners, vendors, and service providers to perform their obligations and deliver their products and services in a timely manner and in accordance with contractual and project requirements. It also depends upon the Group’s ability to effectively oversee their performance. The Group often relies on third parties, in particular to provide infrastructure outsourcing services, public cloud services, data centre services and certain transition and transformation projects, as well as to provide additional capacity when customer demand or contract sequencing requires it. Changes in the pricing or other terms of the Group’s agreements with its strategic partners, vendors, or service providers, or their failure to implement their services and deliverables in a correct and timely manner, could materially adversely affect the Group’s ability to perform under the contract and subject it to additional costs and liabilities or reputational damage, which could have a material adverse effect on the Group’s business, financial condition and results of operations. The Group is responsible to its customers for the timely and competent delivery and performance of some of its IT services by strategic partners, vendors, and service providers. When possible, the Group seeks to enter into back-to-back contracts with strategic partners, vendors, and service providers to pass on the Group’s risks of liability to customers due to failure by such parties to timely and competently perform their obligations. However, the Group is not always able to enter into such back-to-back contracts, for example with respect to license providers, public cloud providers or to some extent with data centre co-location providers. Such contracts also frequently limit liability to a large extent. Furthermore, even if the Group enters into a back-to-back arrangement, it may not eliminate its liability risk. For example, a service provider’s potential liability for damages or penalties may be capped or otherwise limited at a lower level than the Group’s own caps and limits with the Group’s customers, meaning that it may not be able to recover the full amount of its losses from a service provider (including as a result of the bankruptcy of a service provider) if at all, which could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, the Group depends to some extent on third parties for support services necessary to its business, including software and hardware vendors supporting products supplied to the Group. The failure of any of these third parties to adequately provide such support services could have a material adverse effect on the Group’s business, financial condition and results of operations. 22. The Group’s IT services could infringe upon third-party intellectual property rights and it may lose its ability to utilise the intellectual property of third parties The Group’s IT services, or the IT services of others that the Group offers to its customers by incorporation into the Group’s offerings, could infringe on third-party intellectual property rights. Although the Group is not aware of any material infringement claims, third parties may in the future assert claims against the Group or its customers alleging infringement of patent, copyright, trademark, or other intellectual property rights. Infringement claims could harm the Group’s reputation, result in liability for the Group or prevent it from offering some IT services. In the Group’s customer contracts, it generally agrees to indemnify its customers for certain expenses, costs or liabilities resulting from potential infringement of the intellectual property rights of third parties. The amount of the Group’s liability under these indemnities could be substantial and in many cases unlimited. Any claims that the Group’s IT services infringe the intellectual property rights of third parties, regardless of the merit or resolution of such claims, may result in significant costs in defending and resolving such claims, and may divert the efforts and attention of the Group’s management and technical personnel from its business. In addition, as a result of such intellectual property infringement claims, the Group could be required or otherwise decide that it is appropriate to: - discontinue using, licensing, or offering particular IT services subject to infringement claims; - discontinue using the technology or processes subject to infringement claims; 71 --- - develop other technology not subject to infringement claims, which could be costly or may not be possible; or - obtain future use rights. The occurrence of any of the foregoing could result in unexpected increased expenses or require the Group to recognise an impairment of its assets. In addition, if the Group alters or discontinues offering a particular IT service or solution as a result of an infringement claim, the Group’s operating revenue could be affected. If a claim of infringement were successful against the Group or its customers, an injunction might be ordered against its customers or its own operations, causing further damage. The Group presently licenses intellectual property from various third parties such as Microsoft and Oracle and other owners of proprietary software. The Group also uses software licensed under open source licenses such as Apache, Jenkins, nginx, Tomcat, JBoss, MySql, Drupal and other licenses placing certain obligations on the Group as licensor (e.g., in some instances including a requirement to make the source available to others under the same open source terms). The Group could face claims by third parties claiming ownership of what the Group believes to be open source software or non-compliance with open source licensing terms. Any infringement of such licenses by the Group or its customers, for example by not obtaining the correct number of licences or by exceeding the scope of such licenses, could lead to substantial costs to the Group and have a material adverse effect on the Group’s business, financial condition and results of operations. ## 23. The widespread use of the Group’s Modulus platform by, and the high market share among, trade unions exposes the Group to the risk that competitors develop a platform that unions consider preferable to Modulus As of 23 May 2018, 15 of Denmark’s larger trade unions are customers of the Group using its Modulus platform to manage and process payments to members. The Modulus platform was developed by Tieto Enator (Danmark) and introduced in 2004. The Group acquired all of the shares of Tieto Enator (Danmark) (and subsequently disposed of the parts of the business that were not central to its strategy) and accordingly obtained the IP rights to Modulus. In connection with the implementation of Dagpengereform 2017, a reform of the Danish unemployment benefit system, the Group has significantly updated the Modulus platform to ensure customer compliance with the new requirements. Should a competitor introduce a new alternative platform that the Group’s union customers consider preferable, this could result in the loss of union customers. The economies of scale enjoyed by existing users of the Modulus platform would be lost if certain unions were to leave which could prompt others to leave as well, and thereby have a material adverse effect on the Group’s business, financial condition and results of operations. ## 24. A significant portion of the Group’s revenues depends on a limited number of customers The Group derived approximately 33.3% of its revenue for the year ended 31 December 2017 and approximately 37.8% of its revenue for the three months ended 31 March 2018 from its five largest customers, of which 94.7% were in the Public sector and 6.3% were in the Private sector. The Group believes that these five or the top five customers will generate between 25% and 30% of total Group revenue in 2018 due to expected new agreements and the expected continuation of existing agreements. As a result of this concentration, the Group’s business, results of operations and financial condition are significantly affected by the level of these five customers’ IT spending and their policies (particularly regarding procurement). Such customers may decide to cut costs, including by reducing their IT spending or obtaining better pricing from their service providers, including the Group, or may choose to terminate existing contracts and/or use service providers other than the Group. In addition, the Group has certain contracts under which it provides IT services for fixed terms. Once the contracts expire, the Group may lose a subsequent re-tender and thereby lose a customer. In this case, the Group may be unable to fully offset the loss of business. In addition, if one or several of its largest Public sector customers reduce their IT spending, or if they divert a portion or all of their future IT spending towards the Group’s competitors, or if the Group has to lower its prices to retain such customers, its revenue and profitability could be materially adversely affected. If any of these risks materialise, this could have a material adverse effect on the Group’s business, financial condition and results of operations. 72 --- 25. The Group’s rapid increase in market shares in certain areas may cause its customers, particularly within the Public sector segment, to give more business to the Group’s competitors in order to diversify, and competition regulations or authorities may limit the Group’s ability to grow and may force the Group to alter its business practices The Group’s strong growth in the past five years has resulted in the Group achieving rapid increases in market shares. The larger the Group’s market share in any given market, the higher the risk that certain customers, particularly customers in the Public sector segment, will aim to diversify their selection of IT services companies to avoid the potential adverse negative effects (such as higher prices and potential reputational risk) typically associated with strong market positions. In addition, depending on how a relevant market is defined by the competition authorities in the jurisdictions in which the Group operates, the Group may be found to have a leading competitive position, which could restrict the ability of the Group to make additional expansion efforts, including through acquisitions. If the Group were deemed to have a “dominant position” as defined by applicable competition law in any given market, certain of its business practices may need to be altered or modified in order to comply with applicable regulations, and there can be no assurances that the relevant competition authority will not take action against the Group, or that the Group will successfully implement or carry out any required alterations or modifications to its business practices. An enforcement action by such competition authorities could have a material adverse effect on the Group’s business, financial condition and results of operations. 26. If the Group were unable to bill for its services or collect its receivables, its results of operations and cash flows could be materially adversely affected The Group’s business depends on its ability to successfully and on a timely basis obtain payment from its customers of the amounts they owe to the Group for work performed. Payment terms vary among customers and between Private and Public sector. In recent years, Private sector customers have increasingly extended their payment terms leading, in certain cases, to delayed recoveries by the Group for amounts due. The nature of the Group’s contracts sometimes requires it to commit resources to a project prior to receiving advances, progress or other payments from customers in amounts sufficient to cover expenditures on the project as they are incurred. In 2017, the Group’s days of sales outstanding were 114 (2016: 105; 2015: 87). Delays in customer payments may subject the Group to working capital shortages. If a customer defaults in making payments on a project to which the Group has devoted significant resources or if a project in which it has invested significant resources is delayed, cancelled or does not proceed to completion without the Group being reimbursed accordingly, it could have a material adverse effect on the Group’s revenue and profitability. The Group generally evaluates the financial condition of its new customers and usually bills and seeks to collect on relatively short cycles. The Group might not accurately assess the creditworthiness of its customers or its creditworthiness assessment may become outdated. Macroeconomic conditions could also result in financial difficulties for the Group’s customers, including bankruptcy and insolvency. This could cause customers to delay payments, request modifications to their payment arrangements that could increase the Group’s receivables balance, or cause customers to default on their payment obligations. The Group has established provisions for losses of receivables and unbilled services. Actual losses on customer receivables could differ from those that the Group currently anticipates, and, as a result, the Group might need to adjust its provisions. Timely collection of customer receivables also depends on the Group’s ability to complete its contractual commitments and bill and collect its contracted revenue. If the Group is unable to meet contractual requirements, it might experience delays in collection of and/or be unable to collect its customer balances, and if this occurs, it could have a material adverse effect on the Group’s business, financial condition and results of operations. 27. Any disruption in data centre operations or telecommunications systems failures could harm the Group’s ability to deliver its IT services, damage its reputation or otherwise materially adversely affect its business To serve its customers, the Group must maintain continuous data centre operations, including network, storage and server operations. This includes data communications links among the Group’s data centres, its headquarters and customers’ offices, as well as back-up of data and maintenance of applications. The Group maintains two separate data centres which are located approximately 10 kilometres from its headquarters and 5 kilometres from each other. Both data centres can run independently from each other and contain most data relevant for the Group’s and customers’ businesses. The Group believes that it would be able to continue to operate if one of the two of its data centres was interrupted, damaged or destroyed. However, for some solutions, uninterrupted service to customers in case of a disaster affecting one data centre would only be provided if 73 --- customers ordered such service. Although the Group maintains redundancy facilities in data links and data centres, any significant disruption in operations and any major system failure could nonetheless compromise the Group's ability to deliver its IT services to customers according to its contracts and/or to complete projects for its customers on a timely basis. Any of these circumstances could trigger penalty and/or damages payments by the Group or result in the loss of customers or curtailed operations, which could have a material adverse effect on the Group's business, financial condition and results of operations. The Group's data centres are controlled and managed remotely, mainly from its headquarters. Access to the management system of the data centres is not limited to their physical location and access is also available via virtual private network ("VPN") connection from a Group laptop, for example for service personnel with 24/7 on-call duty from home. The team of employees responsible for the data centres do not work in an area that is physically separated from, or that requires identification or access control to be entered by, other employees. While the remote control of the Group's data centres requires several passwords and security steps to be carried out in order to gain virtual access, there is a risk that the lack of physical separation of the Group's employees may lead to internal or external human attacks on the respective hardware. See also "The Group may not be able to protect itself against cyber threats that have the potential to significantly disrupt the Group and its customers' services". Although the Group carries property and business interruption insurance, its coverage may not be adequate to compensate it for all losses that may occur. No assurance can be given that the Group will not suffer a significant operational disruption in the future, which could have a material adverse effect on the Group's business, financial condition and results of operations. ## 28. The Group's revenue visibility is subject to certain assumptions and estimates and expected revenue may not be realised in full The Group measures revenue visibility on a 12-month basis, based on two main input parameters: (1) total estimated value of committed engagements, which comprise fixed price agreements and service agreements and (2) total estimated value of planned continued engagements, which comprise ongoing time and material engagements which the Group believes have a high likelihood of conversion and/or prolongation. The Public sector segment has a high degree of revenue visibility due to multi-year fixed price tender contracts with a significant share of maintenance and operations revenue. In contrast, Private sector contracts typically have a duration of approximately 12 to 18 months and larger share of time and material engagements reflecting a fundamental difference in the purchasing pattern for Private sector segment customers compared to Public sector segment customers. Private customers tend to renew their contractual engagements with the Group and a higher proportion of revenue will therefore by definition be maintenance-based, which is also different from the dynamics in the Public sector segment. For the year ending 31 December 2018, the Group's revenue visibility on contractual committed engagements is DKK 128 million and DKK 62 million for the Public sector and the Private sector, respectively, and the revenue visibility on planned continued engagements is DKK 447 million and DKK 307 million for the Public sector and the Private sector, respectively. There is a risk that circumstances may change with respect to ongoing engagements between the Group and its customers impacting revenue attribution to planned continued engagements. The calculation of revenue visibility is subject to certain assumptions and estimates. For example, the Group's estimates may assume the achievement of milestones on a timely basis when calculating revenue visibility and missed milestones may therefore dilute the value of a contract as a consequence of liquidated damages or other liabilities, and may also delay revenue to later accounting periods. Furthermore, the Group's estimates also assume certain volumes and certain rates of prolongation under the time and material engagements, which may not materialise. For example, delays may trigger extended cancellation for convenience or cancellation for cause provisions. The Group's estimates of future revenue, and to a lesser extent, future profit margins, are to a significant degree dependent on its revenue visibility. However, revenue visibility as of any date constitutes forward-looking statements which are not guarantees of future financial performance and the Group's actual future revenue could differ materially from that expressed or implied by such forward-looking statements as a result of many factors. When the Group's contracts are terminated or not renewed, or, in the case of framework agreements, work orders are not entered into thereunder, the Group loses the expected revenue, and it may take significant time to replace the level of revenue lost and may not be able to replace the lost revenue, which may affect the Group's revenue visibility. 74 --- If any of the risks arising from the Group’s calculation of revenue visibility materialise, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 29. The Group may face difficulties in delivering complex and large projects to its customers which could result in loss of business and reputational harm The performance of a complex and large project involves many challenges, including correctly scoping the project work and understanding the customers’ needs and their operations appropriately, which depends on a number of factors, including the proficiency of the Group’s professionals and management. The Group’s failure to understand its customers’ requirements, the Group’s delay or failure to deliver IT services that meet the requirements specified by the Group’s customers, or the Group’s failure to meet certain milestones agreed for the delivery of IT services could result in termination of customer contracts, and the Group could be liable to its customers for significant penalties or damages. In certain instances, larger projects may involve multiple engagements or stages, and there is a risk that a customer may choose not to retain the Group for additional stages or may cancel or delay additional planned engagements. These terminations, cancellations or delays may result from factors that have little or nothing to do with the quality of the Group’s IT services, such as the business or financial condition of the Group’s customers or the economy generally. Such cancellations or delays make it difficult to plan for project resource requirements and inaccuracies in such resource planning and allocation may have a negative impact on the Group’s profitability. Smaller projects may have the same devastating reputational impact, since all projects are subject to the same methodology regardless of their size, and even larger projects are effectively divided into smaller bits. If the Group fails to deliver complex and large projects, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 30. Failure to maintain utilisation levels may have an adverse effect on the Group’s margins A significant percentage of the Group’s operating expenses, particularly employees and rent, are fixed in advance of any particular quarterly period. As a result, unanticipated variations in the number and timing of the Group’s projects (and the timing of payments under the Group’s contracts) or in employee wage levels and utilisation rates may cause significant variations in the Group’s operating results in any particular quarterly period, and could result in losses. Any material reduction in utilisation rates for the Group’s professional staff or variance in the on-site/offshore staffing mix that cannot be offset through lay-offs or reshuffling of employees, an unanticipated termination of a major project, a customer’s decision not to pursue a new project or proceed to succeeding stages of a current project or the completion of several major customer projects during a quarter could result in underutilisation of the Group’s employees. The Group has expanded its operations significantly in recent years through organic growth and strategic acquisitions, which has resulted in a significant increase headcount and fixed overhead costs. If the Group is not able to maintain optimal resource utilisation levels without corresponding cost reductions or price increases, the Group’s ability to sustain its margins would be adversely affected and this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 31. The Group’s future results may differ materially from what is expressed or implied by the forecast of consolidated financial information and projections of consolidated medium term financial targets included in this Offering Circular, and investors should not place undue reliance on this information The financial projections set forth in this Offering Circular, including under “Operating and Financial Review”, “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” and elsewhere, are the Group’s forecast for the financial year ending 31 December 2018 and projections of consolidated medium term financial targets for the three-year period ending 31 December 2021. The “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” includes financial forecasts and projections that qualify as profit forecasts. For profit forecasts, the Prospectus Regulation requires the Group, among other things, to disclose the principal assumptions on which the Group bases the forecast and to include a report prepared by the Group’s independent auditors on such forecasts and assumptions. The Group’s independent auditors did not make any assessment as to whether the assumptions underlying these financial forecasts and projections are well-founded or whether such financial forecasts and projections are attainable. The Group has prepared its financial forecasts and projections in accordance with the Prospectus Regulation and not in accordance with any other rules or requirements in the United States or elsewhere. These financial forecasts and projections are based upon a number of assumptions 75 --- and estimates, which are subject to significant business, operational, economic and other risks, many of which are outside of the Group's control. Accordingly, such assumptions may prove to be incorrect. In addition, unanticipated events may materially adversely affect the actual results that the Group achieves in future periods whether or not the Group's assumptions relating to the financial year ending 31 December 2018, the financial years ending 31 December 2021 or future periods otherwise prove to be correct. As a result, the Group's actual results may vary materially from these projections and investors should not place undue reliance on them. See also “Special Notice Regarding Forward-Looking Statements”. ## 32. The Group’s consolidated balance sheet includes significant amounts of goodwill and intangible assets in connection with acquisitions and faces the risk of impairment of a significant portion of these assets The Group’s consolidated balance sheet includes goodwill and intangible assets that represented 75.1% of its total assets as at 31 December 2017. These assets consist primarily of goodwill and customer intangible assets associated with the Group’s acquisitions of Mesan AS and Hunter Macdonald Ltd in 2017 as well as the Significant Shareholders’ acquisition of a majority stake in the Group in 2016. The Group also expects to acquire additional organisations in the future, which may result in its recognition of additional goodwill and intangible assets. Under current accounting standards, the Group is required to amortise certain intangible assets over the useful life of the asset, while goodwill and certain other intangible assets are not amortised. On a regular basis, the Group assesses whether there have been impairments in the carrying value of goodwill and certain intangible assets. If the carrying value of the asset is determined to be impaired, then it is written down to fair value by a charge to operating earnings. An impairment of a significant portion of goodwill or intangible assets could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 33. The Group may be unable to obtain financing or guarantee facilities at favourable terms, or at all, or perform payment obligations due to insufficient liquidity The Group may be required to raise new financing or refinance parts of or all of its outstanding debt in the future. The Group’s ability to successfully raise new financing or to refinance its existing debt is dependent on a number of factors including the conditions of the financial markets in general, the Group’s creditworthiness and credit rating, and its capacity to assume more debt at such time. As a result, the Group’s access to financing sources at a particular time may not be available on favourable terms, or at all. Disruptions and uncertainties on the capital and credit markets may also restrict access to the capital required to conduct the Group’s business. Although the Group believes that it has access to adequate financing, it cannot be ruled out that the Group may require additional financing in the future. The Group is also regularly required to source guarantees from banks, insurance companies and other institutions in connection with its contracts as described in “Operating and Financial Review—Financing Arrangements and Commitments”. The Group’s inability to raise additional financing, to refinance its debt obligations on favourable terms, or at all, or to obtain adequate guarantees could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, even if the Group currently has access to long-term financing, it cannot be ruled out that, in the future, the Group could breach its restrictive covenants or other obligations in its credit agreements, which may result from a number of factors both within and outside of the Group’s control. The Group’s inability to comply with the terms of its credit agreements or other financing arrangements could result in its finance providers requiring immediate repayment of all or a portion of the Group’s outstanding debt, which could render the Group insolvent. This in turn could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 34. The Group’s degree of leverage and ability to incur additional indebtedness could have a material adverse effect on its ability to obtain additional financing or make it more vulnerable in the event of a downturn in business or the economy generally The Group has incurred, and may in the future incur, significant amounts of debt. As of 31 March 2018, the Group had Net Interest-Bearing Debt of DKK 1,167.3 million (presented net of capitalised arrangement fees). As of 31 March 2018, and after giving effect to the offering of the Offer Shares by the Company and the application of the net proceeds to the Company from the offering of the Offer Shares, the Group would have had Net Interest-Bearing Debt of DKK 1,167.3 million, comprised of non-current financial indebtedness of DKK 1,167.3 million as set out in “Capitalisation and Indebtedness”. The Group’s organisational documents limit the amount of indebtedness it may incur and provide that Net Interest-Bearing Debt shall at no time be above 3.5 times Adjusted EBITA, with the exemption that the Company’s board of directors (the “Board of Directors”) may waive this threshold for a period of no more than 18 months in connection with a contemplated merger or acquisition. The Group is required to yield a solvency rate of at least 30% observing the aforementioned option of the Board of Directors. 76 --- There are covenants in the Group’s New Facilities Agreement that require the Group to maintain a leverage ratio (calculated as net debt divided by Adjusted EBITA) below 3.50 times, which limits the Group’s ability to incur indebtedness above a certain level. The Group’s degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. The Group may now or in the future have a greater degree of leverage than its regional or international peers, or both. The Group’s degree of leverage could also make it more vulnerable to a downturn in business or the economy generally. The Group could default on its debt service obligations, or, if it becomes more leveraged in the future, the resulting increase in debt service requirements could cause it to default on its obligations, any of which could have a material adverse effect on the Group’s business, financial condition and results of operations. Moreover, any changes that increase the Group’s leverage could be viewed negatively by investors and cause a decline in the price of the Shares. 35. The Group’s New Facilities contain, and its future debt arrangements could contain, covenants that limit the Group’s liquidity and flexibility in obtaining additional financing, in pursuing business acquisitions or other corporate activities or its ability to declare dividends to its shareholders The Group’s New Facilities Agreement contains, and any future borrowing arrangements may contain, covenants and event of default clauses, including cross default provisions, restrictive covenants and performance requirements, including financial covenants that require the Group to maintain a certain leverage ratio, and change of control provisions, which could affect its operational and financial flexibility. The satisfaction of these restrictive covenants and performance requirements could be affected by factors outside of the Group’s control, such as a slowdown in economic activity which could result in a reduction in its operating revenue or profitability. Such restrictions could affect, and in many respects limit or prohibit, among other things, the Group’s ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could further limit the Group’s ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. For a description of the restrictions and principal covenants applicable to the Group’s New Facilities, see “Operating and Financial Review—Financing Arrangements and Commitments—Description of the New Facilities”. There is no assurance that such restrictions will not materially adversely affect the Group’s ability to finance its future operations or capital needs. The Group is also subject to the risk that counterparties to any of the Group’s undrawn credit facilities will not, and/or will become unable to, perform on their obligations. If any of the Group’s counterparties were to default on their obligations under such financial agreements, it could have a material adverse effect on the Group’s business, financial condition and results of operations. 36. The Group depends on protecting its proprietary technology and intellectual property rights, and protective measures may prove costly, time consuming and may not be resolved in the Group’s favour To protect its intellectual property rights and to maintain its competitive advantage, the Group may file suits against parties that it believes are infringing its intellectual property. Any infringement or misuse of the Group’s intellectual property could result in increased costs, loss of operating revenue and damage to its reputation and brand. In addition, intellectual property litigation is expensive and time consuming, could divert management’s attention from the Group’s business and could have a material adverse effect on the Group’s business, financial condition and results of operations. Furthermore, the Group’s intellectual property enforcement efforts may not be successful. In some situations, the Group may have to bring intellectual property suits outside of Denmark or the other countries in which it operates, in which case the Group would be subject to additional risk as to the result of the proceedings, the amount of damages that it could be awarded and/or collect, as well as potential currency risk. Certain jurisdictions may not provide protection for intellectual property comparable to that in the Nordic region, Western Europe or the United States. Infringement of the Group’s intellectual property and engagement in intellectual property enforcement actions could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, the Group has granted some of its trade union customers, as well as ATP and KOMBIT, certain intellectual property rights comprising the full use rights, and in some cases access to the source code, for the Modulus platform, permitting such customers to continue using the Modulus platform and its source code if their agreement with the Group is terminated. The Group does not own any intellectual property rights with respect to the word “Netcompany”, whether as a brand or trademark. There can be no assurance that the Group will continue being able to use “Netcompany” as the legal name of entities within the Group or for marketing purposes, or that third parties will not start using the 77 --- name for their entities, services or solutions. In particular, there may be certain jurisdictions in which the Group would not be able to operate its business under the name "Netcompany" due to the generic nature of the word. Not being able to operate its business using the name "Netcompany" could have a material adverse effect on the Group's business, financial condition and results of operations. ## 37. The Group may be the subject of litigation, which, if adversely determined, could harm its business, reputation, results of operations, financial condition and prospects The Group may be subject to claims, lawsuits (including class actions and individual lawsuits), government investigations and other proceedings involving intellectual property, data protection, labour and employment, competition, securities, tax, marketing, commercial disputes and other matters. Many of the Group's contracts contain penalty clauses for its failure to timely deliver or meet agreed service levels. Therefore, the Group may face claims as a result of a breach of contract resulting from, for example, failure to deliver (including on time), material defects or negligence in the delivery of a service or solution. An unfavourable outcome on any litigation or arbitration matter could require the Group to pay substantial damages, prevent it from selling certain of its IT services, or in connection with any intellectual property infringement claims, require the Group to pay ongoing royalty payments. The Group's provisions for losses related to pending legal proceedings in the future may not be adequate to cover its ultimate costs in relation to such proceedings and may need to be adjusted as a result of subsequent developments in, or the final outcome of, such legal proceedings. Whether or not the Group will ultimately prevail in future litigation matters, litigation and arbitration are costly and can divert management's attention from the Group's business. In addition, the Group may decide to settle a litigation or arbitration matter, which could cause the Group to incur significant costs. A settlement or an unfavourable outcome on any litigation or arbitration matter could have a material adverse effect on the Group's business, financial condition and results of operations. ## 38. The Group's international operations are subject to certain risks inherent in doing business internationally As of the date of this Offering Circular, the Group operated offices in countries outside Denmark, including the United Kingdom, Norway, Poland and Vietnam. As part of the Group's growth strategy, the Group plans to continue expanding its operations outside these jurisdictions through acquisitions. The Group generally focuses its international expansion strategy on European countries with an advanced digitalisation agenda, such as Northern European countries like Sweden, Finland and the Netherlands. The Group may not be able to compete effectively in such international markets for IT services and the cost of expanding into international markets may be substantially greater than expected. If the Group fails to compete effectively in the new markets it enters, or if the cost of entering new markets is substantially greater than expected, this could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, the Group may be required to reconsider its strategy to invest in its international expansion plans. The Group's international operations increase the Group's exposure to risks inherent in operating in these countries, including supervision of local management, fluctuations in foreign exchange and inflation rates, international hostilities, terrorism, natural disasters, pandemics, infrastructure disruptions and security breaches, which could have a material adverse effect on the Group's business, financial condition and results of operations. International operations are subject to numerous, and sometimes conflicting, legal rules on matters as diverse as import/export controls, trade restrictions, tariffs, taxation, sanctions, government affairs, internal control obligations, data privacy and labour relations, including obtaining work permits for the Group's employees. Violations of these laws or regulations in the conduct of the Group's business could result in fines and/or criminal sanctions, unfavourable publicity, damage to its reputation, restrictions on its ability to process information or do business, allegations by the Group's customers that it has not performed its contractual obligations or other unintended consequences. Due to the varying degrees of development of the legal systems of the countries in which the Group operates, local laws might be insufficient to protect the Group's rights or otherwise limit or restrict its business. The Group's failure to comply with applicable legal and regulatory requirements could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, operating at a customer site could lead the Group to become subject to tax in the jurisdiction of such site. Further, the Group's business continuity and disaster recovery plans for the local systems in the jurisdictions in which the Group is active outside the Nordic region, including the UK, Poland and Vietnam, may not be effective if catastrophic events occur in any of these countries. If any of these circumstances occurs, the Group has a greater risk that the interruptions in communications with its customers and other locations and personnel, and any downtime in important processes the Group 78 --- operates for customers, could have a material adverse effect on the Group’s reputation in the marketplace and its business, financial condition and results of operations (for example, due to penalties under the Group’s contracts with its customers). 39. Some of the Group’s contracts with its customers include change of control provisions which could be triggered by the Offering or a subsequent change of control Some of the contracts entered into by the Group with its customers contain change of control clauses that possibly could be triggered by the Offering or a subsequent change of control. If such a change of control occurs, the contracting party will in some instances be entitled to terminate the contract. Although the Group has no reason to believe that any counterparty will exercise any right to terminate a contract or otherwise trigger any change of control clause due to the Offering, the risk cannot be excluded. The Group has approached certain customers with contracts containing change of control clauses and has obtained their consent to the change of control in connection with the Offering but has elected not to seek consent from all customers with change of control provisions, and there can be no assurance that all customers will give such consent. Early termination of customer contracts may increase costs, decrease the Group’s utilisation levels and reduce the revenue received by the Group, which could have a material adverse effect on the Group’s business, financial condition and results of operations. 40. The Group may lose IT audit certifications, or suffer harm from not being able to obtain new IT audit certifications in a timely manner As an IT services company, some of the Group’s customers require the Group to regularly undertake external audits and obtain the IT audit reports pursuant to International Standard on Assurance Engagements (“ISAE”) 3000 and ISAE 3402. It is possible that the Group’s customers will in the future require the Group to obtain additional IT audit certifications, such as ISO27001. The Group may not be able to obtain such IT audit reports or certifications, or in order to obtain these the Group may need to make significant changes to its operational processes, procedures and policies, which in turn may result in the Group incurring significant expenditure. The Group may also fail to obtain appropriate IT audit reports and certifications in a timely manner, as it may take up to one year, causing the Group to lose existing customers or new tenders in the meantime. Failure to obtain appropriate IT audit certifications could have a material adverse effect on the Group’s business, financial condition and results of operations. 41. The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies The Group reports its operating results in Danish kroner, but a portion of the Group’s operating revenue and expenses are denominated in currencies other than the Danish kroner, including the Norwegian kroner, the Euro, the Pound Sterling, the Polish zloty and the Vietnamese dong. The Danish kroner is currently pegged to the Euro at an exchange rate of 7.46 Danish kroner per Euro and, pursuant to a policy of the Danish Central Bank, fluctuations are allowed only within a +/-2.25% band. In the last twelve months, there has been exchange rate volatility, including in respect of certain of the currencies that are relevant to the Group’s business. The quantitative easing by the European Central Bank, which is expected to continue at least until September 2018, has had a significant effect on the Euro and, as a result of the peg, a similar effect on the Danish kroner. In addition, the Danish Central Bank could, in the future, modify or eliminate its pegging policy with respect to the Euro. Fluctuations in foreign currency exchange rates can have a number of adverse effects on the Group. See “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations—Exchange rates” for more information. Because the Group’s consolidated financial statements are presented in Danish kroner, the Group translates operating revenue and expenses, as well as assets and liabilities, into Danish kroner at exchange rates in effect during or at the end of each reporting period, as required by IFRS. However, the Group’s net currency exposure is regulated in the currency risk policy and as such any open net exposure impacting EBITA by more than a given percentage has to be hedged. The Group’s policy is to hedge its foreign currency exchange rate when the net exposure to any currency given a 10% change in the respective exchange rate against Danish kroner will result in a two percentage point impact on the Adjusted EBITA margin. Accordingly, changes in the value of the Danish kroner against other currencies will affect the Group’s reported operating revenue and expenses and the value of balance sheet items originally denominated in other 79 --- currencies. This can affect the Group's margins as its operating revenue in any one currency is not matched by expenses in the same currency. There is no guarantee that the Group's financial results will not be materially adversely affected by currency exchange rate fluctuations or that any efforts by the Group to engage in currency hedging activities will be effective. As the Group continues to develop its integrated business model, the Group expects that more of its expenses will be incurred in currencies other than those in which the Group bills for the related services. An increase in the value of any foreign currency against the Danish kroner could increase costs for delivery of services at offshore sites by increasing labour and other costs that are denominated in local currency, without any offsetting increase in the amounts payable to the Group under its contracts with customers. If these risks were to materialise, this could have a material adverse effect on the Group's business, financial condition and results of operations. ## 42. Interest rate fluctuations could materially adversely affect the Group's business, results of operations, financial condition and cash flows The Group is exposed to interest rate risk primarily in relation to its long-term borrowings bearing interest at floating interest rates entered into in connection with mergers and acquisitions and has adopted a hedging strategy in relation to such exposure. The Group evaluates the share of interest rate hedging based on an assessment of its total interest rate risk and its strategy to manage interest rate risk, in order to achieve a balance between the desired interest rate expense and interest rate risk. Such interest rate fluctuations could have a material adverse effect on the Group's business, financial condition and results of operations. As of 31 December 2017, the Group had hedged all of its long term interest rates. The Company may, following the Offering, continue to hedge all of its interest rate exposure relating to long-term indebtedness incurred in connection with mergers and acquisitions depending on the exposure such transactions may generate. The use of interest rate derivatives exposes the Group to the risk of losses on its positions, which may not always be offset by corresponding gains on the related physical position, as a result of unanticipated market changes. In addition, the Group could be exposed to market interest rate risk when the interest rate swaps that it entered into in connection with its financing arrangements expire, if the Group requires financing and cannot hedge its interest rate exposure on commercially reasonable terms, or at all. To the extent that the Group does not hedge its exposure to interest rate fluctuations, or to the extent that such hedging is inaccurate or otherwise ineffective, the Group could incur higher than expected interest rate expenses, which could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, the Group will recognise changes in fair value of its derivative positions as a result of changes to market interest rates. Any such change in fair value of derivatives could have a material adverse effect on the Group's business, financial condition and results of operations. ## Risks Relating to the Offering ## 43. Following the Offering, the Significant Shareholders and certain members of the Board of Directors, Executive Management and the Key Employee, will continue to be large shareholders and may control or otherwise influence important actions the Group takes The Significant Shareholders will upon completion of the IPO Reorganisation in connection with pricing and prior to the Admission hold 44.1% of the Shares assuming an Offer Price at the midpoint of the Offer Price Range. Upon the completion of the Offering, the Significant Shareholders will own 10,233,252 Shares, corresponding to 20.5% of the Company's share capital and voting rights, assuming full exercise of the Overallotment Option, and 13,233,252 Shares, corresponding to 26.5% of the Company's share capital and voting rights, assuming no exercise of the Overallotment Option, in each case assuming an Offer Price at the midpoint of the Offer Price Range. In addition, Carsten Gomard, a member of the Board of Directors, André Rogaczewski and Claus Jørgensen (the latter two through their joint holding company) and the Key Employee, will upon completion of the IPO Reorganisation in connection with pricing and prior to the Admission hold, respectively, 4.4%, 17.0% and 7.6% of the Shares assuming an Offer Price at the midpoint of the Offer Price Range. Upon completion of the Offering, Carsten Gomard, André Rogaczewski and Claus Jørgensen (the latter two through their joint holding company) and the Key Employee, will hold respectively 2.6%, 10.2% and 4.5% of the Shares (assuming an Offer Price at the midpoint of the Offer Price Range). Depending on general attendance at, or voting in writing prior to, the general meeting, the Significant Shareholders may hold more than 50% of the voting rights and the share capital represented at the Company's 80 --- general meeting following completion of the Offering and thereby have a controlling influence over decisions requiring a simple majority of the voting rights and the share capital represented at the general meeting, including, among other things, the election and dismissal of the members of the Board of Directors and declarations of dividends. Also, depending on general attendance at, or voting in writing prior to, the general meeting, the Significant Shareholders may also hold two-thirds or more of the voting rights and the share capital represented at the general meeting and thereby have a controlling influence over decisions requiring a two-thirds majority, including the amendment of the Company's articles of association (the "Articles of Association"), an increase or decrease of the share capital, decisions on mergers and demergers etc. For more information regarding the majority requirements at the Company's general meeting, see "Description of the Shares and Share Capital—Resolutions by the General Meetings and Amendments to the Articles of Association". Accordingly, the Significant Shareholders may be able to influence the direction of the Group's operations and other affairs through representation on the Board of Directors. This concentration of share ownership could have the effect of delaying, postponing or preventing a change of control in the Company, and impact mergers, consolidations, acquisitions or other forms of combinations, which may or may not be desired by other shareholders. No assurances can be given that the interests of the Significant Shareholders or the investors who directly or indirectly control the Significant Shareholders will not differ from the interests of other shareholders. The interests of the Significant Shareholders may not be aligned with the interests of minority shareholders with respect to such voting decisions. ## 44. There is limited free float in the Shares The Significant Shareholders' shareholding following the completion of the Offering may affect the demand in the Shares. If the Significant Shareholders continue to hold on to their Shares, this may affect the liquidity of the Shares, impair the ability of investors to sell their Shares at the times or volumes they may wish to do so and increase the volatility of the price of the Shares. In addition, the Significant Shareholders' share ownership may materially adversely affect the trading price of the Shares because investors often perceive disadvantages in owning shares in companies with a significant shareholder. ## 45. The Shares have not previously been publicly traded, and their price may be volatile and fluctuate There is currently no public market for the Shares, and an active and liquid trading market may not develop or be sustained after the Offering. If an active and liquid trading market does not develop or is not sustained, the liquidity and trading price of the Shares could be materially adversely affected and investors may have difficulty selling their Shares. The market price of the Shares may subsequently vary from the Offer Price and may be higher or lower than the price paid by investors. The trading price of the Shares may fluctuate in response to many factors, including extraneous factors beyond the Company's control, which may include, but are not limited to, the following: - results of operations that vary from the expectations of securities analysts and investors; - results of operations that vary from those of the Company's competitors; - changes in expectations as to the Company's future financial performance, including financial estimates and investment recommendations by securities analysts and investors; - technology changes or changes in customers' relationships in the Company's industry; - security breaches related to the Company's systems or those of the Company's customers or competitors; - changes in economic conditions for companies in the Company's industry; - changes in market valuations of, or earnings and other announcements by, companies in the Company's industry; - declines in the market prices of shares generally, particularly those of IT companies; - strategic actions by the Company or the Company's competitors; - announcements by the Company, the Company's competitors or the Company's alliance partners of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; - changes in general economic or market conditions or trends in the Company's industry or the economy as a whole; 81 --- - changes in business or regulatory conditions; - future sales of the Shares or other securities; - investor perceptions of the investment opportunity associated with the Shares relative to other investment alternatives; - the public’s response to press releases or other public announcements by the Company or third parties; - announcements relating to litigation or governmental investigations (including those of competition authorities); - guidance, if any, that the Company provides to the public, any changes in this guidance, or the Company’s failure to meet this guidance; - changes in accounting principles; and - events such as system failures and disruptions, natural disasters, war or acts of terrorism. In addition, Nasdaq Copenhagen or the global securities markets may experience significant price and volume fluctuations, as they have done in recent years, which may have a material adverse effect on the market price of the Shares and create a risk that investors may not be able to sell their Shares at the Offer Price or a higher price. ## 46. Future sales of Shares after the Offering may cause a decline in the market price of the Shares The market price of the Shares could decline as a result of sales by the Company, the Significant Shareholders or the Company’s other shareholders after the Offering or the perception that these sales could occur. These sales also may make it difficult for the Company to issue equity securities in the future at a time and a price that the Company deems appropriate. Following the Offering, the Company, the Selling Shareholders, certain members of the Company’s management and the MIP Participants and Employee Shareholders will be subject to certain contractual lock-up provisions, in each case for a limited period only and subject to important exceptions. After the expiry of the applicable 180-day, 360-day or three year lock-up periods, see “Plan of Distribution—Lock-up Arrangements”, the Company, the Selling Shareholders, certain members of the Executive Management and the MIP Participants and Employee Shareholders could sell their holdings of Shares in whole or in part. In addition, the Company could offer to sell new Shares in public or private transactions. Any such future sales by the Company could dilute the ownership interests of the Company’s then-existing shareholders, and sales by the Company’s existing shareholders or by the Company, or the perception that such sales could occur, could materially adversely affect the trading price of the Shares. ## 47. The issuance of additional Shares in the Company in connection with future acquisitions, any share incentive or share option plan or otherwise may dilute all other shareholdings The Company may seek to raise financing to fund future acquisitions and other growth opportunities, invest in its business, or for general corporate purposes. The Company may, for these and other purposes, such as in connection with share incentive and share option plans, issue additional equity or convertible equity securities. As a result, the Company’s existing shareholders may suffer dilution in their percentage ownership or the price of the Shares may be materially adversely affected. ## 48. The Company may not be able or may decide not to pay dividends at a level anticipated by shareholders on its Shares, which could reduce investors’ return on Shares The Company’s results of operations and financial condition are entirely dependent on the trading performance of the members of the Group. The Company’s ability to pay dividends will depend, among other things, on its financial performance, any restrictions relating to regulatory capital in subsidiaries and the availability of distributable profits and reserves and cash available for this purpose, and such other factors as the Board of Directors may deem relevant as well as other legal and regulatory requirements. As a holding company, the Company’s ability to pay dividends in the future is affected by a number of factors, principally the Company’s ability to receive sufficient dividends from its subsidiaries. The payment of dividends by subsidiaries is, in turn, subject to restrictions, including the existence of sufficient distributable reserves and cash in those subsidiaries as well as certain restrictions in the Company’s debt financing arrangements. These restrictions could limit or prohibit the payment of dividends to the Company by its subsidiaries, which could restrict the Company’s ability to pay dividends to shareholders. The Board of Directors has adopted a dividend policy pursuant to which it intends to use its available financial resources and free cash flow to service the Group’s debt and invest in continued future growth and 82 --- therefore does not expect to pay out dividends in 2018 or 2019, see “Dividends and Dividend Policy”. Consequently, there can be no guarantee that the Group’s revenue, profit and cash flow may support the payment of dividends. The payment of dividends is at the discretion of the Board of Directors and will be subject to, among other things, applicable law, regulations, restrictions, the Company’s financial position, regulatory capital requirements, working capital requirements, finance costs, general economic conditions and other factors that the Board of Directors deems significant from time to time. ## 49. Shareholders in the United States and other non-Danish jurisdictions may not be able to participate in future equity offerings The Articles of Association to be adopted upon Admission provide for preemptive rights to be granted to shareholders, unless such rights are disapplied by a shareholder resolution at a general meeting or the Shares are issued on the basis of an authorisation to the Board of Directors under which the Board of Directors may disapply the preemption rights. See “Description of the Shares and Share Capital—Authorisation to Increase the Share Capital” for a description of the authorisations to increase the share capital which have been granted to the Board of Directors. However, securities laws of certain jurisdictions may restrict the Company’s ability to allow participation by shareholders in future offerings. In particular, shareholders in the United States or in certain other jurisdictions may not be entitled to exercise these rights unless either the rights and the Shares are registered under the U.S. Securities Act, or the rights and the Shares are offered pursuant to an exemption from, or transaction not subject to, the registration requirements of the U.S. Securities Act, or equivalent local securities laws. In such cases, shareholders resident in such non-Danish jurisdictions may experience a dilution of their shareholding, possibly without such dilution being offset by any compensation received in exchange for subscription rights. The Company cannot assure prospective investors that any exemption from such overseas securities law requirements would be available to enable shareholders in the United States or certain other jurisdictions to exercise their preemption rights or, if available, that the Company will utilise any such exemption. ## 50. The Offering may be withdrawn after Admission to trading and official listing of the Shares and until settlement of the Offering As described in “The Offering—Withdrawal of the Offering”, the Underwriting Agreements (as defined herein) contains provisions entitling the Joint Global Coordinators to terminate the Offering (and the arrangements associated with it) after admission of the Shares to trading and official listing on Nasdaq Copenhagen (expected on or around 7 June 2018) and prior to settlement of the Offering by delivery and payment of the Offer Shares (expected on or around 11 June 2018). Such termination rights may only be exercised under certain circumstances, including force majeure and material changes in the financial condition of the Company’s business. Such termination rights will lapse upon settlement of the Offering, currently expected to take place on 11 June 2018, except in respect of the Option Shares. The termination rights of the parties to the Underwriting Agreements will lapse, in respect of the Option Shares, upon settlement of the sale of the Option Shares, if the Overallotment Option is exercised. Nasdaq Copenhagen’s approval of the Admission is subject to such termination rights not having been exercised after pricing and prior to settlement of the Offering (excluding any termination rights in respect of the Overallotment Option). The Underwriting Agreements contain closing conditions which the Company believes are customary for offerings such as the Offering. In addition, the Company and the Selling Shareholders have given customary representations and warranties to the Managers. The completion of the Offering is dependent on compliance with all of the closing conditions set forth in the Underwriting Agreements. If one or more closing conditions are not met, the Managers may, at their discretion, withdraw the Offering. If the Offering is terminated or withdrawn prior to settlement, the Offering and any associated arrangements will lapse, all submitted orders will be automatically cancelled, any monies received in respect of the Offering will be returned to the investors without interest (less any transaction costs) and admission to trading and official listing of the Shares on Nasdaq Copenhagen will be cancelled. Consequently, any trades in the Shares effected on or off the market before settlement of the Offering may subject investors to liability for not being able to deliver the Shares sold, and investors who have sold or acquired Shares on or off the market may incur a loss. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. 83 --- 84 # IMPORTANT NOTICE RELATING TO THE OFFERING CIRCULAR In this Offering Circular, the “Company” refers to Netcompany Group A/S registered under (CVR) no. 39 48 89 14. As of the date of this Offering Circular, the Company does not have any material assets or liabilities and does not conduct any operating activities prior to effectiveness of the IPO Reorganisation. The “Group” refers to (i) NC TopCo A/S or NC TopCo A/S together with its consolidated subsidiaries, as the context may require, for the period prior to completion of the IPO Reorganisation, which is expected to occur in connection with pricing of the Offering and no later than Admission; and (ii) Netcompany Group A/S or Netcompany Group A/S together with its consolidated subsidiaries, as the context may require, for the period thereafter. No representation or warranty, express or implied, is made by Danske Bank A/S, Deutsche Bank AG, London Branch or Morgan Stanley & Co. International plc (together, the “Joint Global Coordinators”), or Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige (the “Joint Bookrunner” and together with the Joint Global Coordinators, the “Managers”) as to the accuracy or completeness of any information contained in this Offering Circular. The information in this Offering Circular is as of the date printed on the front of the cover, unless expressly stated otherwise. The delivery of this Offering Circular at any time does not imply that there has been no change in the Group’s business or affairs since the date hereof or that the information contained herein is correct as of any time subsequent to the date hereof. In the event of any changes to the information in this Offering Circular that may affect the valuation of the Offer Shares during the period from the date of announcement to the first day of trading, such changes will be announced pursuant to the rules of the Danish Executive Order on Prospectuses, inter alia, which governs the publication of prospectus supplements. In connection with the Offering, the Company has prepared three versions of this offering document: (i) a prospectus in English for purposes of the Danish Offering (the “English Language Prospectus”); (ii) an offering circular in English for use in the international private placement outside of Denmark and the United States and Canada (the “International Offering Circular”); and (iii) an offering circular in English in connection with the private placement in the United States and Canada (the “U.S. Offering Circular” and, together with the English Language Prospectus and the International Offering Circular, the “Offering Circular”). The English Language Prospectus has been prepared in compliance with the standards and requirements of Danish law. The English Language Prospectus, the International Offering Circular and the U.S. Offering Circular are equivalent, except that (i) the English Language Prospectus includes a summary in Danish; (ii) the English Language Prospectus includes an application form for the Danish Offering; (iii) the English Language Prospectus and the International Offering Circular contain a report from the Company’s auditors with respect to the Company’s “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” that is required under the Prospectus Regulation and is not included or incorporated by reference in the U.S. Offering Circular; and (iv) the U.S. Offering Circular includes a third-party notification relating to the Company’s “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021”. In the event of any other discrepancy between the International Offering Circular and the English Language Prospectus, the English Language Prospectus shall prevail. The U.S. Offering Circular shall be the prevailing version for any private placement to qualified institutional buyers in the United States as contemplated herein. In making an investment decision, investors must rely on their own assessment of the Company and the terms of this Offering, as described in this Offering Circular, including the merits and risks involved. Any purchase of the Offer Shares should be based on the assessments of the information in the Offering Circular that the investor in question may deem necessary, including the legal basis and consequences of the Offering, and including possible tax consequences that may apply, before deciding whether or not to invest in the Offer Shares. Investors should rely only on the information contained in this Offering Circular, including the risk factors described herein. None of the Selling Shareholders, the Managers or the Company have taken any action or will take any action in any jurisdiction with the exception of Denmark that may result in a public offering of the Offer Shares. No person has been authorised to give any information or make any representation not contained in this Offering Circular and, if given or made, such information or representation must not be relied upon as having been authorised by the Selling Shareholders, the Managers or the Company. Neither the Company, the Selling Shareholders nor the Managers accept any liability for any such information or representation. --- The distribution of this Offering Circular and the offer or sale of the Offer Shares in certain jurisdictions are restricted by law. By purchasing Offer Shares, investors will be deemed to have made certain acknowledgements, representations and agreements as described in this Offering Circular. Prospective investors should be aware that they may be required to bear the financial risks of any such investment for an indefinite period of time. Persons into whose possession this Offering Circular may come are required by the Selling Shareholders, the Managers and the Company to inform themselves about and to observe such restrictions. This Offering Circular may not be used for, or in connection with, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which such offer or solicitation is not authorised or is unlawful. For further information with regard to restrictions on offers and sales of the Offer Shares and the distribution of this Offering Circular, see "Selling Restrictions". This Offering Circular does not constitute an offer to sell or a solicitation of an offer to buy any of the Offer Shares in any jurisdiction to any person to whom it would be unlawful to make such an offer. This Offering Circular may not be forwarded, reproduced or in any other way redistributed by anyone but the Managers and the Company. Investors may not reproduce or distribute this Offering Circular, in whole or in part, and investors may not disclose the content of this Offering Circular or use any information herein for any purpose other than considering the purchase of Offer Shares. Investors agree to the foregoing by accepting delivery of this Offering Circular. The Managers are acting for the Selling Shareholders and the Company and no one else in relation to the Offering and admission to trading and official listing of the Shares on Nasdaq Copenhagen. The Managers will not be responsible to anyone other than the Selling Shareholders and the Company for providing the protections afforded to clients of the Managers, or for providing advice in relation to the Offering and admission to trading and official listing of the Shares on Nasdaq Copenhagen. ## Stabilisation IN CONNECTION WITH THE OFFERING, DANSKE BANK A/S, AS THE STABILISING MANAGER, OR ITS AGENTS, ON BEHALF OF THE MANAGERS, MAY ENGAGE IN TRANSACTIONS THAT STABILISE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SHARES FOR UP TO 30 DAYS FROM THE COMMENCEMENT OF TRADING OF THE SHARES ON NASDAQ COPENHAGEN. SPECIFICALLY, THE MANAGERS MAY OVERALLOT OFFER SHARES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SHARES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. THE STABILISING MANAGER AND ITS AGENTS ARE NOT REQUIRED TO ENGAGE IN ANY OF THESE ACTIVITIES AND, AS SUCH, THERE IS NO ASSURANCE THAT THESE ACTIVITIES WILL BE UNDERTAKEN; IF UNDERTAKEN, THE STABILISING MANAGER OR ITS AGENTS MAY END ANY OF THESE ACTIVITIES AT ANY TIME AND THEY MUST BE BROUGHT TO AN END AT THE END OF THE 30-DAY PERIOD MENTIONED ABOVE. SAVE AS REQUIRED BY LAW OR REGULATION, THE STABILISING MANAGER DOES NOT INTEND TO DISCLOSE THE EXTENT OF ANY STABILISATION TRANSACTIONS UNDER THE OFFERING. SEE "PLAN OF DISTRIBUTION". 85 --- SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this Offering Circular constitute forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and the Group's anticipated or planned financial and operational performance. The words "targets", "believes", "expects", "aims", "intends", "plans", "seeks", "will", "may", "might", "anticipates", "would", "could", "should", "continues", "estimates" or similar expressions or the negatives thereof, identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements appear in a number of places in this Offering Circular, including, without limitation, under the headings "Summary", "Risk Factors", "Dividends and Dividend Policy", "Business" and "Operating and Financial Review", and include, among other things, statements addressing matters such as: - The Group's future results of operations, including in particular, any statements relating to the Group's forecast of consolidated financial information and projections of consolidated medium term financial targets; - the Group's working capital, cash flow and capital expenditure; - the Group's dividend policy; - the Group's business strategy, plans and objectives for future services, investments, operations and events; - the benefits, growth and profitability expected to be achieved from acquired companies; - the Group's revenue visibility; - the number and size of contracts announced in future tenders; - the impact of regulations on the Group and its operations; - general economic trends and trends in the Group's industry, including the expectations as to developments of digitalisation and future growth in demand for IT services; and - the competitive environment in which the Group operates. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Group's actual results, performance, achievements or industry results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: - failure of the Group's IT services or disruption in data centre operations or telecommunications systems; - the Group's ability to hire, attract, motivate, retain and train its management team, highly skilled IT professionals and consultants; - economic, political and cyber security risk; - risks of generally reduced IT expenditure levels, including changes in government policy and public spending constraints; - risks associated with the identification, acquisition or integration of other businesses or technologies; - the Group's ability to manage and sustain its own growth and change; - failure of the Group to accurately forecast volumes required for fixed fee contracts; - changes in laws and regulation in the jurisdictions in which the Group operates; - risks related to data privacy concerns and privacy regulations and requirements; - the Group's ability to keep pace with changes in technology, customer demand and market developments; - the Group's dependence on its strategic partners, vendors or service providers to provide certain services and licenses; - risks relating to intellectual property rights; - the Group's ability to deliver complex and large projects; 86 --- - the Group’s ability to maintain utilisation levels; - fluctuations in foreign currency exchange rates; and - other factors referenced in this Offering Circular. Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be incorrect, the Group’s actual financial condition, cash flows or results of operations could differ materially from what is described herein as anticipated, believed, estimated or expected. The Group urges investors to read the sections of this Offering Circular entitled “Risk Factors”, “Business”, “Operating and Financial Review” and “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” for a more complete discussion of the factors that could affect the Group’s future performance and the industry in which the Group operates. The Group does not intend, and does not assume any obligation, to update any forward-looking statements contained herein, except as may be required by law or the rules of Nasdaq Copenhagen. All subsequent written and oral forward-looking statements attributable to the Group or to persons acting on the Group’s behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Offering Circular. 87 --- 88 # ENFORCEMENT OF CIVIL LIABILITIES AND SERVICE OF PROCESS The Company is organised under the laws of Denmark, almost all of the Company's directors and executive officers reside in countries other than the United States, and a majority of the Group's assets are located outside of the United States. Also, the Selling Shareholders are organised under the laws of Denmark, Jersey, England and Sweden and all the directors and executive officers of the Selling Shareholders reside in countries other than the United States, and the assets of the Selling Shareholders are primarily located outside of the United States. As a result, it may not be possible for investors to effect service of process upon the Company, the Selling Shareholders or such directors and officers or to enforce against any of the aforementioned parties a judgement obtained in a United States court. Original actions, or actions for the enforcement of judgements of United States courts, relating to the civil liability provisions of the federal or state securities laws of the United States are not directly enforceable in Denmark, Jersey, England or in Sweden. The United States and Denmark do not have a treaty providing for reciprocal recognition and enforcement of judgements, other than arbitration awards, in civil and commercial matters. Accordingly, a final judgement for the payment of money rendered by a United States court based on civil liability will not be directly enforceable in Denmark. However, if the party in whose favour such final judgement is rendered brings a new lawsuit in a competent court in Denmark, that party may submit to the Danish court the final judgement that has been rendered in the United States. A judgement by a federal or state court in the United States against the Company will neither be recognised nor enforced by a Danish court, but such judgement may serve as evidence in a similar action in a Danish court. The United States and Jersey and the United States and England currently do not have treaties providing for reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. A final and conclusive judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon U.S. federal securities laws, would not automatically be recognized or enforceable in Jersey or in England. However, such U.S. judgment could be enforced subject to compliance with Jersey or English procedures and provided that all Jersey law or English law requirements for enforcement of foreign court awards are complied with. The United States and Sweden do not have a treaty providing for reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Accordingly, a final judgment for the payment of money rendered by a United States court based on civil liability will not be directly enforceable in Sweden. However, if the party in whose favour such final judgment is rendered brings a new lawsuit in a competent court in Sweden, that party may submit to the Swedish court the final judgment that has been rendered in the United States. A judgment by a federal or state court in the United States against us or the Selling Shareholders will neither be recognised nor enforced by a Swedish court, but such judgment may serve as evidence in a similar action in a Swedish court. --- PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION The Company was incorporated on 16 April 2018 for the purpose of acquiring NC TopCo A/S (the ultimate parent holding company of the Group prior to the effectiveness of the IPO Reorganisation) in connection with the IPO Reorganisation. The Company does not have any material assets or liabilities and will not conduct (and as of the date of this Offering Circular has not conducted) any operating activities prior to the effectiveness of the IPO Reorganisation. NC Topco A/S, in turn, became the parent holding company of the Group in connection with the Significant Shareholders' acquisition of a majority stake in the Group on 1 February 2016. See "Reorganisation" for further details and a group chart showing the Group structure before and after completion of the IPO Reorganisation. As the Company and its subsidiaries have not constituted a separate legal group for the historical periods presented, no consolidated financial statements are available with respect to the Company and its subsidiaries for the entire reporting period. For purposes of this Offering Circular, however, combined financial statements of the Group have been prepared for the reporting period covering the years ended 31 December 2017, 2016 and 2015 in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union. Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018) and Mesan AS (renamed to Netcompany Norway AS in March 2018), which were acquired during the periods under review, were consolidated into the Group's financial statements as of 25 October 2017 and 22 November 2016, respectively. As such, this Offering Circular includes the following financial information, which has been prepared in accordance with IFRS, as adopted by the European Union: - the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015 (the "Combined Financial Statements"), which have been audited by the Group's independent auditors, Deloitte, as stated in their report appearing therein; and - the unaudited condensed consolidated interim financial statements of the Group as of and for the three months ended 31 March 2018 and 2017 (the "Condensed Consolidated Interim Financial Statements"), which have been reviewed by the Group's independent auditors, Deloitte, as stated in their report appearing therein. The functional currency of each entity within the Group is translated into Danish kroner. Financial information that has previously been published for any financial year can differ from subsequently published financial information due to the retrospective implementation of changes in accounting policies and other retrospective adjustments made in accordance with IFRS, as adopted by the European Union. ## Non-IFRS Financial Measures The non-IFRS financial measures presented herein are not measures of financial performance under IFRS, as adopted by the European Union, but measures used by management to monitor the underlying performance of the Group and the Company. Further, they may not be indicative of historical operating results, nor are such measures meant to be predictive of future results. The Company has presented these non-IFRS measures in this Offering Circular because it considers them an important supplemental measure of its performance and believes that they are widely used by investors in comparing performance between companies. However, not all companies may calculate the non-IFRS financial measures in the same manner or on a consistent basis, and, as a result, the presentation thereof may not be comparable to measures used by other companies under the same or similar names. Accordingly, undue reliance should not be placed on the non-IFRS financial measures contained in this Offering Circular and they should not be considered as a substitute for revenue, EBIT, cash and cash equivalents or other financial measures computed in accordance with IFRS, as adopted by the European Union. The following financial measures included in this Offering Circular are not measures of financial performance or liquidity under IFRS, as adopted by the European Union: ## Organic revenue/organic revenue growth Organic revenue, as calculated by the Group, represents revenue from any entity that the Group has owned for the preceding 12 month period and where the revenue from that entity has been fully consolidated in the 89 --- Group's results over the full 12 month period. Organic revenue is calculated in local currencies excluding any impact from currency exchange rate fluctuations. Organic revenue growth, as calculated by the Group, represents the percentage change in the Group's organic revenue as compared to total revenue from the prior period to the current period. In order to calculate organic revenue growth (i) for the three years ended 31 December 2017, 2016 and 2015, the Group applies a constant currency adjustment based on the average exchange rates for the prior year¹ and (ii) for the three months ended 31 March 2018 and 2017, the Group applies a constant currency adjustment based on the average exchange rates for the three months ended 31 March for the prior year.² ## EBITA Earnings before interest, taxes and amortisation ("EBITA"), as calculated by the Group, represents revenue minus cost of services, sales and marketing costs, administrative costs and special items. ## EBITA margin EBITA margin, as calculated by the Group, represents EBITA divided by revenue. ## Adjusted EBITA Adjusted EBITA, as calculated by the Group, represents EBITA excluding acquisition-related costs, transaction costs and Offering-related costs, which are non-recurring in nature. ## Adjusted EBITA margin Adjusted EBITA margin, as calculated by the Group, represents Adjusted EBITA divided by revenue. ## Utilisation Utilisation, as calculated by the Group, represents the percentage of a standard working hour that a consultant spends on customer-related work, based on an average work week of 40 hours per full time employee ("FTE") in all geographies other than Norway, where the calculation is based on an average work week of 37.5 hours per FTE. ## Customer-facing FTEs and total FTEs Customer-facing FTEs, as measured by the Group, are those employees and freelancers whose role involves direct customer interaction and engagement. Total FTEs, as measured by the Group, includes all FTEs of the Group including long-term subcontractors in the UK and freelancers in Denmark and Norway. ## Revenue visibility Revenue visibility, as measured by the Group, is calculated on a 12-month basis based on two main input parameters: (1) the total estimated value of contractually committed engagements, which comprise fixed price agreements and service agreements and (2) total estimated value of planned continued engagements, which comprise ongoing time and material engagements which the Group believes have a high likelihood of conversion and/or prolongation. For a reconciliation of the non-IFRS financial measures presented in this Offering Circular to the nearest IFRS measures, please see "Operating and Financial Review—non-IFRS financial measures and other key performance indicators". ¹ Average exchange rates during the year ended 31 December 2017 were DKK 79.60 and DKK 839.02 per 100 units of NOK and GBP, respectively. Average exchange rates during the year ended 31 December 2016 were DKK 82.41 per 100 units of NOK. ² Average exchange rates during the three months ended 31 March 2018 were DKK 77.02 and DKK 841.02 per 100 units of NOK and GBP, respectively. Average exchange rates during the three months ended 31 March 2017 were DKK 82.78 per 100 units of NOK. 90 --- Constant currency basis With respect to year-on-year comparisons of certain income statement line items, the Group presents certain data on a constant currency basis, which excludes the effects of changes in currency variation from the Group’s reported results under IFRS, as adopted by the European Union. Constant exchange rates for the years ended 31 December 2017, 2016 and 2015 are determined by using the average exchange rates during 2017 and constant exchange rates for the three months ended 31 March 2018 and 2017 are determined by using the average exchange rates during the first quarter of 2018. The Group believes that this measure facilitates an understanding of the underlying economic performance of its operations. Rounding Adjustments Rounding adjustments have been made in calculating some of the financial information included in this Offering Circular. As a result, figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them. Trademarks The Group owns or has rights to certain trademarks, trade names or service marks that it uses in connection with the operation of its business. The Group asserts, to the fullest extent under applicable law, its rights to its trademarks, trade names and service marks. Each trademark, trade name or service mark of any other company appearing in this Offering Circular belongs to its holder. Solely for convenience, the trademarks, trade names and copyrights referred to in this Offering Circular are listed without the ©, ® or ™ symbols. Presentation of Compound Annual Growth Rate The compound annual growth rates (“CAGR”) presented in this Offering Circular represent the CAGR between stated dates or for a period. 91 --- FOREIGN CURRENCY PRESENTATION The Company publishes its financial information in Danish kroner. Unless the Company notes otherwise, all amounts in this Offering Circular are expressed in Danish kroner. As used herein, references to (i) "Danish kroner" or "DKK" are to the Danish kroner, the lawful currency of Denmark; (ii) "euro", "EUR" or "€" are to the euro, the lawful currency of the participating member states in the Third Stage of the European and Monetary Union of the Treaty Establishing the European Community; (iii) "U.S. dollar" or "$" are to the United States dollar, the lawful currency of the United States; (iv) "British pound sterling", "GBP" or "£" are to the British pound sterling, the lawful currency of the United Kingdom; (v) "Norwegian kroner" or "NOK" are to the Norwegian kroner, the lawful currency of Norway; (vi) "Polish zloty" or "PLN" are to the Polish zloty, the lawful currency of Poland; and (vii) "Vietnamese dong" or "VND" are to the Vietnamese dong, the lawful currency of Vietnam. ## Exchange Rates ### Exchange Rates DKK/EUR The following table sets forth, for the periods and dates indicated, the average, high, low and period-end euro buying rates expressed in Danish kroner per one euro, such data having been provided by Danmarks Nationalbank (the "Danish Central Bank"). The Danish Central Bank fixes exchange rates on the basis of information obtained from a number of central banks on a daily conference call hosted by the European Central Bank at 2:15 p.m. (CET). The average rates for each calendar year represent the average of the euro buying rates on the last business day of each month for such calendar year, and the average rates for each month represent the daily average of the euro buying rates for such month. The exchange rate of Danish kroner per euro is regulated by the exchange rate mechanism, a system originally established in 1979 for controlling exchange rates within the monetary system of the EU. Under this system, Denmark sets its central exchange rate to 7.46 Danish kroner per euro and allows fluctuations of the exchange rate within a 2.25% band. This means that the exchange rate can fluctuate from a high of DKK 7.63 per €1.00 to a low of DKK 7.29 per €1.00. If the market-determined floating exchange rate rises above or falls below the band, the Danish Central Bank must intervene. \| Calendar Year \| Reference Rates of Danish kroner per €1.00 \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Average \| High \| Low \| Period End \| \| 2015 \| 7.46 \| 7.47 \| 7.43 \| 7.46 \| \| 2016 \| 7.45 \| 7.46 \| 7.43 \| 7.43 \| \| 2017 \| 7.44 \| 7.45 \| 7.43 \| 7.44 \| \| 2018 (through 9 May 2018) \| 7.45 \| 7.45 \| 7.44 \| 7.45 \| \| Month \| \| \| \| \| \| January through March 2018 \| 7.45 \| 7.45 \| 7.44 \| 7.45 \| \| April 2018 \| 7.45 \| 7.45 \| 7.44 \| 7.45 \| \| May (through 9 May 2018) \| 7.45 \| 7.45 \| 7.45 \| 7.45 \| ### Exchange Rates DKK/NOK The following table sets forth, for the periods and dates indicated, the average, high, low and period-end Norwegian kroner buying rates expressed in Danish kroner per Norwegian kroner, such data having been provided by the Danish Central Bank. The average rates for each period represent the daily average of the NOK buying rates for such period. \| Calendar Year \| Reference Rates of Danish kroner per NOK 1.00 \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Average \| High \| Low \| Period End \| \| 2015 \| 0.83 \| 0.90 \| 0.78 \| 0.78 \| \| 2016 \| 0.80 \| 0.83 \| 0.77 \| 0.82 \| \| 2017 \| 0.80 \| 0.84 \| 0.75 \| 0.76 \| \| 2018 (through 9 May 2018) \| 0.77 \| 0.79 \| 0.76 \| 0.78 \| \| Month \| \| \| \| \| \| January through March 2018 \| 0.77 \| 0.79 \| 0.76 \| 0.77 \| \| April 2018 \| 0.77 \| 0.78 \| 0.77 \| 0.77 \| \| May (through 9 May 2018) \| 0.77 \| 0.78 \| 0.77 \| 0.78 \| --- 93 # Exchange Rates DKK/GBP The following table sets forth, for the periods and dates indicated, the average, high, low and period-end British pound sterling buying rates expressed in Danish kroner per British pound sterling, such data having been provided by the Danish Central Bank. The average rates for each period represent the daily average of the GBP buying rates for such period. \| Calendar Year \| Reference Rates of Danish kroner per GBP 1.00 \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Average \| High \| Low \| Period End \| \| 2015 \| 10.28 \| 10.72 \| 9.49 \| 10.11 \| \| 2016 \| 9.11 \| 10.19 \| 8.22 \| 8.68 \| \| 2017 \| 8.49 \| 8.92 \| 8.00 \| 8.39 \| \| 2018 (through 9 May 2018) \| 8.46 \| 8.63 \| 8.32 \| 8.52 \| \| Month \| \| \| \| \| \| January through March 2018 \| 8.43 \| 8.55 \| 8.32 \| 8.51 \| \| April 2018 \| 8.54 \| 8.63 \| 8.47 \| 8.47 \| \| May (through 9 May 2018) \| 8.47 \| 8.52 \| 8.44 \| 8.52 \| # Exchange Rates DKK/PLN The following table sets forth, for the periods and dates indicated, the average, high, low and period-end Polish zloty buying rates expressed in Danish kroner per Polish zloty, such data having been provided by the Danish Central Bank. The average rates for each period represent the daily average of the PLN buying rates for such period. \| Calendar Year \| Reference Rates of Danish kroner per PLN 1.00 \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Average \| High \| Low \| Period End \| \| 2015 \| 1.78 \| 1.88 \| 1.71 \| 1.76 \| \| 2016 \| 1.71 \| 1.76 \| 1.65 \| 1.69 \| \| 2017 \| 1.75 \| 1.78 \| 1.69 \| 1.78 \| \| 2018 (through 9 May 2018) \| 1.78 \| 1.80 \| 1.74 \| 1.75 \| \| Month \| \| \| \| \| \| January through March 2018 \| 1.78 \| 1.80 \| 1.76 \| 1.77 \| \| April 2018 \| 1.78 \| 1.79 \| 1.76 \| 1.76 \| \| May (through 9 May 2018) \| 1.75 \| 1.75 \| 1.74 \| 1.75 \| # Exchange Rates DKK/VND The following table sets forth, for the periods and dates indicated, the average, high, low and period-end Vietnamese dong buying rates expressed in Danish kroner per 1,000 Vietnamese dong, such data having been sourced from the Bloomberg Composite Rate. The average rates for each period represent the daily average of the PLN buying rates for such period. \| Calendar Year \| Reference Rates of Danish kroner per VND 1,000 \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Average \| High \| Low \| Period End \| \| 2015 \| 0.31 \| 0.33 \| 0.29 \| 0.31 \| \| 2016 \| 0.30 \| 0.32 \| 0.29 \| 0.31 \| \| 2017 \| 0.29 \| 0.31 \| 0.27 \| 0.27 \| \| 2018 (through 9 May 2018) \| 0.27 \| 0.28 \| 0.26 \| 0.28 \| \| Month \| \| \| \| \| \| January through March 2018 \| 0.27 \| 0.27 \| 0.26 \| 0.27 \| \| April 2018 \| 0.27 \| 0.27 \| 0.26 \| 0.27 \| \| May (through 9 May 2018) \| 0.27 \| 0.28 \| 0.27 \| 0.28 \| # Exchange Controls and Other Limitations Affecting Shareholders of a Danish Company There is no legislation in Denmark that restricts the export or import of capital (except for certain investments in areas in accordance with applicable resolutions adopted by the United Nations and the European Union), including, but not limited to, foreign exchange controls, or which affects the remittance of dividends, interest or other payments to non-resident holders of the Offer Shares. As a measure to prevent money laundering and financing of terrorism, persons travelling into or out of Denmark carrying amounts of money (including, but not limited to, cash, traveller's cheques and securities) worth the equivalent of €10,000 or more must declare such amounts to the Danish tax authorities when travelling into or out of Denmark. --- 94 # AVAILABLE INFORMATION Copies of the following documents may be inspected and obtained during usual business hours on any day (excluding Saturdays, Sundays and Danish public holidays) at the Company's registered office, Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark, during the period in which this Offering Circular is in effect: (i) the Company's memorandum of association and the Articles of Association; (ii) the Combined Financial Statements; (iii) the Condensed Consolidated Interim Financial Statements; (iv) the statutory financial statements of the Group's material subsidiaries, as set out in “Additional Information—Material Subsidiaries”, for the last two financial years; (v) the market study commissioned from Bain & Company Denmark ApS; and (vi) this Offering Circular. The Danish Consolidated Act no. 1089 of 14 September 2015 on limited liability companies, as amended (the "Danish Companies Act") requires the Company to make its statutory annual reports, including the audited financial statements, available to its shareholders on the Company's website three weeks before the Company's annual general meeting. At the same time, the Company is required to send the notice convening the general meeting to registered shareholders who have so requested. The English Language Prospectus is, subject to certain restrictions, together with the Articles of Association, the Combined Financial Statements and the Condensed Consolidated Interim Financial Statements, available on the Group's website. The Company has agreed that, for so long as any Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the U.S. Securities Act, the Company will, during any period in which the Company is neither subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, provide to any holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, upon the request of such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) under the U.S. Securities Act. The Company is not currently subject to the periodic reporting and other information requirements of the U.S. Exchange Act. --- 95 # MARKET AND INDUSTRY INFORMATION This Offering Circular contains statistics, data and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Group's business and markets. Unless otherwise indicated, such information is based on the Group's analysis of multiple sources, including market studies commissioned from Bain & Company Denmark ApS, Vesterbrogade 1 L, 7th floor, DK-1620 Copenhagen V, Denmark, which is based inter alia on IDC (International Data Corporation) data, and information otherwise obtained from IDC, the International Digital Economy and Society Index and the Department for Digital, Culture, Media and Sport of the United Kingdom. Such information has been accurately reproduced and as far as the Group is aware and able to ascertain, no facts have been omitted which would render the reproduced information provided inaccurate or misleading. Bain & Company Denmark ApS is a management consulting firm providing consultancy services within, inter alia, strategy, marketing, organization, operations, technology and mergers & acquisitions. Bain & Company Denmark ApS does not have any material interests in the Group. The Group understands from Bain & Company Denmark ApS that the market study includes or is otherwise based on information obtained from: (i) data providers, including IDC; (ii) industry associations; and (iii) publicly available information from other sources, such as information publicly released by the Group's competitors as well as primary interviews and field visits conducted with industry experts and participants, secondary market research and internal financial and operational information supplied by, or on behalf of, the Group. While the Group can confirm that information from external sources has been accurately reproduced, the Group has not independently verified and cannot give any assurances as to the accuracy of market data as presented in this Offering Circular that was extracted or derived from these external sources. As far as the Group is aware and able to ascertain from this information, no facts have been omitted which would render the information provided inaccurate or misleading. Industry publications or reports generally state that the information they contain has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. Market data and statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgements by the researchers and the respondents, including judgements about what types of products and transactions should be included in the relevant market. Unless otherwise indicated in this Offering Circular, any references to or statements regarding the Company's competitive position have been based on the Company's own assessment and knowledge of the market, regions and countries in which it operates. Additionally, unless otherwise indicated in this Offering Circular, any references to or statements regarding customer perception of the Company have been based on the Company's own assessment and knowledge, including customer surveys. As a result, prospective investors should be aware that statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data in this Offering Circular (and projections, assumptions and estimates based on such information) may not be reliable indicators of the Company's future performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to a high degree of uncertainty and risk due to the limitations described above and to a variety of other factors, including those described under "Risk Factors" and elsewhere in this Offering Circular. --- 96 # EXPECTED TIMETABLE OF OFFERING AND FINANCIAL CALENDAR ## Expected Timetable of Principal Events Offer Period starts ... 23 May 2018 Offer Period will not be closed in whole or in part before ... 1 June 2018 at 0:01 a.m. (CET) Offer Period expires ... 6 June 2018 at 11:00 a.m. (CET) Completion of the IPO Reorganisation ... 7 June 2018 Publication of the pricing statement containing the Offer Price ... 7 June 2018 no later than 7:30 a.m. (CET) First day of trading and official listing of the Shares on Nasdaq Copenhagen under the permanent ISIN (subject to the Offering not being terminated or withdrawn) ... 7 June 2018 at 9:00 a.m. Completion of the Offering, including settlement of the Offer Shares (excluding the Overallotment Option, unless exercised by that date) ... 11 June 2018 Announcement of completion of Offering ... 11 June 2018 ## Financial Calendar The Company’s financial year runs from 1 January through 31 December. Financial reporting will be published on a quarterly basis. The Company currently expects to publish financial reports according to the following schedule: Interim report for the six months ended 30 June 2018 ... 21 August 2018 Interim report for the nine months ended 30 September 2018 ... 6 November 2018 Annual report for the full year ending 31 December 2018 ... 6 February 2019 Annual General Meeting 2019 ... 13 March 2019 --- 97 # BACKGROUND TO THE OFFERING AND USE OF PROCEEDS After many years under private ownership, during which time the Group’s business model has been further developed and its operations have grown substantially, the Group’s shareholders and Board of Directors believe that it is now an appropriate time to broaden the Group’s shareholder base and to apply for admission to trading and official listing of its Shares on Nasdaq Copenhagen. The Offering is expected to support the Group’s operational strategy, advance the Company’s public and commercial profile, and provide improved access to public capital markets and a diversified base of new Danish and international shareholders. The Group believes that these factors will further enhance its competitive position, in relation to other IT services companies, and provide the appropriate platform for the Group’s future development. The Group will not receive any part of the proceeds from the sale of Offer Shares sold by the Selling Shareholders. For more information about the ownership in the Selling Shareholders, please see “Ownership Structure and Selling Shareholders”. --- DIVIDENDS AND DIVIDEND POLICY ## General All Shares, including the Offer Shares, have the same rights and the Offer Shares will rank pari passu with all other Shares, including in respect of eligibility to receive dividends and participate in share buybacks. ## Dividend Policy and Share Buybacks The Company currently intends to use its available financial resources and free cash flow to service the Group’s debt and invest in continued future growth and therefore does not expect to pay out dividends in 2018 or 2019. Any future decision to propose dividends and the amounts and timing thereof, will be made at the discretion of the Board of Directors and will depend on a number of factors, including future revenue, profits, financial conditions, general economic and business conditions, and future prospects and such other factors as the Board of Directors may deem relevant, as well as other legal and regulatory requirements. There can be no assurances that the Group’s performance will facilitate adherence to the dividend policy, and, in particular, the Company’s ability to pay dividends may be impaired if any of the risks described in this Offering Circular were to occur, see “Risk Factors”. Furthermore, the Company’s dividend policy is subject to change as the Board of Directors will revisit the dividend policy from time to time. There can be no assurances that in any given year a dividend will be proposed or declared. As an alternative, or in addition to, making dividend payments, the Board of Directors may initiate share buybacks. The decision by the Board of Directors to engage in share buybacks, if any, will be made in accordance with the factors applicable to dividend payments set forth above. The information on the Company’s policies relating to dividend and share buybacks constitutes forward-looking statements. Forward-looking statements are not guaranteed of future financial performance, and the Company’s actual dividends or share buybacks could differ materially from those expressed or implied by such forward-looking statements as a result of many factors, including those described under “Special Notice regarding Forward-Looking Statements” and “Risk Factors”. ## Recent Dividends The Company was established in April 2018 and has not made any dividend payments. In respect of the financial years 2016 and 2015, the Group declared and paid out dividends to its shareholders (excluding intra-group dividends) amounting to DKK 116.4 million (equal to DKK 1.62 per share in NC TopCo A/S) and DKK 100 million (equal to DKK 1.39 per share in NC TopCo A/S), respectively, in each case calculated on the basis of NC TopCo A/S’ outstanding share capital of DKK 71,734,945 divided into 71,734,945 shares of nominally DKK 1, as at the date of this Offering Circular. As at the date of this Offering Circular, the Group has not made any dividend payments (excluding intra-group dividends) in respect of the financial years 2018 and 2017. ## Legal and Regulatory Requirements ### Dividends In accordance with the Danish Companies Act, dividends, if any, are declared with respect to a financial year at the annual general meeting of shareholders in the following year at the same time as the statutory annual report which includes that the audited financial statements for that financial year are approved. Further, the Company’s general meeting may resolve to distribute interim dividends or authorise the Board of Directors to decide on the distribution of interim dividends. A resolution to distribute interim dividends within six months after the date of the balance sheet as set out in the Company’s latest adopted annual report shall be accompanied by a balance sheet from either the Company’s latest annual report or an interim balance sheet which must be reviewed by the Company’s auditors. If the decision to distribute an interim dividend is resolved more than six months after the date of the balance sheet as set out in the Company’s latest adopted annual report, an interim balance sheet must be prepared and reviewed by the Company’s auditors. The balance sheet or the interim balance sheet, as applicable, must in each case show that sufficient funds are available for distribution. 98 --- Dividends may not exceed the amount proposed or recommended by the Board of Directors. Moreover, dividends and interim dividends may only be made out of distributable reserves and may not exceed what is considered sound and adequate with regard to the Company's financial condition and such other factors as the Board of Directors may deem relevant. As of the date of this Offering Circular, the Board of Directors has been authorised to distribute interim dividends but currently has no plan to do so in the near future. Dividends paid to the Company's shareholders may be subject to withholding tax. See "Taxation" for a description of Danish withholding taxes in respect of dividends declared on the Shares and certain other Danish and U.S. federal income tax considerations relevant to the purchase or holding of Shares. ## Share buybacks In accordance with the Danish Companies Act, share buybacks, if any, may only be carried out by the Board of Directors using funds that could have been distributed as dividends at the latest annual general meeting. Any share buyback shall as a main rule be carried out in accordance with an authorisation granted by the general meeting. The authorisation shall be granted for a specific period of time which may not exceed five years. The authorisation shall specify the maximum permitted value of treasury shares as well as the minimum and maximum amount that the Company may pay as consideration for such shares. As of the date of this Offering Circular, the Board of Directors is authorised in the period until 21 May 2023 to approve the acquisition of treasury shares, on one or more occasions, with a total nominal value of up to 10% of the share capital of the Company, for so long as the Company's holding of treasury shares after such acquisition does not exceed 10% of the Company's share capital. The consideration may not deviate more than 10% from the official price quoted on Nasdaq Copenhagen at the time of the acquisition. The authorisation to acquire treasury shares cannot be exercised until the Company's annual report for the financial year ending 31 December 2018 has been approved at the Company's annual general meeting. Share buybacks will be deemed a sale of shares for Danish tax purposes and as a general rule are not subject to Danish withholding tax, provided that the Company is admitted to trading on a regulated market. See "Taxation" for a description of Danish withholding taxes and certain other Danish and U.S. federal income tax considerations relevant to the purchase or holding of Shares. ## Other Requirements Dividends, if any, will be paid in accordance with the rules of VP Securities, as in force from time to time, and will be paid to the shareholders' accounts with their account holding banks in Danish kroner to those recorded as beneficiaries. Settlement of the Offering is expected to take place within two business days after the announcement of the Offer Price and allocation, and is expected to be on 11 June 2018. Registration through the holder's account holding bank will take place as soon as practically possible thereafter. Dividends not claimed by shareholders are forfeited in favour of the Company, normally after three years, under the general rules of Danish law or statute of limitations. Under the Articles of Association and applicable Danish law, there are no dividend restrictions or special procedures for non-Danish resident holders of Shares. 99 --- # CAPITALISATION AND INDEBTEDNESS The following table sets forth the capitalisation and indebtedness of the Group as of 31 March 2018: - on an actual basis reflecting the carrying amounts on the consolidated balance sheet of the Group; and - on an adjusted basis to reflect the Refinancing and commitments under the LTIP Equity Swap arrangement. For further information on the Refinancing, please see “Operating and Financial Review—Financing Arrangements and Commitments—Description of the New Facilities”. For further information on the LTIP Equity Swap, please see “Board of Directors, Executive Management and Key Employees—Incentive Programmes—Performance-Based Programmes—Post-offering long-term incentive programme”. See “Description of the Shares and Share Capital” for information relating to the Company’s issued share capital and number of outstanding Shares. You should read this table in conjunction with the Combined Financial Statements and Condensed Consolidated Interim Financial Statements and the notes thereto included elsewhere in this Offering Circular and “Operating and Financial Review”. ## Capitalisation \| \| As of 31 March 2018 \| \| \| \| --- \| --- \| --- \| --- \| \| \| Actual \| Adjustments(2) \| As Adjusted \| \| \| DKK million \| \| \| \| Total current debt \| 12.8 \| — \| 12.8 \| \| Guaranteed \| — \| — \| — \| \| Secured(1) \| 12.8 \| — \| 12.8 \| \| Unguaranteed/Unsecured(3) \| — \| — \| — \| \| Total non-current debt \| 1,182.3 \| 106.0 \| 1,288.3 \| \| Guaranteed \| — \| — \| — \| \| Secured(1) \| 15.0 \| — \| 15.0 \| \| Unguaranteed/Unsecured \| 1,167.3 \| 106.0 \| 1,273.3 \| \| Total shareholders’ equity \| 1,702.6 \| (50.0) \| 1,652.6 \| \| Share capital \| 71.7 \| — \| 71.7 \| \| Retained earnings \| 1,652.8 \| (50.0) \| 1,602.8 \| \| Other reserves \| (21.9) \| — \| (21.9) \| \| Total capitalisation \| 2,897.7 \| 56.0 \| 2,953.7 \| (1) Secured debt represents leasing debt related to the Group’s right of use assets. See “Operating and Financial Review—Key Accounting Policies—Effect of Changes in Accounting Policies—Application of IFRS 16 “Leases””. (2) Adjustments represent financing used to settle interest and currency swaps of DKK 25 million related to the existing debt and the expensing of loan costs capitalized as part of the existing debt of DKK 31 million. Loan costs relating to the Refinancing of DKK 10 million will be capitalized and amortised over the term of the New Facilities. Additionally, adjustments reflect DKK 50 million commitment under the LTIP Equity Swap arrangement, to be settled on 15 April 2019, which will be accounted for as purchase of own shares and thereby also shown as a reduction to Retained earnings. (3) The New Facilities do not include any commitments to pay instalments the next 12 months, hence no current debt from the New Facilities is reflected in the table. The Group plans that excess cash generated from operations will be used to reduce borrowings. See “Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-year Period Ending 31 December 2021”. 100 --- # Indebtedness \| \| As of 31 March 2018 \| \| \| \| --- \| --- \| --- \| --- \| \| \| Actual \| Adjustments(1) \| As Adjusted \| \| \| DKK million \| \| \| \| Cash and cash equivalents \| 154.2 \| — \| 154.2 \| \| Undrawn committed credit facilities(2) \| 10.1 \| 60.6 \| 70.7 \| \| Liquidity \| 164.3 \| 60.6 \| 224.9 \| \| Current bank debt \| — \| — \| — \| \| Current portion of non-current debt(3) \| — \| — \| — \| \| Current financial debt \| — \| — \| — \| \| Net current financial indebtedness \| (164.3) \| (60.6) \| (224.9) \| \| Non-current borrowings \| 1,167.3 \| 106.0 \| 1,273.3 \| \| Non-current financial indebtedness \| 1,167.3 \| 106.0 \| 1,273.3 \| \| Net financial indebtedness \| 1,003.0 \| 45.4 \| 1,048.4 \| (1) Adjustments to undrawn committed credit facilities reflect increase in credit facilities of DKK 266.6 million less (i) DKK 140 million allocated to guarantees and less (ii) changes in borrowings as a result of settling currency and interest swaps related to existing debt of DKK 25 million and the expensing of capitalized loan costs related to the existing debt of DKK 31 million and less (iii) loan costs of DKK 10 million relating to obtaining the New Facilities. Additionally, adjustments to non-current borrowings reflect the commitment under the LTIP Equity Swap to be settled on 15 April 2019 relating to purchase of own shares at an amount of DKK 50 million. (2) Undrawn committed credit facilities do not include the Accordion Option to increase the commitments under the New Facilities by up to DKK 400 million. See “Operating and Financial Review—Liquidity and Capital Resources—Financing Arrangements and Commitments—Description of the New Facilities”. (3) The New Facilities do not include any commitments to pay instalments the next 12 months, hence no current debt from the New Facilities is reflected in the table. Though the Group plans that excess cash generated from operations will be used to reduce borrowings. See “Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-year Period Ending 31 December 2021”. 101 --- 102 # INDUSTRY This Offering Circular contains statistics, data and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Group's business and markets. Unless otherwise indicated, such information is based on the Group's analysis of sources as listed in "Market and Industry Information". Such information has been accurately reproduced, and, as far as the Group is aware from such information, no facts have been omitted which would render the information provided inaccurate or misleading. # The Next-Generation IT Services Market and Trends ## IT Services Focusing on Innovation and Differentiation The IT services market is undergoing a secular shift from traditional low-value added services such as infrastructure management and enterprise resource planning ("ERP") implementation towards high-value added services including digitalisation, custom application development and business process re-engineering. This shift presents opportunities for service providers focused on this large and fast growing segment as organisations across sectors embrace, adapt and respond to the new digital opportunities and efficiency potential made possible by technologies available today. Digitalisation is the current wave of IT services sweeping the market, and is facilitated by a variety of factors: - Need for agility: Organisations are increasingly facing pressure to transform their business and fight off competitive threats and adapt quickly to market changes. They no longer have the luxury of long implementation cycles with unknown outcomes as customers and competition demand shorter response times; - Availability of new technologies: Technologies such as cloud services, big data, automation, artificial intelligence, social technologies, mobile devices, and others provide the possibility of creating enhanced experiences, more efficient processes and new business models; - Need for upgrades: Most organisations still run on older legacy systems that have been upgraded and enhanced over many decades and have become fragile and expensive to run, making it difficult to be integrated with new digital offerings; and - Talent crunch: There are a limited number of companies able to provide the competency required to manage these types of projects and change the core of the IT operation which combines expert creative, strategy, business and technology skills. These factors are creating a strong tailwind for IT services companies that help their customers embrace new opportunities. However, not all areas of IT services will grow at the same pace. Traditional areas like infrastructure management and ERP implementation, for example, are likely to continue to face pressure, while demand for agile solution development is likely to outpace other segments. With digitalisation sweeping the IT services market, IT companies can be categorised according to how focused they are on providing the flexible and agile solutions to complex issues that customers are facing. A new approach to IT services, "New World IT", is focused on solutions that help customers change their businesses and use IT as a part of their strategy compared to just supporting their business. New World IT services providers utilise next-generation technologies to provide customers with innovative and flexible digitalisation projects and bespoke services for complex situations. Companies such as the Group are pure-play providers of those services and hence clearly differentiated from traditional IT companies that focus on legacy IT solutions that are primarily built to support the business, back office enabling solutions, and inflexible and slow-moving systems and IT assets. --- ![img-0.jpeg](img-0.jpeg) Figure 1. New vs. Old World within IT Services # Increased Customer Demand for Digitalised Processes that Enable Competitive Advantage Customer focus is shifting from legacy systems to next-generation systems, following the development and fast adoption of new technologies and need to integrate these systems with new digital offerings. This shift is moving project focus from enhancing or maintaining large, monolithic systems and inflexible data assets, to smaller and more flexible architecture for seamless experiences and advanced analytics. In Old World IT, spending was concentrated on supporting business activities, with projects characterised by long lead times, rigid scope of work and extended release cycles. In New World IT, attention is shifting to more agile and flexible ways of working, which deliver complex functionality faster to market. The focus is now on finding opportunities to grow and change the business, continued efficiency and making IT an integral part of a company's core strategy. This digital transformation also adds complexity, driving strong demand for highly skilled resources that can deliver swiftly and in an agile manner, while IT spend is redirected to "digital" with attention shifting away from "legacy". The figure below shows that innovative digital solutions are forecast to account for approximately $80\%$ of planned IT spend for the companies surveyed. --- ![img-1.jpeg](img-1.jpeg) Figure 2. Results of Survey on Split of Private Market IT Services Spend WHERE WILL THE NEXT DOLLAR OF INIncrementAL IT SPENDING GO TO High quality and stable solutions, on-time delivery and at-budget delivery are the key purchasing criteria for customers when selecting IT services providers. ![img-2.jpeg](img-2.jpeg) Figure 3. Key Purchasing Criteria by Priority To win in this market, IT service providers must have a good understanding of customer needs and the business implications of broader digitalisation. Furthermore, IT services providers need to have an excellent track record of delivering on time, on budget and within scope and must have an agile delivery model that is not tied to any given product or framework. The technological requirements and changing customer needs are creating a market backdrop that allows IT services companies like the Group to continue to expand and benefit from market trends. --- # Next-Generation IT Market is Segmented by the Degree of Complexity and Innovation in the Process Customers are now looking at IT services spend in a "pace layered approach" which includes the following three categories: - 'Records', which focuses on commoditisation and operational efficiency, and is characterised by an infrequent pace of change and limited customisation. It is usually found in business capabilities with a clear focus on standardisation and/or operational efficiency. - 'Differentiation', which focuses on unique processes strengthening current competitive advantage, and is typically related to business capabilities that enable unique company processes or industry-specific capabilities. Differentiation can be characterised by more frequent change and emphasis on configurability, with some degree of customisation. - 'Innovation', which focuses on next competitive advantage, around new applications built on an ad hoc basis to address emerging business requirements or opportunities. This leads to a very frequent pace of change, with a high degree of customisation. In the future, what is currently categorised as Records might become Differentiation or Innovation once legacy systems are upgraded or changed. A substantial shift of IT spend towards Differentiation and Innovation is expected by 2020, with approximately $50\%$ of total IT spend in 2020 expected to be in Differentiation and Innovation, compared to approximately $10\%$ in 2016. ![img-3.jpeg](img-3.jpeg) Figure 4. Segmentation of IT Services into Pace-Layered Approach # Descriptions # Innovation - Solutions built on ad-hoc basis - At the forefront of each new technological wave # Differentiation - Customized solutions built around existing infrastructure # Records - Commodity solutions (one size fits all) # Focus Markets and Segments The Group is focused on the market segments where it can best utilise its competitive advantage. The total addressable market for the Group is the IT services market where the Group could offer services. However, within the addressable market, the Group focuses primarily on Differentiation and Innovation, its core market. The Group also provides Records-type services but these mainly include upgrading older legacy systems to newer, more complex systems. This type of business is provided mainly in connection with offerings spanning multiple product categories, which integrate the three pace layer methods into so called cross-category offerings. The demand for agile concepts and integrated solutions within cross-category offerings is expected to grow and allows the Group to compete for a wider array of projects. Within the core market, the Group specialises on complex projects which require innovative solutions and highly-skilled development capabilities. In the public sector, the core market includes large, complex projects for the central government focused on developing IT services designed to facilitate and automate public welfare systems, and selected large --- municipalities that, post-development phase, have significant share of maintenance and operations recurring spending volume. The Group specialises in large and complex projects involving several stakeholders and technical interdependencies, and companies in need of innovative thinking for projects that are innovative or differentiated in nature and end-to-end systems integration, including systems of records. The public sector has a significant number of known tenders coming to the market and the majority of the IT spend is driven by multi-year contracts. The multi-year nature of the public sector contracts and the recurring revenue from the maintenance and operations phases of such contracts provide for revenue visibility and allow for upselling and cross-selling opportunities. In the private sector, the core market includes medium and large companies with significant annual IT spend, companies with strategic focus on using digitalisation as a competitive advantage, and "non-vanilla" projects where sophisticated IT capabilities are required. The Group specialises in highly complex and large IT projects for customers that use IT services to innovate and differentiate themselves from competition and projects that require highly-skilled development. ![img-4.jpeg](img-4.jpeg) Figure 5: Market Segment Definitions \| Definitions - Private Market \| Definitions - Public Market \| \| --- \| --- \| \| Addressable market ✓ IT service market where Netcompany offers solutions ● Excludes IT hardware and support functions \| Addressable market ✓ IT service market where Netcompany offers solutions ● Excludes dedicated IT hardware/software; Infrastructure \| \| Core market ✓ Medium and large companies with significant annual IT budget envelope ✓ Companies with strategic focus on using digitalization as a competitive advantage ✓ "Non-Vanilla" projects where sophisticated IT capabilities are required ● Excludes 70% of "systems of records" ● Excludes companies with small annual core IT Spend \| Core market ✓ Central government e.g. Ministries ✓ Select Municipalities: Only the largest municipalities Municipal purchasing organisations (✓) Regions/healthcare, potential for targeting select projects ● Small individual municipalities with little total annual spend; however for projects if large size or potential \| \| Sweetspot ✓ Highly complex and large IT projects for customers that use IT solutions to innovate and differentiate themselves from competition ✓ Projects that require highly skilled development to offer service ● Excludes less complex Records type projects \| Sweetspot ✓ Large & complex projects involving several stakeholders and technical interpendencies ✓ Need for innovative thinking (Projects of innovative or differentiated nature + end-to-end systems integration incl. systems of records) ✓ Multi-year projects (+4 year) with significant share of recurring (maintenance) revenue and potential for operations \| # The Broader European IT Services Market Digitalisation is a key focus point for the European IT services market. The market was worth approximately DKK 1,500 billion in 2016, of which approximately $72\%$ was attributable to Records, $27\%$ Differentiation and approximately $1\%$ Innovation. Differentiation and Innovation are estimated to grow at a CAGR of $10\%$ and $15\%$ , respectively, until 2020, far outpacing the growth of Records. Growth is driven by digitalisation, which is a major focus for the European Commission. The Juncker Commission has set the Digital Single Market Strategy as one of its top priorities, with the goal of enhancing the transformation and growth potential of the European Digital Economy. A ranking study, measuring the digitalisation of countries, done by the EU Commission found that the extent of digitalisation in EU countries varies to a large degree. The study measures the digitalisation of countries based on five categories: Connectivity, Human Capital, Use of Internet, Integration of Digital Technology and Digital Public Services. The study has found that the top European performing countries, Denmark, Sweden, Finland, are also the leading countries on the global stage. --- ![img-5.jpeg](img-5.jpeg) Figure 6: I-DESI (International Digital Economy and Society Index) 2015 Main Ranking of digitally advanced countries Although Denmark, Finland and Sweden are among the most digitally advanced countries, the overall EU average is still lagging behind countries such as Korea, Iceland, the US, Japan, Canada and Australia. Due to the high focus on bringing up the digital standards of all European countries to a leading level, the growth in digitalisation has, however, been more rapid than in other western countries, such as the US. # The Danish IT Services Market Denmark is a very advanced market for IT services. It is one of the most digitalised countries in the world and the most digitalised country in the European Union, ranking among the top-five countries in Europe when it comes to the digitalisation of public services (Source: Digital Economy and Society Index ("DESI"), 2017). The total Danish IT services market was worth approximately DKK 37 billion in 2016 and is expected to grow by a CAGR of between $0\%$ and $2\%$ from 2016 to 2022. Within the Danish IT services market, the addressable market was worth approximately DKK 22 billion in 2016 and is expected to grow by a CAGR of between $2\%$ and $4\%$ from 2016 to 2022 and the core market was worth approximately DKK 12 billion in 2016 and is expected to grow by a CAGR of between $8\%$ and $10\%$ from 2016 to 2022. Growth within the core market, from 2016 to 2022, is driven by Differentiation which is estimated to grow by a CAGR of approximately $8\%$ to $12\%$ , and Innovation which is estimated to grow by a CAGR of approximately $15\%$ to $20\%$ , far outpacing the growth of Records. The core market has historically consisted of approximately $50\%$ Records, but due to the forecasted rapid growth within Differentiation and Innovation, the core market is anticipated to shift more towards Differentiation and Innovation. This shift is supported by the Danish Government's "New Digital Strategy 2016-2020", which has outlined the aspiration to make Denmark a digital frontrunner. ![img-6.jpeg](img-6.jpeg) Figure 7: Danish IT-Services Core Market Forecast (DKK billion) --- 108 # Danish Public Market The core public market within Denmark was worth approximately DKK 5 billion in 2016, and is forecast to grow by a CAGR of 8% to 10% from 2016 to 2022. The core market includes the central government (e.g. Ministries), selected projects with the regions and within the local government, and the largest municipalities (including, for example, Copenhagen, Aarhus, Aalborg, and other top 10 municipalities). Within the central government, SKAT (the Danish tax authority) is the largest spender, with approximately DKK 1.9 billion of IT spend in 2016. While the Group holds a significant market share within this account, there is still room for further expansion of scope. Other central government spend amounted to approximately DKK 1.0 billion in 2016, with potential for further market share gains for the Group. The overall market has become more accessible for disruptive companies such as the Group, as EU directives have liberalised the tender process for public IT projects. The public market has also been transforming, with the incumbents (See “Business—Key Business Areas—Sectors—Public—Competitive landscape/competitors” for an overview of the incumbents) losing market share as a result of reputational damages due to poorly executed projects, while the Group has had a consistent track record of gaining market share. Local government market IT spend amounted to approximately DKK 3.7 billion in 2016 (including in the non-core market), of which approximately DKK 0.3 billion was through KOMBIT (a centralised shared municipality IT project delivery unit owned by the municipalities) and approximately DKK 0.3 billion was through Arbejdsmarkedets Tillægs pension (Danish Pension and Benefits Provider and Administrator) (“ATP”). The remaining approximately DKK 3.1 billion is from other local government, consisting of the largest municipalities, as well as smaller municipalities not part of the Group’s core market. The large and dominant market share within local government was historically held primarily by KMD. The market has become increasingly competitive following the privatisation of KMD in 2009 and the creation of KOMBIT. Through the introduction of KOMBIT, the 98 Danish municipalities have collaborated to invite a wider array of vendors into their public tender processes. As the Group has a strategic focus on the largest tenders in the public market, tenders from KOMBIT and ATP are key. In other local government IT spend, the Group only focuses on the core market of largest municipalities, a fragmented market that offers room for market share gains. Unifying the tendering process of municipalities and public re-tendering of legacy contracts, combined with the liberalisation of the central government market, has made the market large and transparent. The value of announced public core market tenders (including new tenders and re-tenders of ongoing contracts) amount to an estimated DKK 13 billion for the period from 2018 to 2022, of which the majority consists of new tenders. In addition, the share of known tenders comprises approximately 63% of expected total core market IT spend per year from 2017 to 2022. # Danish Private Market The core private market in Denmark was worth approximately DKK 7 billion in 2016, and is forecast to grow by a CAGR of 10% to 12% from 2016 to 2022. Large accounts, i.e. companies with estimated IT spend of more than DKK 10 million per year, are a compelling customer segment for the Group, as the share of Danish private companies spending more than DKK 10 million on IT services has increased from approximately 40% in 2015 to approximately 53% of total private market revenues in 2017, outpacing the growth in all customer segments with smaller annual IT spend. The business critical nature of the services offered and the high risks associated with switching vendors improve customer stickiness in this sector. Furthermore, these large accounts provide better project economics, as they are characteristically longer term and larger in scale, and provide potential for cross-selling. Large projects are excellent references to use when competing for other projects, and also provide better learning opportunities for the consultants, as they introduce exposure to a broader range of competencies and technologies. Not only is the private market attractive, but there are not many competitors that have both the scale and capabilities required to compete. Small competitors focus on niche capabilities, lacking a consolidated scope, and larger competitors are still heavily reliant on legacy technologies, lacking the capability of cross selling the more complex and innovative solutions. The Group has consistently been gaining market share as big spenders continue to digitalise their processes, this presents the Group with further potential for market share gains. # The Norwegian IT Services Market Similar to Denmark, Norway is a highly digitalised country, with a high emphasis on digital public services. Although the Norwegian society is advanced in terms of digitalisation, the IT services market is lagging behind the wave of next-generation IT disruption that is taking place in Denmark, presenting a large opportunity for the Group. --- In 2016, the total Norwegian IT services market was DKK 25 billion and within the Norwegian IT services market, the addressable market was worth approximately DKK 13 billion and the core market was worth approximately DKK 7 billion. From 2016 to 2022, Differentiation is estimated to grow by a CAGR of approximately $8\%$ to $12\%$ , and Innovation is estimated to grow by a CAGR of $15\%$ to $20\%$ , far outpacing the growth of Records. As in the Danish market, the core market has historically consisted of approximately $50\%$ Records, but due to the forecasted rapid growth within Differentiation and Innovation, the core market is anticipated to shift more towards Differentiation and Innovation. ![img-7.jpeg](img-7.jpeg) Figure 8: Norwegian Core IT-Services Market Forecast (DKK billion) # Norwegian Public Market The core public market in Norway was worth DKK 3 billion in 2016, and is forecast to grow by a CAGR of $8\%$ to $10\%$ from 2016 to 2022. The core public market includes central government (e.g. ministries) and the top-10 largest municipalities with over approximately DKK 78 million in annual IT spend (such as Oslo, Bergen, Trondheim, Stavanger, Bærum, Drammen and Fredrikstad). Growth is driven by increased spending on healthcare systems, updating state IT-systems, and de-centralised spending from municipalities on elderly care. The core public market is dominated by a few large incumbents, with the smaller challengers focused on niche and narrow offerings, providing opportunity for the Group for market share gains. # Norwegian Private Market The core private market was worth DKK 4 billion in 2016, and is forecast to grow by a CAGR of $10\%$ to $12\%$ per year from 2016 to 2022. The core private market includes medium and large companies, with growth driven by a strategic focus on digitalisation across all verticals in the private sector, and projects becoming increasingly sophisticated requiring sophisticated IT capabilities. The core private market is less consolidated than the core public market and has seen the major incumbents lose market share, allowing other IT services companies, like the Group, to gain market as the need for customised industry solutions increases. # The UK IT Services Market While the United Kingdom is less advanced in digitalisation compared to Denmark and Norway (ranking number seven among the European countries in the I-DESI study), the UK government has taken steps to increase the rate of digitalisation, for example, by publishing its UK Digital Strategy on 1 March 2017. The strategy outlines the need to develop single cross-government platform services, to use digitalisation to improve the efficiency of their public services, and to make the government itself a digital organisation. The UK IT services market is the largest in Europe. In 2016, the total UK IT services market was DKK 330 billion and the addressable market was DKK 171 billion in 2016. Within the UK IT services market, the core market was worth approximately DKK 77 billion in 2016. The core UK market is the largest of the countries in which the Group is present, and at the same time the least advanced in terms of digitalisation. --- ![img-8.jpeg](img-8.jpeg) Figure 9: UK IT-Services Core Market Forecast (DKK billion) The core UK market is forecast to grow by a CAGR of $7\%$ to $9\%$ from 2016 to 2022, in aggregate. The Group's core segments are forecast to grow at higher pace than the overall market, with Innovation expected to grow at a CAGR of $14\%$ to $20\%$ from 2016 to 2022 and Differentiation expected to grow at a CAGR of $7\%$ to $11\%$ from 2016 to 2022. Growth is expected to be driven by the UK government's vision to push user friendliness and efficiency through investments in digital solutions, the need for digital investments in key verticals, large enterprises' investments in new innovative technology and supportive IT-systems, and the rise of modularised solutions replacing traditional enterprise wide platforms and the resulting demand for product innovation and system integration. The UK public market spend consists of approximately $60\%$ spend coming from municipalities and regions and the remainder from the government. The market is fragmented, with the top-10 players holding less than half of the market share in 2016, and with opportunities to grow due to the problems some IT services providers are experiencing. Currently, the UK government has several IT services projects on track to fail and is increasingly favouring agile and nimble players, capable of delivering more Differentiation and Innovation based services. In connection with Brexit, the UK government is likely to require additional IT services as part of the shifting regulatory framework, thereby providing the Group with further opportunities for market share gains. --- 111 # BUSINESS Investors should read this section in conjunction with the more detailed information contained in this document, including the financial and other information appearing in “Risk Factors” and “Operating and Financial Review”. ## Overview The Group is a pure-play next-generation IT services company, focused on delivering business critical IT solutions to large Public and Private sector customers to lead and support them in their digital transformation journeys. These solutions are at the heart of an organisation’s core strategy or function and are thus highly significant for customers in conducting their core business. The Group has developed and institutionalised a highly differentiated business model that, for over 18 years, has proven to be repeatable and scalable and enables the Group to deliver projects on time, on budget and within scope. The uniqueness of the Group’s business model is characterised by an integrated sales and delivery approach, IT people leading IT people, a very customer transparent and deliverable-driven methodology and a highly skilled team of IT professionals, with an average age in 2017 of approximately 33 years. The Group’s business is comprised of two main segments, each of which is an operating segment for financial reporting purposes: - Public sector. Through the Group’s Public sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to central and local government, i.e. the state and large municipalities and regions. The Group’s projects in the Public sector encompass the delivery of society critical systems, including tax collection from citizens and on vehicles, payments of public benefits to citizens (e.g. pensions, cash assistance, children/family and property/housing), central registries for companies, properties, employees and public self-service portals relating to public services, including health. The Group estimates its share of the core public market in Denmark (defined as large complex projects for the central government and selected large municipalities that, post development phase, have a significant share of maintenance and operations recurring spending volume) based on total annual IT spend was approximately 6% for the year ended 31 December 2016. Public sector revenues accounted for 55.3% and 51.6% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 50.7% and 39.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. - Private sector. Through the Group’s Private sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to mid- and large-sized businesses as well as membership organisations, such as trade unions. The Group delivers business critical IT solutions covering various areas such as e-commerce, billing, document and case management, system integration, customer relationship management (“CRM”) and enterprise risk management (“ERM”), artificial intelligence and information management, very often in combination with each other. The Group estimates its share of the core private market in Denmark (defined as medium and large companies with significant annual IT budgets, companies with strategic focus on using digitalisation as a competitive advantage and complex projects where sophisticated IT capabilities are required) based on total annual IT spend was approximately 7% for the year ended 31 December 2016. Private sector revenues accounted for 44.7% and 48.4% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 49.3% and 61.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. The Group’s IT services cover development through to maintenance and operations. The Group’s development services include design, development and implementation of IT solutions driven by customer requirements in the digital transformation areas of systems modernisation, system differentiation and system innovation projects. Its maintenance and operations services include long term benefit realisation initiatives, to continuously maintain, operate and support customer IT solutions that the Group has delivered. As at 11 May, the Group had approximately 1,432 employees based in its key geographies of Denmark, Norway and the United Kingdom (excluding freelancers in Denmark and Norway) and an additional 319 employees based in Poland and Vietnam. --- The following table sets forth the Group's key performance indicators for the periods indicated: \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million, unless otherwise indicated \| \| \| \| \| \| Organic revenue (non-IFRS)(1) \| 443.2 \| 297.8 \| 1,232.0 \| 887.9 \| 758.1 \| \| Organic revenue growth (non-IFRS)(2) \| 33.1% \| 45.3% \| 37.0% \| 17.1% \| 20.5% \| \| Gross profit margin \| 38.3% \| 42.2% \| 43.3% \| 41.4% \| 41.1% \| \| EBITA (non-IFRS) \| 120.1 \| 95.7 \| 369.0 \| 212.9 \| 207.4 \| \| EBITA margin (non-IFRS) \| 23.2% \| 28.7% \| 26.1% \| 23.7% \| 27.4% \| \| Adjusted EBITA (non-IFRS)(3) \| 127.8 \| 95.7 \| 402.0 \| 248.0 \| 207.4 \| \| Adjusted EBITA margin (non-IFRS)(4) \| 24.7% \| 28.8% \| 28.4% \| 27.6% \| 27.4% \| \| Utilisation \| 88.2% \| 87.3% \| 87.6% \| 86.2% \| 87.9% \| \| Customer-facing(5) full time employees \| 1,613 \| 952 \| 1,534 \| 869 \| 631 \| \| Freelancers in Denmark and Norway(6) \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Non customer facing FTEs(7) \| 105 \| 44 \| 93 \| 40 \| 29 \| \| Total FTEs(8) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (2) Represents the percentage change in the Group's revenue as compared to the prior period, excluding changes in such revenue attributable to businesses acquired as a result of acquisitions at constant foreign exchange rates and the impact of foreign currency exchange rates on revenue. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (3) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non -IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. (4) Adjusted EBITA margin is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. (5) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. As at the period ended and rounded to the nearest whole number. (6) As at the period ended and rounded to the nearest whole number. (7) As at the period ended and rounded to the nearest whole number. (8) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. As at the period ended and rounded to the nearest whole number. # The Group's Business Model In order to deliver complex projects "on time, on budget and within scope" the founders, when the Group was formed, developed and institutionalised a scalable and repeatable business model that the Group has followed ever since. That business model (illustrated through the diagram below) is still core to the Group as the Group focuses on delivering complex business critical solutions to enable customers in their digital transformation. The Group maintains a highly disciplined approach to new customers and projects and by focusing only on strategic customers who are a good fit with the Group's delivery capabilities, the Group ensures that it is best placed to deliver its projects on time, on budget and within scope. The Group focuses on strategic customers who require such business critical IT services, including in the Public sector segment, central government, large municipalities and regions, and in the Private sector segment, mid- and large-sized businesses as well as membership organisations, such as trade unions, with significant annual IT spend relevant to the Group's IT services. The Group's business model is designed around three key pillars: (i) an outstanding talent and career development model; (ii) a differentiated management model and integrated sales approach (which is characterised as business development within in the Group) and (iii) a unique, agile, deliverable-driven methodology and toolkit. --- ![img-9.jpeg](img-9.jpeg) # The Group's Competitive Strengths The Group believes that the following key strengths will help it maintain and extend its strong position in the Danish IT services market, strengthen its position in the Norwegian and UK IT services markets and assist its entry into other Northern European countries with high levels of digitalisation. # Excellent track record in project delivery, high customer satisfaction and customer retention The Group has an excellent track record of delivering business critical IT solutions to customers on time, on budget and within scope. Digitaliseringsstyrelsen (the Danish Agency for Digitalisation) publishes semi-annual status updates for large IT projects and their respective IT service providers. From 2013 to 2017, the Group maintained a "green" track record for each of the projects it has been involved in, meaning that it has delivered each project on budget, on time (defined as including up to one month of delay) and within scope (defined as delivery of more than $95\%$ of expected project net present value). The Group's track record for delivering on time, on budget and within scope has created high customer satisfaction among the Group's customers. As at 31 December 2017, the Group had a net promoter score ("NPS") of $32\%$ in the Public sector, which was 58 percentage points above that of its competitors at $-26\%$ on average, and a NPS of $-4\%$ in the Private sector, which was 31 percentage points above that of its competitors at $-35\%$ on average. In the Private sector, the Group has a particularly strong NPS among its core focus group of large customers with a total IT spend (including IT spend outside of the Group) exceeding DKK 100 million per year, at $33\%$ as at 31 December 2017. The Group's high rate of customer satisfaction has led to high customer retention and significant repeat customer business, with more than $89\%$ of total Group revenue in Denmark coming from existing customers each year since 2015. The excellent delivery track record and high customer satisfaction is a key to the Group's high revenue visibility and growth trajectory. # Pure-play next-generation approach designed for delivering complex business critical systems Digitalisation (or industry 4.0 as it is often called) is changing business models and whole industries. The Group's customers are embarking on digital transformation journeys where old legacy IT systems, such as mainframe or enterprise resource planning ("ERP") systems, are integrated into, minimised or completely replaced by more differentiated, innovative parts of the future IT system landscape, so-called "next-generation IT". This includes aspects such as self-service, artificial intelligence, workflow automation and robotisation, modern case management and knowledge sharing, all of which are focus areas of the Group. The Group considers itself to be a "pure-play next-generation" IT company, leading and supporting its Public and Private sector customers in their digital transformation journeys. At the core of any complex, business critical project, the Group focuses on understanding its customer's operations and needs with a view to managing complexity by breaking down projects into smaller parts so that it --- can ultimately deliver a simple solution designed to digitally transform the customer's business. The Group is technology agnostic which means that its service offering is not restricted or limited to a particular technology or platform, and it can therefore use a specific technology or combination of technologies in order to develop the right solution for the customer. This allows greater flexibility in the service offering and enables more efficient execution as the Group is not tied to particular systems or providers. ## Institutionalised, repeatable and scalable business model The Group operates its own unique, institutionalised, repeatable and scalable business model designed to deliver excellence in digital transformation on time, on budget and within scope through three key pillars: - Outstanding talent and career development model. The Group's IT professionals are highly skilled, many coming from top universities with advanced IT or science related degrees. In 2017, 86% of new hires had bachelor (or higher) degrees. The Group maintains stringent hiring criteria, aiming to attract young and ambitious candidates among the top 5-10% of graduates with IT or science related degrees. As a result of the Group's success in attracting top talent from universities and large influx of graduates each year, the average age of the Group's employees in 2017 was approximately 33 years. The Group focuses on talent and career development through its accelerated merit based career development programme which rewards top performers with accelerated progression through the various career stages from Consultant to Partner. The programme ensures focus on maximising each individual employee's personal and professional growth through specially designed performance feedback, career counselling, mentoring and training at all stages in the career model. This, together with giving new graduates the opportunity to work on complex, business critical IT development projects, along with a competitive remuneration model, has earned the Group a positive reputation among graduates from top ranked Danish universities. In addition, the hands-on management approach by people who are themselves IT professionals allows for continuous feedback and learning for new consultants who are assigned to customer-facing projects from the outset of their careers alongside more experienced consultants. The Group also provides employees with a dedicated and highly specialised employee training programme through mandatory training courses delivered as part of the Netcompany Academy, which provides employees with efficient and effective training courses designed and developed around the Group's methodology and toolkit by experienced Group executives, managers and systems architects. See “—Employees—Career development programme”. - Differentiated management model and integrated sales approach. The Group's business model is centered around a decentralised management model focused on IT people leading IT people throughout all levels of the organisation. Unlike most IT services providers that maintain separate teams for sales, management and development/operations, the Group employs an integrated sales and delivery approach whereby the same individuals responsible for selling IT services to customers are also responsible for delivering such systems and solutions, maintenance and operations. The Group believes that the benefits of this approach are significant, as highly skilled and experienced IT people are best positioned to advise, formulate, detail and price realistic customer proposals, to identify and mitigate risk and also be responsible for ongoing customer communications thereby ensuring trusted quality customer relationships. In addition, the Group's risk assessment calculation, which is important when pricing, scoping and committing to new projects, is based on an operational evaluation by the Group's experienced IT professionals who assess the complexity of each new project, and can apply discipline and steer the Group to entering into contracts at the right price level and contracts which they believe the Group can successfully execute. From an overall risk perspective, the Group strongly believes that IT people are the best people to lead the delivery of IT projects as practical hands-on delivery experience, gained from participating in building IT systems, provides the project managers with a crucial understanding of IT solution complexity, project plan and risks. The Group's management model is also characterised by the staffing of projects whereby most consultants work on a day-to-day basis in small teams which can be scaled up or down based on project needs. Due to its effectiveness, the Group has not changed this approach even though the Group has experienced rapid growth. - Unique, transparent, agile, deliverable-driven methodology and toolkit. The Group's business model involves the use of an agile, transparent and deliverable-driven methodology and toolkit which the Group believes is unique. This methodology and toolkit provides a complete set of guidelines, tools and templates for planning, delivering, managing and documenting complex integrated IT solutions. It is used across all projects and throughout all stages, from development to maintenance and operations. The Group's methodology ensures that large, complex projects are broken down into smaller and more manageable work packages in order to reduce the overall project risk. The Group's deliverable driven 114 --- approach ensures that measurable progress is actively monitored and managed on each project throughout the project's lifecycle, in order to provide early indications of any potential deviations from the plan. The Group's agile methodology is supplemented with control elements from a more traditional waterfall project management approach. The Group combines the best of the two approaches, recognising the need to demonstrate quick wins and short time to market and reduces risk significantly by adopting classic built-in controls relevant to large-scale, fixed priced projects. The Group's supporting toolkit includes stringent collaboration and approval processes with customers, in order to ensure that both the Group and customers have a firm, common and completely transparent understanding of all deliverables as well as project progress. As all of the Group's employees are trained in the very same methodology across all projects and customer engagements, the Group has the ability to mobilise and change assignments on projects at short notice. ## Leader in driving digital transformation in Denmark The Group has been a leader in driving the digital transformation agenda in Denmark. Denmark is one of the most digitalised countries in the world and the most digitalised country in Europe and ranks among the top five countries when it comes to digital public services (Source: European Commission, DESI, 2017). The Group delivers state-of-the-art, user-friendly and effective administrative systems regulating major social benefits areas for all Danish citizens, such as child, housing and benefits and pensions for the elderly. The Group also runs the majority of new IT projects for the Danish tax collection centre Implementerings Center for Inddrivelse (Implementation Centre for Debt Collection) ("ICI"), in order to provide Denmark with a state-of-the-art modern tax collection system. In addition, the Group has also been chosen and is currently delivering the highly prestigious AULA education platform for knowledge sharing that is aimed at all children in kindergartens and schools across Denmark. In addition to the significant impact the Group has had in the Public sector segment, the Group has also built a B2B platform for the sale of tools and equipment for some of Denmark's largest companies in the plumbing industry and has delivered some of Denmark's most advanced marketing and sales solutions through an additional B2B platform for the sale of tools, components and equipment for some of Denmark's largest companies within the wholesale industry. The platforms help companies to optimise the supply of goods to the professional market across distribution channels. Further, the Group has delivered numerous advanced marketing and sales solutions enabling clients to deliver a tailored and personalised customer experience and thereby improve conversion rates and customer loyalty. In addition, the Group has delivered solutions to a number of utility companies optimising their efficiency and product range by introducing new and flexible billing platforms, making it easier for these companies to introduce new products, packages and subscriptions to their end-customers. As a result of these and other projects, the Group has a very visible presence in Denmark and voice in the public debate relating to the promotion of digitalisation as a main driver for creating and sustaining wealth in Danish society. ## Experienced Executive Management and Partner team with proven track record The Group's Executive Management and Partner team is comprised of individuals with strong operational experience and execution capabilities gained through extensive customer interactions during their tenure at the Group. In addition, specific experience relating to international financial reporting, corporate governance and investor relations has been added to the Group by expanding the Executive Management team through the hire in 2017 of a Group CFO with substantial experience in these particular areas. The Group's founders continue to actively manage and lead the Group's business and strategy and exemplify how the Group's approach of IT people leading IT people runs all the way up the organisation. In addition, leadership is provided by the Group's Partners, substantially all of whom started in more junior roles within the Group and have progressed and developed through the Group's accelerated merit-based career model. The Group believes that its performance culture, both driven and supported by its business model, is important to develop and preserve. ## The Group's Strategies The Group's key strengths have positioned it favourably to take advantage of the underlying continued growth in demand for digitalisation and to selectively continue its expansion in Northern Europe. As part of the Group's 2022 strategy, the Group will focus on continuing what has made it successful while also leveraging the momentum from recent contract wins through continuing to advance the digitalisation agenda, implementing its business model and performance culture in acquired companies, continuing to enhance its talent pool and continuing to expand in Northern Europe and increase market share. 115 --- 116 # Continue advancing the digitalisation agenda in both the Public and Private sectors A central pillar of the Group’s 2022 strategy is to maintain its leadership position in advancing the digitalisation agenda in both the Public and Private sectors by supporting customers in their digital transformation journeys. The Group aims to continue to increase its market share in both Denmark and the other countries in which it operates. By being at the forefront of digitalisation in the Public sector, the Group is able to play a meaningful role in preserving the social welfare system and develop IT services designed to facilitate and automate public welfare systems to promote efficiency and free up public resources so that they may be dedicated to serving the Public sector in a more meaningful manner. In order to advance the digitalisation agenda, the Group leverages its experience across sectors. For example, the Group has used its experience to deliver digital solutions to the central government within tax collection, vehicle registration, unemployment benefit and other key welfare systems which in turn has increased the efficiency of the public sector more generally. The Group expects its future growth to be organically derived from increasing sales to existing customers as well as from sales to new customers. In Denmark, Norway and the UK, there are large core markets (defined as the core public and private markets) that provide the Group with the opportunity to continue to increase its market share. Being a pure-play next-generation IT services company, the Group mainly focuses on the parts of the market relating to systems of differentiation and innovation which together are expected to grow at twice the rate of records in terms of total core market over the next several years in all three of the geographies in which the Group has a significant presence. See “Industry—The Next-Generation IT Services Market and Trends” for further details. # Implementation of business model and performance culture in acquired companies Implementing the Group’s unique business model and performance culture in the companies that the Group has acquired and may in the future acquire is a key priority for the Group as part of its 2022 strategy. The Group believes that its business model and performance culture set it apart from other IT service providers and are critical to its success. By ensuring that the business model and performance culture are effectively implemented in new markets and by newly acquired companies, the Group believes it will be able to grow its margins in the future as the acquired companies gradually shift their delivery and business model towards the Group’s and enhance their ability to deliver their IT services on time, on budget and within scope. The Group intends to continue to pursue selective acquisitions of targets that are agile companies with a strong talent pool, which it can then grow organically. See “—Continue to expand in Northern Europe and increase market share” below. # Continued enhancement of the talent pool The Group’s IT professionals are critical to the success of its business and the Group’s ability to grow and continue to capitalise on its key strengths will depend on the Group’s ability to continue to attract, retain and develop ambitious young, talented and highly skilled individuals. The Group expects to continue to capitalise on its strong employer brand and reputation in recruiting top graduates from top universities in order to continue to refresh its consultant pool. Continued development of such professionals through the Group’s career development programme based on an accelerated merit-based approach and competitive remuneration models for top performers is a key component of the Group’s strategy. While a strong talent pool is one of the Group’s key criteria for selecting acquisition targets, a key priority for the Group is to ensure that IT professionals coming from such acquisitions are able to assimilate into the Group’s performance culture. As a means to ensure rapid implementation of its business model and performance culture within the recently acquired Hunter Macdonald Ltd business and, in particular, the development of Group operations in Vietnam, the Group has sent senior managers to Vietnam to work alongside employees based in Vietnam. Such presence of senior personnel helps to reinforce the philosophy of IT people leading IT people, ensuring that the Group’s methodology and toolkit are being used in a consistent manner and that the review process for employees is done by senior people who are familiar with the relevant performance measures and targets, and are on the ground to help local employees learn and succeed. The Group also plans to establish a larger UK office in the London area and has begun the recruitment of developers using the approach institutionalised in the Group’s business model and executed by the Group’s human resources function. # Continue to expand in Northern Europe and increase market share The Group intends to pursue selective acquisitions in markets that have an advanced digitalisation agenda, including Northern European countries such as Sweden and Finland as well as the Netherlands. Through its --- acquisitions of Mesan AS and Hunter Macdonald Ltd, the Group has recently entered into the Norwegian and UK markets. As a result, the Group does not expect to make further acquisitions in those particular markets, instead focusing on organically growing its presence in these markets in the future. In pursuing acquisition opportunities, in addition to focusing on markets with high digitalisation agendas, the Group intends to focus on ensuring that potential targets have access to the types of strategic customers that the Group targets and that such acquisition targets are agile companies with a strong talent pool. The Group believes that selecting companies on the basis of these criteria facilitates for easier integration and the profitable growth of the business. While looking at new growth opportunities through selective acquisitions is a key focus area of the Group, the Group's Executive Management and Partners will not enter into transactions that they view as incompatible with the Group's unique business model and merit-based performance culture and will generally focus on acquisition targets of a size and nature broadly similar to Mesan AS and Hunter Macdonald Ltd. The Group's Executive Management and Partners are disciplined and dedicated in integrating acquired companies both operationally and culturally in order to facilitate the profitable growth of the business. Generally, the Group believes that full integration of an acquired company from its current state of performance to that of the Group, in terms of being able to match the Group's growth and profitability metrics, takes between three and five years. During that period, the Group gradually transforms and expands the type of services offered by the acquired company as well as its business model to align them with the Group. The integration of Mesan AS in Norway has been ongoing since its acquisition by the Group in November 2016 and was completed, from an organisational, infrastructure and systems perspective, in December 2017. The full benefit potential from this acquisition is expected to be realised by the Group during the next couple of years through expansion and gradual transformation of the Group's customers and services in the Norwegian market. In relation to the integration of Hunter Macdonald Ltd which the Group acquired in October 2017, the Group expects that revenue development and margin expansion in the United Kingdom will be in line with what it has experienced in Norway following the Mesan AS acquisition. However, the Group expects that it will likely take a longer time and require more resources, before Hunter Macdonald Ltd is fully integrated with the Group and can begin to realise the full benefits of the acquisition, due primarily to the current structure of the UK operations with a relatively higher proportion of independent subcontractors delivering development work. ## History and Development The Group was established 18 years ago. André Rogaczewski, Carsten Gomard and Claus Jørgensen have since the foundation of the Group as it is known today, focused on delivering complex business critical IT services through the use of modern technologies, with a heavy focus on strong and timely delivery to its customers. Initially, the Group mainly delivered single point systems such as self-service portals, CRM, e-commerce and collaborative case management systems, and was primarily focused on the Danish market. In 2005, the Group opened its office in Warsaw, Poland, as a sourcing centre, and also started offering maintenance services. In 2006, the Danish private equity firm Axcel became a majority shareholder with a 60% ownership stake alongside the three founders and a number of other key employees. In 2011, Axcel sold its 60% ownership interest in the Group to the founders and other key employees. In 2012, the Group acquired Tieto Enator Danmark, the original developer of the Modulus platform, used widely by Danish labour unions and unemployment funds to manage unemployment payments. In 2013, the Group established a Public sector vertical focusing on building up a high market share in delivering complex public IT systems. At the same time, the Group extended its service offering to include 24/7 IT service management and operations. In February 2016, the Norwegian private equity fund FSN Capital Partners acquired, through the Significant Shareholders, a controlling stake in the Group. Under FSN ownership, the Group has expanded outside of Denmark. With the acquisition of Mesan AS in November 2016, the Group entered the Norwegian market. Most recently, in October 2017, the Group acquired the UK-based group Hunter Macdonald Ltd as an entry platform to the UK market, and to add modern IT infrastructure and cyber security consulting services, as well as a sourcing platform in Vietnam. 117 --- # Key Business Areas # Sectors The following table sets forth a breakdown of revenue, organic revenue and Adjusted EBITA on a segment level as a percentage of overall Group revenue, organic revenue and Adjusted EBITA for the three months ended 31 March 2018 and 2017 and the years ended 31 December 2017, 2016 and 2015. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| (%) Public sector \| \| \| \| \| \| Revenue \| 55.3 \| 45.8 \| 51.6 \| 40.9 \| 41.1 \| \| Organic revenue (non-IFRS)(1) \| 62.2 \| 47.4 \| 52.7 \| 41.2 \| 41.1 \| \| Adjusted EBITA (non-IFRS)(2) \| 50.7 \| 34.3 \| 39.0 \| 32.7 \| 38.9 \| \| Private sector \| \| \| \| \| \| \| Revenue \| 44.7 \| 54.2 \| 48.4 \| 59.1 \| 58.9 \| \| Organic revenue (non-IFRS)(1) \| 37.8 \| 52.6 \| 47.3 \| 58.8 \| 58.9 \| \| Adjusted EBITA (non-IFRS)(2) \| 49.3 \| 65.7 \| 61.0 \| 67.3 \| 61.1 \| (1) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (2) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. The following table sets forth a breakdown of revenue, organic revenue and Adjusted EBITA on a geographic basis as a percentage of overall Group revenue, organic revenue and Adjusted EBITA for the three months ended 31 March 2018 and 2017 and the years ended 31 December 2017, 2016 and 2015. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| (%) Denmark(1) \| \| \| \| \| \| Revenue \| 76.8 \| 89.5 \| 86.2 \| 98.7 \| 100.0 \| \| Organic revenue (non-IFRS)(2) \| 89.7 \| 100.0 \| 99.1 \| 100.0 \| 100.0 \| \| Adjusted EBITA (non-IFRS)(3) \| 87.3 \| 91.9 \| 89.2 \| 99.2 \| 100.0 \| \| Norway \| \| \| \| \| \| \| Revenue \| 8.2 \| 10.5 \| 9.5 \| 1.3 \| — \| \| Organic revenue (non-IFRS)(2) \| 10.3 \| — \| 0.9 \| — \| — \| \| Adjusted EBITA (non-IFRS)(3) \| 7.4 \| 8.1 \| 7.7 \| 0.8 \| — \| \| United Kingdom(4) \| \| \| \| \| \| \| Revenue \| 14.9 \| — \| 4.3 \| — \| — \| \| Organic revenue (non-IFRS)(2) \| — \| — \| — \| — \| — \| \| Adjusted EBITA (non-IFRS)(3) \| 5.3 \| — \| 3.1 \| — \| — \| (1) Includes the revenue, organic revenue and Adjusted EBITA from the Group's Danish projects, including revenue generated from the Group's sourcing center in Poland. (2) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (3) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. (4) Includes the revenue, organic revenue and Adjusted EBITA from the Group's UK projects, including revenue generated from the Group's sourcing center in Vietnam. # Public # Overview In the Public sector segment, the Group provides IT services from development to maintenance and operations to both the central government and to local governments consisting of large municipalities and regions. See “—Categories of Services and Solutions” below for further detail on the Group’s IT services. In the --- Danish IT market, IT deliveries to central governments are made directly to the relevant purchasing entities, whereas deliveries to local governments are either made directly to one or more of the 98 municipalities or to KOMBIT. KOMBIT supports local authorities creating and maintaining systems used by all municipalities. In 2015, some IT solutions services relating to social benefits were moved to Udbetaling Danmark (the Danish authority responsible for the collection, disbursement and control of a number of public benefits), which is operated by ATP. The Group has strong relationships with both KOMBIT and ATP, through its involvement in the IT systems used to administer family and housing benefits, social welfare and public pension payments, as well as the maintenance of registries for properties and street addresses, among others. Similarly, the Group provides key IT services to major Danish central government ministries and authorities, such as Skatteministeriet (Danish Ministry of Taxation) ("Skatteministeriet"), Erhvervsstyrelsen (Danish Business Authority) and Arbejdstilsynet (Danish Working Environment Authority) ("Arbejdstilsynet"), Finansministeriet (Danish Ministry of Finance), Justitsministeriet (Danish Justice Department), and Udlændingestyrelsen (Danish Immigration Service). While the Group's customers continue to focus on cost effectiveness generally, the tender process in the Public sector segment has evolved over the last five years, with increased weight being given to the bidding IT service provider's quality of service and execution track record when awarding tenders and less focus on quoted price as the main determinant. The Group also provides IT services from development to maintenance and operations in Norway to Skatteetaten (Norwegian Tax Authority) and Oslo Kommune (Oslo Municipality) and in the United Kingdom to the armed forces, as a subcontractor for Capita, an international business process outsourcing and professional services company, as well as to the Home Office and to the Ministry of Justice, as a subcontractor for Sodexo. ## Public sector segment case study—Skatteministeriet In August 2016, the Group won a contract to develop a new system for ICI, a specially created division within Skatteministeriet, for the collection of all debt, including tax, utility and television license liabilities and fines, owed by Danish citizens to the government. The new system is designed to replace the previous system, Et Fælles Indrivelsessystem ("EFI"), which had never been successfully put into full production resulting in a significant amount of outstanding citizen debt being owed to the Danish state. Utilising a team of over 100 consultants initially on the project and by taking an agile, flexible and iterative approach, the Group rapidly developed and delivered a new debt collection system with the successful first release of the project in April 2017. A further two releases of the debt collection system are scheduled for delivery by the Group in the first quarter of 2018 and the third quarter of 2018, at which point the Group will have replaced EFI. First debt re-payments have already successfully been made under the new debt collection system. ## Contractual framework The Public sector has a high degree of visibility from already announced tenders and is typically driven by multi-year fixed price contracts for the delivery of complex solutions, with a significant share of maintenance and operations revenue. The multi-year nature of contracts in the Public sector makes it an attractive sector for the Group. On average, most large public tender contracts have a duration of approximately five to seven years. The first 12 to 18 months are typically the development phase, which is usually followed by 48 to 72 months of maintenance and operations services. Typically the revenue derived from maintenance and operations services will be approximately 2.5 times the revenue derived in the development phase. Re-tenders of maintenance and operations contracts will typically have higher win-rates compared to the original tenders due to the existing knowledge of the current contract holder, having actually developed the underlying system. While contract structures differ between customers, in 2017 the Group had an approximately even split between fixed price and time and material contracts based on number of contracts and a 71% to 29% split between fixed price and time and material contracts based on revenue in the Public sector segment. Frequently, the Group's Public sector contracts are initially fixed price for the development of the project/IT service and then switch to time and material for the operations and maintenance services of the project/IT service. While the contract structure mix between development and maintenance fluctuates from year to year, the Group believes it will converge over the longer term towards an overweighting of maintenance contracts given the increase in development projects and, as a result, it is anticipated that the Group's share of time and material contracts will increase. 119 --- The Group takes a different approach when selling to customers in the Public sector segment than it uses when selling to customers in the Private sector segment due to the high frequency of tenders and strict regulations around EU tender processes. The EU tender process demands a higher level of investment into the sales process for both the potential project/IT service provider and customer. Tenders delivered in the Public sector segment need to follow rigid formalities and every aspect of the tender has to be formally documented in writing. This often requires the Group to prepare detailed tender offer documents that are responsive to customer criteria and specification requirements in order to be awarded a tender. This complex and time consuming tender process has traditionally favoured the Group's larger and more established competitors, as many of the Group's competitors in the Public sector segment have specialised tender departments, tender managers and organisational units who specifically handle the complex EU tender process. The Group approaches tenders differently than most of its competitors, as it uses integrated sales and delivery teams to prepare the tenders. IT professionals who will be involved in the actual delivery of a project will analyse, scope, describe, estimate and document the tender. This way multiple individual employees with deep skills and knowledge of particular facets of a project or of a particular customer's needs assist in the preparation of certain aspects of the tender, which are then reviewed by more senior employees with greater experience in project planning and delivery. These more senior employees are specially selected to manage and review specific project tenders. While this approach to tenders requires a high-level of discipline and alignment from all of the Group's various employees who are involved in the process, it reflects the Group's interaction with its potential customers and the Group believes that its approach leads to more accurate quotes, considerably reduced risk profile and is generally more efficient in terms of employee hours spent on the preparation and review of tenders than under the approach generally adopted by the Group's competitors, who frequently have dedicated sales teams, who are not involved in the subsequent development and delivery phases. The Group believes this to be a key differentiator that is hard to replicate, as it requires a broader culture of IT people leading IT people. The Group's win rate in Danish public tenders (including new tenders and re-tenders of ongoing contracts) in which it participated was 44%, 72% and 87% calculated as total value of contracts won as a percentage of total maximum potential value of contracts tendered for, in each of the year's ended 31 December 2015, 2016 and 2017, respectively. The total potential value of contracts in which the Group participated in the applicable tender processes was DKK 1.9 billion, DKK 2.1 billion and DKK 3.5 billion in 2015, 2016 and 2017, respectively (Source: EU Tender Database (Tenders Electronic Daily) and Group data). In addition to focusing on winning new tenders, the Group focuses on re-tenders in order to retain existing customers. During 2017, the Group won all re-tenders on which it had the current contract, including re-tenders with Arbejdstilsynet (Danish Working Environment Authority), Motorregistret (Register of Motor Vehicles) (within the Danish Customs and Tax Administration), ("FLIS") (Danish municipalities information management system) and Styrelsen for IT og Læring (National Agency for IT and Learning) ("STIL"). In Norway, the Group has also had recent success in the public sector, including winning tenders such as Oslo Kommune (Oslo Municipality) and Skatteetaten (the Norwegian Tax Administration), where Netcompany Norway AS, even though it had only been part of the Group for six months, managed to secure a place on the large framework agreement as one of five companies engaged on all six subcontracts Netcompany Norway AS bid on. This was accomplished by utilising the Group brand, references and capacity, as well as the approach of its unique business model to integrated sales and delivery. ## Competitive landscape/competitors The Group's competitors in the Danish Public sector segment comprise: (1) large incumbents with established relationships, comprising large international companies, such as DXC Technology (formerly CSC) and IBM, and national companies, such as KMD (that evolved from the early centralised development of municipality solutions) and CGI which each hold between 15% and 40% of total Public sector segment market share, (2) adapting incumbents and agile at-scale companies, comprising regional companies with the scale and scope to compete with the incumbents on large-scale projects, such as Visma, EG and Systematic, which each hold between 3% and 10% of total Public sector segment market share and (3) niche developers, comprising local, niche companies typically specialised in certain technology or focused on smaller projects with individual municipalities, such as Proactive, Delegate, Miracle and Nine, which, on average, each hold less than 1% of total Public sector segment market share. In recent years, the Group has had success in challenging large incumbents. For the year ended 31 December 2016, the Group held market share based on total annual IT spend of approximately 6% and 1.4% of the core Public sector markets in Denmark and Norway (defined as the core public market), respectively. For 120 --- further details on the core Public sector markets, see “Industry—The Next-Generation IT Services Market and Trends—The Danish IT Services Market—Danish Public Market” and “Industry—The Next-Generation IT Services Market and Trends—The Norwegian IT Services Market—Norwegian Public Market”. The Group is now well positioned to increase its market share in the Public sector segment with a proven project win and delivery track-record in the last two years, as well as strong customer advocacy. The Group’s win rate with respect to tenders in the Public sector segment has continued to increase. In addition, in 2016 and 2017 the Group has achieved pre-qualification in almost all tenders in which it participated, i.e., being one out of three to five companies allowed to make bids on the respective tenders. ## Key focus areas The Group’s key focus within the Public sector segment is to continue to lead the digitalisation agenda, thereby continuing to disrupt and replace traditional incumbents with a focus on large and complex projects within KOMBIT and ATP, the Danish central government and the largest municipalities and regions in Denmark. In Norway, the Group is building up its market position, but is still considered to be a relatively new and upcoming player. In this market, the Group intends to continue to strengthen its position by leveraging its local and Group knowledge and experience, as well as its unique and extensive customer reference base in the Danish Public sector market. To date, this has already resulted in the awarding of two key contracts to the Group during the summer of 2017, with Oslo Kommune and Skatteetaten. In the United Kingdom, the Group intends to leverage its knowledge and experience of the Danish market and bid on government public tenders in a market that is already large and that the Group expects to grow further as a consequence of the UK government’s increased digitalisation agenda (including in connection with Brexit). The Group is working on developing its relationships with the relevant government agencies and organisations in order to enhance its current good position even further in order to increase its tender win rates and to utilise its existing strong contacts and engagements within key UK ministries, such as the Home Office, the Ministry of Defence and the Ministry of Justice. ## Private ### Overview In the Private sector segment, the Group provides IT services from development to maintenance and operations for mid- to large-sized customers which are often leaders in their respective industries, such as, in Denmark, TDC, Falck, Solar, Novo Nordisk, Ørsted, PensionDanmark and AO Johansen; in Norway, Norgesgruppen, DNB and Møller Gruppen, and in the United Kingdom, Airbus, Rolls Royce and Meggitt. The Group provides IT services from development to maintenance and operations in the Private sector segment to membership organisations, such as trade unions, with very complex business rules governed by unemployment benefits laws. See “—Categories of Services and Solutions” below for further detail on the Group’s IT services. ### Private sector segment case study—Copenhagen Airports Since 2012, Copenhagen Airports (“CPH”) has been a strategic client of the Group. CPH is the largest airport operator in the Nordic region with more than 29 million passengers annually, approximately 21,000 service personnel and 2,400 employees. The number of passengers has grown 25% since 2012 and with limited options to expand due to physical constraints, CPH considers every opportunity to optimise its operations and to accommodate increased customer demand for a strong retail experience as well as unique customer service. Using artificial intelligence, the Group has developed an advanced data operation system for CPH that provides information across all operating areas with high accuracy for estimated baggage arrival times. Precise estimated baggage arrival times are critical to optimally manage passenger flow through the airport. In addition, when detailed customer preference data is also incorporated into the total solution, CPH will be able to direct passengers to either baggage claim or retail areas depending on the estimated baggage arrival time. As a result, passengers have a better airport experience and CPH is able to manage its physical space more efficiently. CPH now has access to a new level of information flows and is able to optimise its internal operations, providing a much better service for travellers and their customers. ### Contractual framework On average, most large Private sector segment contracts have a duration of approximately 12-18 months and larger share of time and material engagements reflecting a fundamental difference in the purchasing pattern for 121 --- Private sector segment customers compared to Public sector segment customers. Private customers typically renew their ongoing contractual engagements with the Group meaning a higher proportion of revenue will therefore be maintenance-based, which is also different from the dynamics in the Public sector segment. While contract structures differ between customers, in 2017 the Group had an approximate 10%/90% split between fixed price and time and material contracts in the Private sector segment based on the number of contracts. In the Private sector segment, the Group is in the process of transitioning out of smaller, niche solutions based on time and material contracts into more complex and multi-year, contract engagements. These projects typically involve more innovation and allow the Group to better utilise competencies to solve complex problems. These projects also tend to have higher strategic value to customers and more limited competition from other IT services companies in the Private sector segment, as they require a higher degree of agility and scaling capacity. This frequently justifies a higher price premium compared to more commoditised solutions. The Group's sales approach in the Private sector segment differs from its competitors in two aspects: - All sales activities are conducted by integrated sales and delivery teams, that are the same people who deliver the actual IT projects (this is the same approach the Group uses in the Public sector segment). - Most new sales activities are initiated in close cooperation with existing customers through referrals. Due to the increasing complexity of many enterprise IT systems, the sales process has itself become more complex and is now characterised by the inclusion of high-end competency at many levels, including both technical and within the customer's particular business domain. As a result, it is now more important to demonstrate actual knowledge and detailed insight to a prospective customer than through more traditional sales and marketing focused efforts with limited customer or domain expertise and knowledge. There is also an increasing focus by customers on agile deliveries and digitalisation solutions, well suited to the services offered by, and the established reputation of, the Group. By focusing on these aspects in its sales approach and on delivery of quality solutions within budget to its customers, the Group has been able to increase its relative share of revenue generated from customers with an annual IT spend of over DKK 10 million in the Private sector segment in Denmark, from 40% of total revenue in the Private sector segment in the year ended 31 December 2015 to 53% of total revenue in the Private sector segment in the year ended 31 December 2017. Typically most tenders in the Private sector segment are a combination of several meetings and sales presentations to potential customers. Frequently, the Group conducts a pre-analysis phase with a prototype or proof of concept being one of the main sales deliverables that is shown to the prospective customer. If the Group is successful and wins the particular tender, the same team then continues to deliver the remaining phases of the project/IT service in conjunction with the additional resources necessary to successfully develop the project/IT service to the customer's specifications and requirements. ## Competitive landscape/competitors The Group's competitors in the Danish Private sector segment comprise: (1) large incumbents, comprising large companies that have generally been in the market for more than 20 years and tend to focus on larger, less complicated projects with revenues primarily driven from maintenance and operations, such as Capgemini, IBM and Tata, which each hold between 5% and 10% of total private sector market share, (2) adapting incumbents, comprising companies focused on closing the gap by offering simple, innovative IT services with a limited backlog of larger legacy work, such as Accenture, NNIT and EG, which each hold between 2% and 5% of total private sector market share and (3) niche companies, comprising small companies with niche focus on either specific verticals or services, such as Systematic and AlfaPeople among many others, which, on average, each hold less than 1% of total private sector market share. For the year ended 31 December 2016, the Group held market share based on total annual IT spend of 7% and 1.9% of the core private markets in Denmark and Norway, respectively. ## Key focus areas The Group's key focus within the Private sector segment is to become a leader among mid- and large-sized companies as well as membership organisations, such as trade unions, with an annual external IT and digital services spend of more than DKK 10 million. The Group intends to focus on delivering large and complex projects on time, on budget and within scope, thereby building a high share of wallet with selected core customers. The Group's goal is to benefit from the "tailwind" that typically follows increased private spend on innovation and differentiation. The Group aims to win a few accounts per year among mid- and large-sized 122 --- companies, enabling it to firmly establish a position and build scale with large customer accounts. Part of the Group's key focus is to complement the core customers in the Private sector segment with additional mid-sized accounts, for which the Group will take an end-to-end project ownership approach. In these mid-markets, the Group's aim is to win "full scope" contracts pursuant to which it will be responsible for providing customers with a full range of services. ## Categories of Services and Solutions The Group provides end-to-end next-generation IT services to its customers, including development, maintenance and operations. The Group is legacy free and technology agnostic which means that its service offering is not restricted to older, more traditional systems or technologies, or limited to a particular technology or platform. The Group will deliver business critical IT solutions using any modern platform or technology preferred by its customers. The Group's revenue from the Private sector segment is derived from development, and maintenance and operations, which comprised 13.8% and 23.9%, respectively, of the Group's total organic revenue for the three months ended 31 March 2018 and 15.5% and 31.8%, respectively, of the Group's total organic revenue for the year ended 31 December 2017. Development, and maintenance and operations for the Group's Public sector segment comprised 27.9% and 34.3%, respectively, of the Group's total organic revenue for the three months ended 31 March 2018 and 33.2% and 19.5%, respectively, of the Group's total organic revenue for the year ended 31 December 2017. The following table sets forth a breakdown of the revenue from the Group's development and maintenance and operations services on a segment level as a percentage of overall Group revenue as well as the total revenue derived from development, maintenance and operations services in each segment for the three months ended 31 March 2018 and 31 March 2017 and the years ended 31 December 2017, 2016 and 2015. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million, unless otherwise indicated \| \| \| \| \| \| Public sector \| \| \| \| \| \| \| Revenue derived from development \| 44.8% \| 57.4% \| 60.3% \| 45.2% \| 43.9% \| \| Revenue derived from maintenance and operations \| 55.2% \| 42.6% \| 39.7% \| 54.8% \| 56.1% \| \| Total revenue derived from development, maintenance and operations \| 285.8 \| 152.6 \| 730.2 \| 368.3 \| 311.5 \| \| Private sector \| \| \| \| \| \| \| Revenue derived from development \| 41.2% \| 29.4% \| 30.1% \| 51.2% \| 47.1% \| \| Revenue derived from maintenance and operations \| 58.8% \| 70.6% \| 69.9% \| 48.8% \| 52.9% \| \| Total revenue derived from development, maintenance and operations \| 231.2 \| 180.3 \| 685.9 \| 531.3 \| 446.6 \| --- The following table sets forth a breakdown of the organic revenue from the Group's development and maintenance and operations services on a segment level as a percentage of overall Group organic revenue as well as the total organic revenue derived from development, maintenance and operations services in each segment for the three months ended 31 March 2018 and 31 March 2017 and the years ended 31 December 2017, 2016 and 2015. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million, unless otherwise indicated \| \| \| \| \| \| Public sector \| \| \| \| \| \| \| Organic revenue derived from development (non-IFRS)(1) \| 44.8% \| 60.2% \| 63.0% \| 45.4% \| 43.9% \| \| Organic revenue derived from maintenance and operations (non-IFRS)(1) \| 55.2% \| 39.8% \| 37.0% \| 54.6% \| 56.1% \| \| Total organic revenue derived from development, maintenance and operations (non-IFRS)(1) \| 275.8 \| 141.2 \| 649.1 \| 365.6 \| * \| \| Private sector \| \| \| \| \| \| \| Organic revenue derived from development (non-IFRS)(1) \| 36.6% \| 33.9% \| 32.7% \| 51.5% \| 47.1% \| \| Organic revenue derived from maintenance and operations (non-IFRS)(1) \| 63.4% \| 66.1% \| 67.3% \| 48.5% \| 52.9% \| \| Total organic revenue derived from development, maintenance and operations (non-IFRS)(1) \| 167.4 \| 156.6 \| 583.0 \| 522.3 \| * \| (1) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. () Not meaningful. ## Development The Group offers development services to its customers within the Private and Public sector segments. Development involves the design, development and implementation of complex business critical IT solutions in the digital transformation areas of systems modernisation, system of differentiation and systems of innovation projects. A focus area within development is systems modernisation. The Group helps its customers to digitally transform their systems from older legacy based systems and solutions of various kinds, which were internally developed or based on older legacy applications. The implementation of the ICI project as described above, is an example of such a systems modernisation. See “—Key Business Areas—Sectors—Public—Public sector segment case study—Skatteministeriet”. As part of development, the Group also offers system integration services by helping customers migrate from legacy solutions to standardised solutions. System integration is typically centred on customers with large governance and service complexity, for example in the finance and telecom (billing) industries, and the solutions that the Group provides its customers are frequently described as being business critical for its customers. This also includes establishing the digital platform for customers, including customer centric systems, ecosystem integration and data insight. Further, the Group develops innovative bespoke, complex and business critical IT solutions, often initiated through a "Design Thinking" approach that seeks to uncover potential solutions that could provide customers value in terms of a digital advantage. The solutions are developed in fast-paced project teams using modern technologies and then validated by customers. Many of the projects employ next-generation technologies such as predictive analytics and artificial intelligence to recognise complex patterns and develop complex algorithms using machine learning. ## Maintenance and operations The Group has been offering maintenance of IT solutions delivered by the Group to its customers since 2005 and operations of its customer's IT platforms and systems since 2013. Through its maintenance services, the Group helps clients realise significant ongoing business and cost benefits through its deep and comprehensive understanding of clients' systems landscape, the IT solutions it implements and helps keep customer systems up to date with new and changed business and organisational demands. --- 125 # Maintenance The Group’s maintenance services are a natural follow on from any IT service. Maintenance services are delivered by the Group through: (1) extending the work of the development team after the initial project, by providing new releases and support, (2) its dedicated application management centre with more than 160 employees focused on providing maintenance and services and (3) its employees throughout the various delivery units, where employees perform both development and maintenance tasks. Customers who select the Group as an IT services provider frequently also enter into a maintenance agreement after the IT system has been delivered and is in use. The principal component of the Group’s maintenance services consists of maintaining the original systems and solutions delivered by the Group, but also in some cases, systems and solutions originally developed by the customer itself or by a third party. A significant amount of the Group’s maintenance services contracts are multi-year contracts covering the day-to-day management of customers’ IT systems. In most instances relating to large system implementation programs, the maintenance of an IT system may involve large enhancement projects that then remain with the Group team that originally built the solution. In this case, maintenance services are not moved to the Group’s application services centre but remain with the team and the delivery unit that managed the project initially (not necessarily at the customer site), which will then for several years maintain and further develop the solution. This ensures that any loss of knowledge is minimised when a project is handed over from one team to another, ensuring that the team with the most insight and knowledge of the project remains in place, significantly increasing the efficiency in maintaining the solution and minimising the risk of introducing errors. Depending on the size and complexity of the solution, maintenance agreements can vary from a small monthly fee accompanied by an agreement with the Group to provide assistance invoiced by the hour, to having large teams of full time application management professionals allocated to the customer on a yearly basis, all the way up to having significant teams allocated to the customer on multi-year contracts. # Operations In addition to maintenance, the Group has been offering operations services to its customers since 2013. The Group originally started offering these services in order to gain market share in the Public sector segment, where it needed to be able to offer turnkey tenders for the entire operation of customer systems, including providing operations services. Operations services involve day-to-day operational management for customers of Group developed IT services. Technological developments, including growth in cloud-based IT services, opened up a more flexible and cost effective way for the Group to offer operations services to its customers. As a result of the modern solutions offered by the Group that build on new technologies, the Group is able to offer operations services to customers that do not require large-scale data centres to operate. The more traditional organisational set-up of IT services providers is based on two separate teams in charge of creating and operating IT solutions, a development team and an operations team, often with competing goals and focus (for example, functionality and features versus stability of servers, networks and hardware). Instead of following the traditional organisational set-up where classic operational IT specialists monitor servers, network and hardware, the Group has built a “DevOps” center, where the operations services are handled by teams with both systems developers and operations specialists. The Group offers customers day-to-day operational management primarily of systems and solutions it has developed or where the Group is already providing application management to a customer. The Group currently provides operations services for more than 100 customer systems in both the Public and Private sector segments. As at 31 March 2018, the Group ran approximately 3,000 servers and had a storage area network capacity of more than 3,500 TB of storage capacity from two data centres based in Ballerup and Glostrup, which feature automatic capacity “over-flow” capabilities and have experienced operating “up-time” of 99.99% from 31 March 2015 through to 31 March 2018. # Customers The Group’s five largest customers generated approximately 37.8% and 33.3% and its ten largest customers generated approximately 48.8% and 43.7%, of total revenue in the three months ended 31 March 2018 and in the year ended 31 December 2017, respectively. --- The Group conducts a number of annual customer satisfaction surveys which help to ensure focus on customer satisfaction. The Group uses the results of these customer satisfaction surveys to monitor and improve its relationship with its customers. As at 31 December 2017, the Group had a NPS of 32% in the Public sector, which was 58 percentage points above that of its competitors at -26% on average, and a NPS of -4% in the Private sector, which was 31 percentage points above that of its competitors at -35% on average. In the Private sector, the Group has a particularly strong NPS among its large customers with an IT spend in total (including IT spend outside of the Group) of over DKK 100 million per year, at 33% as at 31 December 2017. Over time, the Group has turned a large portion of its customer relationships into strategic partnerships resulting in an expansion in the number and diversification of the types of IT services delivered by the Group to its customers. In the year ended 31 December 2017, 90.6% of revenue in Denmark was generated from existing customers, defined as those customers from who the Group derived revenue in the previous year, in the year ended 31 December 2016 and 77.4% of the revenue in 2017 was generated from customers who have been with the Group for more than three years. ## Sales and Marketing The same organisational units are responsible for both sales and project delivery at the Group. This approach requires certain personal and organisational capabilities, but the Group believes that the benefits are significant as the people responsible for sales will be the same people responsible for delivering the solution and therefore are best positioned to both formulate the most realistic proposal and to be responsive to follow-up questions from the customer as and when they arise. For further details, see “—Key Business Areas—Sectors—Public—Contractual framework” and “—Key Business Areas—Sectors—Private—Contractual framework”. ## Vendor Relationships and Strategic Partnerships The Group is technology agnostic, but maintains a variety of strong collaborative partnerships with key software, hardware and platform vendors in order to provide IT services that incorporate, integrate or modify technology from such third-party vendors. Partner engagements may be based on joint business plans that include customer targeting, marketing efforts, training employees and cultivating strong executive-level working relationships. The Group considers such relationships important to its development efforts and an important part of its business strategy. The possibility of new vendor relationships and strategic partnerships is constantly monitored by the Group once new third-party vendors gain an appropriate level of market share. The Group enjoys a strong market position in Denmark, and believes that most of the relevant third-party vendors actively pursue the possibility of partnerships with the Group. Once entered into, these partnerships can often then be leveraged in other markets. Strategic partnerships are long-term, multi-year engagements with partners with significant market positions in the Group's primary markets and where a significant part of the IT services the Group develops are based on the partner's technologies. The Group maintains a number of strategic partnerships, including with Microsoft and Oracle. The Group is a Microsoft Gold Certified Partner, SalesForce Gold Certified Partner and Oracle Partner, and its employees have certifications from various technology partners (including Microsoft and Oracle). ## Employees The quality and dedication of the Group's IT personnel are critical to the Group's success. The Group believes that the quality and level of service that its employees deliver are among the highest in the IT services industry. The Group believes its unique and accelerated career development programme, merit based performance culture, differentiated management model, as well as its reputation and track-record for successfully delivering complex, business-critical IT development projects have all enabled it to attract, recruit and retain some of the best available young and talented university graduates with IT and science related degrees. The Group is known among potential candidates as an excellent workplace to build a career, among the best and brightest, with some of the most interesting projects and empowering jobs and where young ambitious people grow and progress faster than with most other employers in the industry. Through this attractive employee value proposition, combined with word of mouth employee referrals, extensive employer branding activities and partnership programmes with certain of the top universities in Denmark, the Group is able to continue its recruitment of young ambitious top talent. 126 --- The Group's continuing ability to attract such talent is critical to its continued success. In 2017, 86% of the Group's new hires had bachelor (or higher) degrees and approximately 68% of its consultants, 75% of its senior consultants, 86% of its managers, 89% of its principals and 100% of its Partners had an IT background or significant experience within the IT industry. The Group firmly believes in IT people leading IT people. As outlined further below, the Group's talent and career development programme is delivered through the Netcompany Academy and is designed to continuously monitor and develop its employees. It is focused on attracting and building top talent through an accelerated merit-based career model. The Group offers continuous, dedicated, personal and professional career counselling, mentoring and training throughout each individual employee's career from consultant through to Partner. The Group constantly monitors, maintains and manages its fast growing organisation, through monthly performance meetings between Executive Management and individual delivery unit Partners. In addition, Executive Management meets monthly to discuss personnel and human resource issues across delivery units. These meetings are supported by a monthly organisational review report with detailed information on headcount, recruitment, employee churn and employee well-being. ## Current FTEs The Group has experienced high growth in the number of employees since its inception. The following table sets forth the Group's FTEs by location on the dates presented. As at 11 May 2018 (the most recent practicable date prior to the date of this Offering Circular), the Group had 1,751 FTEs (excluding freelancers in Denmark and Norway). \| Region \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Denmark(1) \| 999 \| 763 \| 951 \| 707 \| 608 \| \| United Kingdom(2) \| 263 \| — \| 252 \| — \| — \| \| Poland \| 194 \| 121 \| 173 \| 91 \| 52 \| \| Norway(1) \| 141 \| 110 \| 141 \| 111 \| \| \| Vietnam \| 121 \| — \| 110 \| — \| — \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Total(3) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Does not include freelancers, as such personnel are not a prominent feature of the Danish or Norwegian IT systems and solutions labour market. (2) Includes subcontractors, as such personnel are a prominent feature of the United Kingdom IT systems and solutions labour market. (3) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. The Group's sourcing centers in Poland and Vietnam are not traditional outsourcing centers, but rather provide the Group with additional large sourcing pools of skilled employees who are able to work together as part of integrated project teams with all of the Group's employees based in other locations all supported by virtual and physical IT environments. The Group believes that it will continue to increase the number of employees based in its sourcing centres over time to meet the needs of its future growth. The following table sets forth the Group's customer-facing FTEs, non-customer-facing FTEs and total FTEs at year-end for the periods indicated. \| \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Customer-facing FTEs(1) \| 1,613 \| 952 \| 1,534 \| 869 \| 631 \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Non-customer-facing FTEs \| 105 \| 44 \| 93 \| 40 \| 29 \| \| Total FTEs(2) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. (2) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. ## Headcount scaling The Group's growth and continued development requires it to continue growing its employee base. As part of the Group's performance culture and career development model, the Group plans its headcount growth and --- scaling based on a consultant to manager leverage ratio that reflects its project and team organisation on all customer projects. This has been a stable principle of the Group's business model since the Group's inception. # Career development programme As illustrated in the graphic example below, the Group's career development programme is carefully designed to continuously monitor and develop each individual employee's professional and personal skills. The overall aim is to continuously accelerate and facilitate each individual employee to keep growing, develop new professional, personal and leadership skills, take on more responsibility and perform better. Through regular performance appraisals and active mentoring, new areas of individual professional and personal development are constantly identified, leading to new and increasingly more complex tasks, assignments and responsibilities for each employee. This particular program applies for the Danish development organisation and similar models exist for the other parts of the Group. ![img-0.jpeg](img-0.jpeg) THE GROUP'S CAREER DEVELOPMENT PROGRAM OFFERS A STRUCTURED CAREER PATH WITH SPECIALISATION AFTER INITIAL NEW-STARTER LEVEL \| Career tracks \| % of total consultant staff 2017 \| Description \| \| --- \| --- \| --- \| \| Consultants & Test Specialists \| ~40% \| • New junior hires start as generalists before specialization into either Specialist, Generalist, or Architect consultants \| \| Architects \| ~8% \| • Technical expertise in the management of technical architecture and software development \| \| Generalists \| ~35% \| • Project management, sales, relations, management of client expectation \| \| Specialists \| ~6% \| • Development of domain expertise, acquire profound practical knowledge and be a technical programmer \| \| Others (not illustrated) \| ~13% \| • Analysts, Interface or System consultants, etc. \| The Group's career development programme encompasses: - Carefully designed role descriptions defining professional, personal and leadership role attributes for all roles at all career levels. Different career tracks are designed to support the different roles needed to deliver complex IT projects and to accommodate and support individual career preferences for generalist project managers, architects, technology and domain specialists etc. - Detailed performance appraisal templates supporting all career model roles to facilitate performance feedback and regular appraisal meetings. All employees are given regular and detailed performance feedback from the experienced IT professional direct reports, ensuring both individual relevance while enforcing common criteria across all employees. - Mentoring scheme and templates to facilitate regular mentoring meetings to discuss long-term career development planning and counseling, with relevant and more experienced IT professionals within the same career track. - On-the-job training through carefully and individually selected project assignments, based on individual feedback from project performance appraisals and the mentoring scheme. - Mandatory and optional Netcompany Academy training courses and certification. --- The following table sets forth the breakdown of the Group's FTEs on a professional role level on the dates presented. \| Employees \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Partners \| 28 \| 19 \| 30 \| 19 \| 15 \| \| Principals \| 48 \| 27 \| 48 \| 28 \| 22 \| \| Managers \| 211 \| 168 \| 235 \| 170 \| 134 \| \| Senior Consultants \| 450 \| 288 \| 437 \| 271 \| 198 \| \| Consultants \| 634 \| 416 \| 535 \| 353 \| 245 \| \| Administrative \| 105 \| 44 \| 93 \| 40 \| 29 \| \| Trainees \| 45 \| 33 \| 70 \| 29 \| 18 \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Subcontractors \| 197 \| 0 \| 180 \| 0 \| 0 \| \| Total(1) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. ## Netcompany Academy The Netcompany Academy is the Group's dedicated and highly specialised employee training programme. It is designed to support rapid and focused career and skill development in the Group's career development programme. All Netcompany Academy training courses are designed and developed by experienced Group executives, managers and systems architects. Each training course is designed to accelerate particular skill development in specific roles, in different career tracks within the career development model. This ensures conformity across projects and builds and promotes common Group culture. The courses are continuously evaluated and updated to reflect changes in technologies, methodologies and tools. Employee feedback ensures continuous input from customer projects and maintenance teams. Instructors who teach Netcompany Academy courses are typically Group seniors or managers with extensive relevant hands-on experience. The mandatory training courses ensure that all employees receive uniform training, tailored to the Group's project management model and methodology. Optional training sessions, external courses and conferences are also offered at manager level to complement the mandatory element of the Netcompany Academy. Netcompany Academy offers all employees the opportunity to participate in relevant vendor certification programmes. ## Netcompany After Dark After Dark is the Group's platform for employee social events, providing strong cultural glue across delivery units and seniority and allowing employees to meet through informal events, parties and sports activities. After Dark offers an extensive number of activities, all fully sponsored by the Group and operated on a voluntary basis by the employees themselves. ## Employee churn Historically, the yearly churn of Group employees, both voluntary and involuntary, has been stable at approximately 17%. This level of attrition is in line with the Group's target attrition rate to maintain its effective pyramid structure in line with a typical high-performance management consultancy up-or-out model. ## IT Audit Standards Within the Group's operations services division (aimed at external customers) and application services, the Group regularly undertakes external audits and obtains ISAE 3000 and ISAE 3402 IT certifications. These certifications are focused on operations that the Group is conducting of clients' IT environments (and to some extent application services) controls and processes. ## Material Contracts ### Material agreements entered into outside the ordinary course of business Save as disclosed below, there are no contracts (other than those entered into in the ordinary course of business) to which the Group is a party which (i) are, or may be, material to the Group and which have been entered into in the two years immediately preceding the date of this Offering Circular; or (ii) contain any obligations or entitlements which are, or may be, material to the Group as of the date of this Offering Circular. --- 130 # Material acquisitions ## Acquisition of Mesan AS On 31 October 2016, the Group entered into a share purchase agreement with the owners of the Norwegian based IT services company, Mesan AS, relating to the acquisition of 100% of the share capital of Mesan AS for an aggregate consideration of DKK 195.6 million. Adjusting for the cash position in Mesan AS at the closing of the transaction, the net consideration paid by the Group for the company was NOK 205.8 million (DKK 168.2 million). The transaction was completed on 22 November 2016. See “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations—Acquisitions”. Pursuant to the share purchase agreement, some of the Mesan AS selling shareholders who were part of the company’s management team, reinvested a portion of the proceeds from their sale of shares, as well as prepaid bonuses, extraordinary bonuses and some own funds, into the Group. Certain of the Mesan AS selling shareholders have covenanted pursuant to the share purchase agreement that they would not directly or indirectly compete with the Group’s business, solicit for employment certain key employees or encourage customers and/or suppliers to terminate or negatively alter their commercial relationship with the Group’s business for a period of 24 months following closing of the transaction. The acquisition has allowed the Group to further its expansion strategy across Northern Europe and into Norway, which is an attractive market for the Group given its similar characteristics to the Danish market and high digitalisation. The integration of Mesan AS into the Group has now been completed and was characterised by the following integration processes: 1. Marketing and sales—aligning sales messages, increasing awareness of the Netcompany brand and integrating sales and delivery responsibility, to enable the Group to sell larger and more complex IT projects in Norway. 2. People and organisation—implementing the Group’s employer branding programme to attract and scale recruitment of top class IT talent and to implement the Group’s career development model encompassing: performance appraisals, the mentoring scheme, Netcompany Academy and centres of excellence. 3. Quality management—implementing a quality management roadmap, goals and toolkit for documentation, aligning with Group methodology and project tools. 4. Finance management—creation of a 2017 budget and alignment of financial reporting, integration of systems and finance and implementation of a new ERP system. 5. Infrastructure—aligning Group infrastructure, hardware, policies and common systems. See “Risk Factors—Risks Relating to the Group’s Business and Operations—The Group may not be successful at identifying, acquiring or integrating other businesses or technologies”. ## Acquisition of Hunter Macdonald Ltd On 13 October 2017, the Group entered into a share purchase agreement with the owners of the United Kingdom based IT services company, Hunter Macdonald Ltd, relating to the acquisition of 100% of the share capital of Hunter Macdonald Ltd for an aggregate consideration of GBP 40.3 million (DKK 345.9 million as at the date of closing of the transaction). The transaction was completed on 25 October 2017. See “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations—Acquisitions” Pursuant to the share purchase agreement, the aggregate consideration was partly paid in cash and partly in NC TopCo A/S shares to Hunter Macdonald Ltd selling shareholders who were part of the company’s management team. The Hunter Macdonald Ltd selling shareholders have covenanted pursuant to the share purchase agreement that they would not directly or indirectly compete with the Group’s activities or solicit, entice away or attempt to solicit or entice away customers or suppliers of the Group for a period of 24 months following closing of the transaction, or solicit for employment employees for a period of 6 months following closing of the transaction. The acquisition of Hunter Macdonald Ltd was made as part of the Group’s expansion strategy across Northern Europe and as an entry into the United Kingdom, which is an attractive market for the Group given its large size and developed market for IT services. --- As of the date of this Offering Circular, a number of system integration tasks have been completed in order to bring Hunter Macdonald Ltd onto the Group's IT platform. The Group's standard integration plan, which was used during the integration of Mesan AS, is being used for the integration of Hunter MacDonald Ltd and is progressing in line with the Group's expectations. See “Risk Factors—Risks Relating to the Group’s Business and Operations—The Group may not be successful at identifying, acquiring or integrating other businesses or technologies”. ## Reorganisation Agreements For a description of the Reorganisation Agreements relating to the IPO Reorganisation and the Post-IPO Reorganisation, see “Reorganisation”. ## Financing Arrangements For a description of the Group’s financing arrangements, see “Operating and Financial Review—Liquidity and Capital Resources—Financing Arrangements and Commitments”. ## Underwriting Agreements For a description of the Underwriting Agreements relating to this Offering, see “Plan of Distribution”. ## LTIP Equity Swap For a description of the LTIP Equity Swap see “The Board of Directors, Executive Management and Key Employees—Incentive Programmes”. ## Intellectual Property Rights The Group relies on a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect its proprietary technology and its brand. The Group holds a trademark for its document management system (GetOrganized) and also leases a number of internet domains, the most important of which is www.netcompany.com. The Group relies on open source software (“OSS”) for a large number of the IT services it provides customers. ## Legal Proceedings, Investigations and Other Regulatory Matters The Group may from time to time be subject to claims and various legal proceedings arising in the ordinary course of business. The Group has not within the last twelve months from the date of this Offering Circular been, and is not currently, party to or aware of any threatened governmental, litigation, administrative, arbitration or dispute proceedings which could in the future have, or have had in the recent past, a material adverse effect on the Group’s business, reputation, results of operations or financial condition. ## Real Property The Group’s headquarters are located at Grønningen 17, DK-1270 Copenhagen K, Denmark, where the Group leases office space of a total of approximately 6,500 square meters. The Group also leases other offices and sales facilities in Aalborg and Aarhus C in Denmark and in other markets in which the Group is represented, including in Oslo, Norway in Warsaw, Poland, in Derby and Reading, United Kingdom and in Ho Chi Minh City and Hanoi, Vietnam. The Group does not consider any real property to be material to the Group’s operations. The Group believes that the properties are generally adequate for their present needs and believes that suitable additional or replacement space would be available to the extent required. None of these properties are subject to material easements that prevent or restrict the Group’s current business activities or will require major investments or incur significant costs going forward. ## Insurance The Group’s insurance coverage covers risks associated with its business, including property and business interruption insurance; business travel insurance; corporate responsibility, professional indemnity and employee 131 --- liability insurance; accident and workers' compensation insurance; D&O insurance and product liability insurance. The Executive Management believes that the Group carries insurance of a type customary for the industry in which the Group operates and at a level which is generally adequate. ## Regulation The Group is subject to EU data protection legislation (Directive 95/46/EC as implemented under Danish law). In May 2018, new requirements related to the treatment of personal data and sensitive personal data will become effective within the EU under a new EU law, the General Data Protection Regulation (EU 2016/679). In addition, many of the Group’s customers are subject to industry-specific regulations, and accordingly these customers’ use of the Group’s services is subject to industry regulation. Some customers are also public entities and are subject to Danish and EU tender process rules. In addition, in large Private sector segment projects, although they are not subject to the same procurement rules, tender procedures are used to select suppliers. ## Risk Management The Group takes a structured approach towards risk management and identified risks are discussed regularly, including formally at the quarterly meetings of the Executive Management and the Board of Directors. The level of significance that the Group gives to a particular risk is based on the assessment of the risk based on past events and the specific risk at hand. During 2018, the Group plans to implement an IT-based tool to assist in the identification, mitigation and management of the Group’s risks. This tool will also facilitate and automate the Enterprise Risk Management process and reporting across the Group and assist in significantly escalating relevant risks from the employee level up through the Risk Manager (Group Finance), the Executive Management and the Audit Committee to the Board of Directors. ## Corporate Social Responsibility and Environment The Group takes corporate responsibility seriously and strives to conduct its activities in a socially responsible way. This includes its attempts at minimising the environmental implications of the Group’s operation and also the Group’s Corporate Social Responsibility (“CSR”) efforts relating to the fight against corruption as well as efforts relating to human rights and labour rights. The Group has therefore joined the UN’s Global Compact. The respective report of the ultimate parent company prior to the IPO Reorganisation, NC TopCo A/S, can be downloaded from: https://www.unglobalcompact.org/what-is-gc/participants/18841-Netcompany-IT-Business-Consulting#cop. Information included on this website does not form part of and is not incorporated into this Offering Circular. 132 --- REORGANISATION # IPO Reorganisation and Post-IPO Reorganisation Steps The IPO Reorganisation described below will be effected prior to Admission but after the publication of this Offering Circular, and the Post-IPO Reorganisation will be effected after Admission. The purpose of the IPO Reorganisation is to modify the corporate structure and ownership from a private ownership structure to a structure suitable for a publicly traded company. The disclosure below, including the structure charts referred to under the headings “Group Structure as at the Date of this Offering Circular” and “Group Structure after Completion of the IPO Reorganisation” are presented to show the historical corporate structures immediately before the corporate structure was adopted which will be in place upon Admission. The diagram “Group Structure after Completion of the Post-IPO Reorganisation” is thus the only relevant diagram describing the group structure in which investors acquire ownership interests through the purchase of Offer Shares. The Company, NC TopCo A/S, the Significant Shareholders and the other existing shareholders of NC TopCo A/S, including NC ShareCo ApS, the joint holding company of certain of the MIP Participants and Employee Shareholders, (the Significant Shareholders and the other existing shareholders of NC TopCo A/S are jointly referred to as the “Existing Group Shareholders”) as well as the shareholders of NC ShareCo ApS and the shareholders of NC ManCo AS, the joint holding company of the Norwegian MIP Participants and Employee Shareholders, have prior to the date hereof entered into certain reorganisation agreements (the “Reorganisation Agreements”), in which it was agreed that the following reorganisation steps (together the “IPO Reorganisation”) be carried out in connection with pricing and prior to Admission and subject to the Offer Price being determined: (a) Settlement of Matching Shares: Those of the MIP Participants and Employee Shareholders who are entitled to matching shares under the Group’s matching shares incentive programme in NC TopCo A/S will be granted such matching shares (“Matching Shares”) in the form of bonus shares issued by NC TopCo A/S. (b) Contribution of the Group to the Company: The Significant Shareholders and the other Existing Group Shareholders will exchange all shares in NC TopCo A/S (including Matching Shares) for new Shares in the Company via a share-for-share exchange. After the share-for-share exchange, there will only be one share class in the Company. The Company will hereafter be the parent company of the Group. The value of the Significant Shareholders’ and the other Existing Group Shareholders’ new Shares in the Company will correspond to the value of their shares in NC TopCo A/S since the value of the different share classes in NC TopCo A/S will be included in the calculation of the number of new Shares in the Company to be allocated to each of the Existing Group Shareholders in the share-for-share exchange. Prior to the share-for-share exchange, a capital decrease to zero will be carried out in NC TopCo A/S to ensure that the Existing Group Shareholders’ respective ownership stakes in the Company correspond to their current ownership stakes of NC TopCo A/S. The nominal share capital of the Company after the completion of the share-for-share exchange will be DKK 50,000,000, whereas the allocation of the new Shares between the Existing Group Shareholders will not be fixed until the final Offer Price has been determined. See “Ownership Structure and Selling Shareholders—Table of shareholders” for an overview of the Existing Group Shareholders’ Shares in the Company following the IPO Reorganisation assuming an Offer Price at the mid-point, top-end and bottom-end, respectively, of the Offer Price Range. Following Admission, and in accordance with the terms of the Reorganisation Agreements, the following steps will be completed (together, the “Post-IPO Reorganisation”): (c) Demerger of NC ShareCo ApS: A demerger of NC ShareCo ApS will be executed as an “immediate demerger” (in Danish: straksspaltning), and the demerger will therefore not be subject to the otherwise applicable four-week notification period. The demerger is expected to be adopted on the date of Admission and registered with the Danish Business Authority before settlement of the IPO. Following the demerger, each current shareholder of NC ShareCo ApS, except for NC ManCo AS, will hold 100% of their own holding company which, in turn, will hold a number of shares in the Company. In order to simplify the group structure, NC ManCo AS will not receive a new holding company upon completion of the demerger, but will receive its indirect proportion of the Shares in the Company as consideration in the demerger. (d) Liquidation of NC ManCo AS: After settlement of the IPO, NC ManCo will be liquidated and its Shares in the Company will be distributed to its shareholders. (e) Possible simplification of Danish holding structure: Netcompany Holding I A/S, NC NewCo A/S and NC TopCo A/S may be merged into Netcompany Group A/S. 133 --- The diagrams below set out the Group structure as at the date of this Offering Circular and following completion of the IPO Reorganisation and the Post-IPO Reorganisation, respectively. ![img-1.jpeg](img-1.jpeg) Group Structure as at the Date of this Offering Circular ![img-2.jpeg](img-2.jpeg) Group Structure after Completion of the IPO Reorganisation --- Group Structure after Completion of the Post-IPO Reorganisation ![img-3.jpeg](img-3.jpeg) ## Reorganisation Agreements The Company, NC TopCo A/S, the Significant Shareholders and the other Existing Group Shareholders as well as the shareholders of NC ShareCo ApS and the shareholders of NC ManCo AS have prior to the date hereof entered into the Reorganisation Agreements to effect the IPO Reorganisation and the Post-IPO Reorganisation upon an Offer Price being determined. See above “—IPO Reorganisation and Post-IPO Reorganisation Steps” for further details regarding the transactions to be effected as part of the IPO Reorganisation and the Post-IPO Reorganisation. The IPO Reorganisation and the Post-IPO Reorganisation are subject to determination of the final Offer Price. Pursuant to the terms and conditions set out in the Reorganisation Agreements, the parties undertake to take certain specified actions required by each of them to effect the IPO Reorganisation and the Post-IPO Reorganisation. The Existing Group Shareholders provide no representations or warranties to the Company or the Group in connection with the IPO Reorganisation and the Post-IPO Reorganisation except as regards to authorisation to enter into the Reorganisation Agreements and their respective title to any shares in NC TopCo A/S contributed by them to the Company in connection with the IPO Reorganisation as well as to any shares they may hold in NC ShareCo ApS and NC ManCo AS. The Reorganisation Agreements will terminate on 31 December 2018 if the Offer Price has not been determined in connection with the Offering before this date. 135 --- # SELECTED HISTORICAL FINANCIAL AND OPERATING INFORMATION For purposes of this Offering Circular, combined financial statements of the Group have been prepared for the reporting period covering the years ended 31 December 2017, 2016 and 2015 in accordance with IFRS, as adopted by the European Union. Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018) and Mesan AS (renamed to Netcompany Norway AS in March 2018), which were acquired during the periods under review, were consolidated into the Group's financial statements as of 25 October 2017 and 22 November 2016, respectively. See “Presentation of Financial and Certain Other Information” and “Reorganisation”. The Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular have been audited or reviewed, as applicable, by the Group's independent auditors, Deloitte, as stated in their reports appearing therein. The selected consolidated financial information comprising selected consolidated income statement, balance sheet and cash flow statements shown below has been derived from the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular. The selected Other Data and Financial Measures as well as the segmental and operating information below has been derived from the Group's regularly maintained records and operating systems. Investors should read the following data together with the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements including the notes to those financial statements and the section in this Offering Circular entitled "Operating and Financial Review". ## Combined Income Statement \| \| Three months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016(1) \| 2015 \| \| \| DKK million \| \| \| \| \| \| Revenue \| 517.0 \| 332.9 \| 1,416.1 \| 899.6 \| 758.1 \| \| Cost of services \| (318.8) \| (192.3) \| (803.4) \| (527.0) \| (446.8) \| \| Gross profit \| 198.2 \| 140.6 \| 612.7 \| 372.6 \| 311.3 \| \| Sales and marketing costs \| (2.7) \| (2.0) \| (9.7) \| (3.7) \| (3.8) \| \| Administrative costs \| (67.7) \| (42.8) \| (201.0) \| (120.9) \| (100.1) \| \| Operating expenses \| (70.4) \| (44.8) \| (210.7) \| (124.6) \| (103.9) \| \| Special items \| (7.7) \| 0 \| (32.9) \| (35.1) \| — \| \| EBITA (non-IFRS) \| 120.1 \| 95.7 \| 369.0 \| 212.9 \| 207.4 \| \| Amortisation \| (28.8) \| (23.9) \| (95.9) \| (73.8) \| — \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| Net financials \| (24.7) \| (23.9) \| (72.2) \| (62.7) \| 0.2 \| \| EBT \| 66.5 \| 48.0 \| 201.0 \| 76.4 \| 207.6 \| \| Tax for the period \| (15.3) \| (12.1) \| (59.4) \| (43.6) \| (19.8) \| \| Profit/(loss) for the period \| 51.2 \| 35.9 \| 141.6 \| 32.8 \| 187.8 \| (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) which, in total, comprise the Group. --- Balance Sheet Data \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| \| \| Goodwill \| 2,108.7 \| 1,883.9 \| 2,108.7 \| 1,883.9 \| 0.0 \| \| Other intangible assets \| 465.2 \| 463.6 \| 495.2 \| 488.7 \| 4.1 \| \| Intangible assets \| 2,573.9 \| 2,347.5 \| 2,603.9 \| 2,372.5 \| 4.1 \| \| Leasehold improvements \| 4.3 \| 3.1 \| 3.9 \| 2.2 \| 2.1 \| \| Equipment \| 20.8 \| 15.4 \| 20.0 \| 14.0 \| 6.4 \| \| Right of use assets \| 26.9 \| 25.2 \| 30.5 \| 25.2 \| 11.9 \| \| Property, plant and equipment \| 52.0 \| 43.8 \| 54.5 \| 41.5 \| 20.4 \| \| Other receivables \| 9.9 \| 6.4 \| 8.8 \| 5.4 \| 4.0 \| \| Deferred tax assets \| 0.7 \| 0.2 \| 0.0 \| 0.2 \| 11.0 \| \| Financial assets \| 10.6 \| 6.6 \| 8.8 \| 5.6 \| 15.0 \| \| Non-current assets \| 2,636.4 \| 2,397.9 \| 2,667.2 \| 2,419.6 \| 39.5 \| \| Trade receivables \| 318.7 \| 193.6 \| 445.4 \| 258.2 \| 180.3 \| \| Receivables from group entities \| — \| 0.0 \| 0.0 \| 0.0 \| 97.7 \| \| Contract work in progress \| 301.6 \| 170.7 \| 139.2 \| 110.5 \| 80.9 \| \| Other receivables \| 9.3 \| 2.2 \| 11.0 \| 6.8 \| 1.0 \| \| Prepayments \| 6.6 \| 6.0 \| 12.3 \| 5.3 \| 5.2 \| \| Receivables \| 636.1 \| 372.4 \| 607.8 \| 380.8 \| 365.1 \| \| Cash \| 154.2 \| 71.2 \| 194.5 \| 60.0 \| 111.5 \| \| Current assets \| 790.4 \| 443.7 \| 802.3 \| 440.8 \| 476.6 \| \| Assets \| 3,426.8 \| 2,841.5 \| 3,469.5 \| 2,860.4 \| 516.1 \| \| Share capital \| 71.7 \| 69.4 \| 71.6 \| 69.3 \| 0.6 \| \| Cash flow hedging reserve \| (29.8) \| (38.7) \| (30.0) \| (39.8) \| 0.0 \| \| Foreign currency translation reserve \| (5.2) \| (2.1) \| (2.9) \| (0.1) \| 0.0 \| \| Deferred cost of hedging reserve \| 13.1 \| 20.9 \| 10.4 \| 18.0 \| 0.0 \| \| Retained earnings \| 1,652.8 \| 1,252.8 \| 1,594.8 \| 1,213.1 \| 299.8 \| \| Equity \| 1,702.6 \| 1,302.3 \| 1,643.9 \| 1,260.5 \| 300.4 \| \| Borrowings \| 1,167.3 \| 1,175.7 \| 1,264.9 \| 1,178.0 \| 0.0 \| \| Leasing \| 15.0 \| 13.6 \| 17.6 \| 13.6 \| 6.1 \| \| Deferred tax liability \| 116.9 \| 106.1 \| 112.4 \| 111.2 \| 0.0 \| \| Non-current liabilities \| 1,299.2 \| 1,295.4 \| 1,394.9 \| 1,302.8 \| 6.1 \| \| Borrowings \| — \| 0.6 \| 0.0 \| 28.0 \| 0.0 \| \| Leasing \| 12.8 \| 11.7 \| 13.6 \| 11.7 \| 5.8 \| \| Prepayments received from customers \| 46.2 \| 19.5 \| 36.2 \| 27.5 \| 27.2 \| \| Trade payables \| 54.3 \| 16.9 \| 50.6 \| 26.8 \| 18.6 \| \| Payables to group entities \| — \| 0.0 \| 0.0 \| 0.0 \| 52.1 \| \| Other payables \| 199.9 \| 157.7 \| 223.1 \| 163.3 \| 80.0 \| \| Provisions \| 30.4 \| 2.5 \| 30.4 \| 8.9 \| 5.0 \| \| Income tax payable \| 81.4 \| 34.8 \| 76.8 \| 31.0 \| 20.9 \| \| Current liabilities \| 425.0 \| 243.8 \| 430.7 \| 297.1 \| 209.6 \| \| Liabilities \| 1,724.2 \| 1,539.2 \| 1,825.6 \| 1,599.9 \| 215.7 \| \| Equity and liabilities \| 3,426.8 \| 2,841.5 \| 3,469.5 \| 2,860.4 \| 516.1 \| 137 --- # Statement of Cash Flow Data \| \| Three months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016(2) \| 2015 \| \| \| DKK million \| \| \| \| \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| Depreciation and amortization \| 38.5 \| 27.7 \| 129.2 \| 94.2 \| 20.8 \| \| Working capital changes \| (35.0) \| (20.7) \| (95.0) \| (19.6) \| 9.1 \| \| Free cash flow(1) \| 94.7 \| 78.9 \| 307.3 \| 213.6 \| 237.2 \| \| Paid taxes \| (10.4) \| (19.4) \| (35.4) \| (34.0) \| (20.6) \| \| Net financials \| (13.3) \| (15.6) \| (76.6) \| (62.7) \| 0.2 \| \| Cash flows from operating activities \| 71.1 \| 43.8 \| 195.3 \| 116.9 \| 216.8 \| \| Net cash outflow on acquisition of subsidiaries \| — \| 0.0 \| (120.3) \| (2,516.1) \| 0.0 \| \| Acquisition of intangible assets \| — \| 0.0 \| (11.1) \| (9.2) \| (5.9) \| \| Acquisition of property, plant and equipment \| (3.5) \| (4.9) \| (16.7) \| (13.0) \| (3.0) \| \| Other receivables (deposits) \| (1.1) \| 0.0 \| (2.3) \| (1.5) \| (0.6) \| \| Cash flows from investing activities \| (4.6) \| (4.9) \| (150.5) \| (2,539.7) \| (9.6) \| \| Dividends \| — \| 0.0 \| 0.0 \| (116.4) \| (100.0) \| \| Proceeds from issue of share capital \| 6.9 \| 3.9 \| 16.7 \| 1,265.1 \| 0.0 \| \| Proceeds from borrowings \| — \| 0.0 \| 92.0 \| 1,178.0 \| 0.0 \| \| Repayment of borrowing \| (114.7) \| (3.9) \| (16.6) \| (11.0) \| (8.6) \| \| Cash flows from financing activities \| (107.7) \| (0.0) \| 92.2 \| 2,315.7 \| (108.6) \| \| Net cash flow \| (41.2) \| 38.9 \| 137.0 \| (107.0) \| 98.6 \| \| Cash and cash equivalents at beginning of period \| 194.5 \| 32.0 \| 32.0 \| 111.5 \| 12.9 \| \| Cash and cash equivalents balances acquired \| — \| 0.0 \| 26.3 \| 27.6 \| 0.0 \| \| Effect of exchange rate changes on the balance cash held in foreign currencies \| (1.0) \| (0.2) \| (0.8) \| (0.1) \| 0.0 \| \| Cash and cash equivalents at end of period \| 154.2 \| 70.7 \| 194.5 \| 32.0 \| 111.5 \| (1) Free cash flow is defined as cash flow from operating activities less cash flow from paid taxes, net financials and investing activities. (2) Cash flow during the period was impacted due to the Significant Shareholders acquiring a majority stake in the Group in February 2016 and a subsequent capital increase of DKK 1.3 billion. To allow for meaningful comparison between the full-year numbers, the cash flow for the year ended 31 December 2016 shows the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) which, in total, comprise the Group. --- 139 # OPERATING AND FINANCIAL REVIEW For purposes of this Offering Circular, combined financial statements of the Group have been prepared for the reporting period covering the years ended 31 December 2017, 2016 and 2015 in accordance with IFRS, as adopted by the European Union. Hunter Macdonald Ltd and Mesan AS, which were acquired during the periods under review, were consolidated into the Group's financial statements as of 25 October 2017 and 22 November 2016, respectively. See "Presentation of Financial and Certain Other Information" and "Reorganisation". The Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular have been audited or reviewed, as applicable, by the Group's independent auditors, Deloitte, as stated in their reports appearing therein. You should read the following operating and financial review of the Group on a combined basis in conjunction with the sections entitled "Selected Historical Financial and Operating Information", "Presentation of Financial and Certain Other Information" as well as the Combined Financial Statements and the Condensed Consolidated Interim Financial Statements and the related notes included elsewhere in this Offering Circular. This discussion may contain forward-looking statements, which are subject to risks and uncertainties, including, but not limited to, certain risks described in the "Risk Factors" section of this Offering Circular. Actual results could differ materially from those expressed or implied in any forward-looking statements. See the section entitled "Special Notice Regarding Forward-Looking Statements" in this Offering Circular. ## Overview The Group is a pure-play next-generation IT services company, focused on delivering business critical IT solutions to large Public and Private sector customers to lead and support them in their digital transformation journeys. These solutions are at the heart of an organisation's core strategy or function and are thus highly significant for customers in conducting their core business. The Group has developed and institutionalised a highly differentiated business model that, for over 18 years, has proven to be repeatable and scalable and enables the Group to deliver projects on time, on budget and within scope. The uniqueness of the Group's business model is characterised by an integrated sales and delivery approach, IT people leading IT people, a very customer transparent and deliverable-driven methodology and a highly skilled team of IT professionals, with an average age in 2017 of approximately 33 years. The Group's business is comprised of two main segments, each of which is an operating segment for financial reporting purposes: - Public sector. Public sector revenues accounted for 55.3% and 51.6% of the Group's total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 50.7% and 39.0% of the Group's Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. - Private sector. Private sector revenues accounted for 44.7% and 48.4% of the Group's total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 49.3% and 61.0% of the Group's Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. The Group's IT services cover development through to maintenance and operations. The Group's development services include design, development and implementation of IT solutions driven by customer requirements in the digital transformation areas of systems modernisation, system differentiation and system innovation projects. Its maintenance and operations services include long term benefit realisation initiatives, to continuously maintain, operate and support customer IT solutions that the Group has delivered. As at 11 May 2018, the Group had approximately 1,432 employees based in its key geographies of Denmark, Norway and the United Kingdom (excluding freelancers in Denmark and Norway) and an additional 319 employees based in Poland and Vietnam. ## Consolidated Income Statement Line Items The following section presents the Group's income statement line items derived from the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements. ## Revenue The Group's primary service offerings include IT services and operations solutions. Consulting services are generally provided on either a time and material or fixed price contract basis. Revenue from time and material --- contracts is recognised as hours are delivered and direct expenses are incurred. Revenue from fixed price contracts is recognised pursuant to the percentage-of-completion method, whereby revenue is recognised based on cost of hours incurred to date as a percentage of the total estimated cost of hours to fulfil the contract. Revenue from operations solutions is recognised in the period the solutions are provided, which will either be based on output measures or using the straight-line method over the term of the contracts. ## Cost of services Cost of services includes expenses, external project costs, wages, salaries and depreciation directly incurred as part of the Group’s delivery of projects to achieve revenue for the year. ## Gross profit Gross profit is the Group’s revenue minus cost of services. ## Sales and marketing costs Sales and marketing costs include expenses relating to the Group’s sales and marketing efforts, including expenses, external project costs, wages, salaries and depreciation indirectly incurred to achieve revenue for the year. ## Administrative costs Administrative costs include costs incurred for the Group’s administrative function, including wages and salaries for administrative staff and Group management, IT costs, as well as depreciation and impairment losses relating to intangible assets and property, plant and equipment used for administration of the Group. ## Operating profit before amortisation (EBITA) EBITA is defined as earnings before interest, taxes and amortisation, which is calculated as revenue minus cost of services, sales and marketing costs, administrative costs and special items. ## Amortisation Amortisation is the Group’s systematic allocation of cost of intangible assets over the life of the respective categories of intangible assets. ## Operating profit (EBIT) Operating profit (EBIT) is the Group’s earnings before interest and taxes, which is calculated as revenue minus cost of services, sales and marketing costs, administrative costs and special items. ## Financial income and expenses Financial income and expenses include interest income and expenses, currency gains and losses and tax surcharge and tax relief under the Danish Tax Prepayment Scheme. ## Special items This item includes non-recurring costs or income, which cannot be directly attributed to the Group’s ordinary activities, including acquisition-related costs, transaction costs and Offering-related costs. ## Tax for the period/year Tax for the period/year consists of current tax for the year and changes in deferred tax. The tax rate in Denmark is 22% and it is expected that the Group will gradually realise an effective tax rate roughly equal to the statutory rate. The Group is also exposed to tax rates in Poland, Norway and in the UK. In 2017, the Group’s effective tax rate was 29.6%. 140 --- Comprehensive income Comprehensive income is defined as the statement of all Group income and expenses recognised over a given period of time. Non-IFRS Financial Measures and Other Key Performance Indicators In assessing the performance of the Group’s business, it considers a variety of financial and operating metrics, including certain financial measures which are not measures of financial performance under IFRS, as adopted by the European Union. Such measures may not be indicative of historical operating results, nor are such measures meant to be predictive of future results. The Group has presented these non-IFRS measures in this Offering Circular because it considers them an important supplemental measure of its performance and believes that they are widely used by investors in comparing performance between companies. However, not all companies may calculate the non-IFRS financial measures in the same manner or on a consistent basis and, as a result, the presentation thereof may not be comparable to measures used by other companies under the same or similar names. Accordingly, undue reliance should not be placed on the non-IFRS financial measures contained in this Offering Circular and they should not be considered as a substitute for revenue, and EBIT or other financial measures computed in accordance with IFRS, as adopted by the European Union. For a description of non-IFRS measures discussed in this section, see “Presentation of Financial and Certain Other Information—Non-IFRS Financial Measures”. Organic revenue/organic revenue growth (non-IFRS) In order to analyse underlying trends in financial performance excluding the effects of acquired businesses, the Group measures organic revenue and organic revenue growth. Organic revenue is defined as revenue from any entity that the Group has owned for the preceding 12 month period and where the revenue from that entity has been fully consolidated in the Group’s results over the full 12 month period. Organic revenue is calculated in local currencies excluding any impact from currency exchange rate fluctuations. See “—Key Factors Affecting the Group’s Results of Operations—Acquisitions” below for a discussion of the Group’s acquisitions during the three years ended 31 December 2017, 2016 and 2015 for which adjustments have been made to arrive at the organic revenue figures included herein. Organic revenue growth represents the percentage change in the Group’s organic revenue as compared to total revenue from the prior period to the current period. In order to calculate organic revenue growth (i) for the three years ended 31 December 2017, 2016 and 2015, the Group applies a constant currency adjustment based on the average exchange rates for the prior year³ and (ii) for the three months ended 31 March 2018 and 2017, the Group applies a constant currency adjustment based on the average exchange rates for the three months ended 31 March for the prior year.⁴ The table below presents adjustments made to the Group’s reported revenue in order to arrive at organic revenue and organic revenue growth on a Group basis for the three months ended 31 March 2018 and 2017: \| \| 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million (unless otherwise indicated) \| \| \| Revenue \| 517.0 \| 332.9 \| \| Impact of constant currency adjustments \| 3.2 \| — \| \| Impact of acquisitions \| (77.1) \| (35.1) \| \| Organic Revenue (non-IFRS) \| 443.2 \| 297.8 \| \| Organic Revenue Growth (non-IFRS) \| 33.1% \| 45.3% \| ³ Average exchange rates during the year ended 31 December 2017 were DKK 79.60 and DKK 839.02 per 100 units of NOK and GBP, respectively. Average exchange rates during the year ended 31 December 2016 were DKK 82.41 per 100 units of NOK. ⁴ Average exchange rates during the three months ended 31 March 2018 were DKK 77.02 and DKK 841.02 per 100 units of NOK, and GBP, respectively. Average exchange rates during the three months ended 31 March 2017 were DKK 82.78 per 100 units of NOK. 141 --- The table below presents adjustments made to the Group's reported revenue to arrive at organic revenue and organic revenue growth on a segment basis for the three months ended 31 March 2018 and 2017: \| \| 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million (unless otherwise indicated) \| \| \| Public sector \| \| \| \| Revenue \| 285.8 \| 152.6 \| \| Impact of constant currency adjustments \| 1.8 \| 0.0 \| \| Impact of acquisitions \| (11.8) \| (11.4) \| \| Organic Revenue (non-IFRS) \| 275.8 \| 141.2 \| \| Organic Revenue Growth (non-IFRS) \| 80.7% \| 63.7% \| \| Private sector \| \| \| \| Revenue \| 231.2 \| 180.3 \| \| Impact of constant currency adjustments \| 1.4 \| 0.0 \| \| Impact of acquisitions \| (65.3) \| (23.7) \| \| Organic Revenue (non-IFRS) \| 167.4 \| 156.6 \| \| Organic Revenue Growth (non-IFRS) \| (7.2)% \| 31.9% \| The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth on a geographic basis for the three months ended 31 March 2018 and 2017: \| \| 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million (unless otherwise indicated) \| \| \| Denmark(1) \| \| \| \| Revenue \| 397.3 \| 297.8 \| \| Impact of constant currency adjustments \| — \| — \| \| Impact of acquisitions \| — \| — \| \| Organic Revenue (non-IFRS) \| 397.3 \| 297.8 \| \| Organic Revenue Growth (non-IFRS) \| 33.4% \| 45.3% \| \| Norway \| \| \| \| Revenue \| 42.6 \| 35.1 \| \| Impact of constant currency adjustments \| 3.2 \| — \| \| Impact of acquisitions \| — \| (35.1) \| \| Organic Revenue (non-IFRS) \| 45.8 \| — \| \| Organic Revenue Growth (non-IFRS) \| 30.6% \| — \| \| United Kingdom(2) \| \| \| \| Revenue \| 77.1 \| — \| \| Impact of constant currency adjustments \| — \| — \| \| Impact of acquisitions \| 77.1 \| — \| \| Organic Revenue (non-IFRS) \| — \| — \| \| Organic Revenue Growth (non-IFRS) \| — \| — \| (1) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s Danish projects including revenue generated from the Group’s sourcing center in Poland. (2) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s UK projects including revenue generated from the Group’s sourcing center in Vietnam. --- The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth for the Group for the years ended 31 December 2017, 2016 and 2015. Organic net revenue grew at a compound annual growth rate of 27.5% between 2015 and 2017. \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million (unless otherwise indicated) \| \| \| \| Revenue \| 1,416.1 \| 899.6 \| 758.1 \| \| Impact of constant currency adjustments \| 4.7 \| — \| — \| \| Impact of acquisitions \| (188.8) \| (11.7) \| — \| \| Organic Revenue (non-IFRS) \| 1,232.0 \| 887.9 \| 758.1 \| \| Organic Revenue Growth (non-IFRS) \| 37.0% \| 17.1% \| 20.5% \| The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth on a segment basis for the years ended 31 December 2017, 2016 and 2015: \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million (unless otherwise indicated) \| \| \| \| Public sector \| \| \| \| \| Revenue \| 730.2 \| 368.3 \| 311.5 \| \| Impact of constant currency adjustments \| 2.4 \| — \| — \| \| Impact of acquisitions \| (83.5) \| (2.8) \| — \| \| Organic Revenue (non-IFRS) \| 649.1 \| 365.6 \| 311.5 \| \| Organic Revenue Growth (non-IFRS) \| 76.2% \| 17.4% \| 16.8% \| \| Private sector \| \| \| \| \| Revenue \| 685.9 \| 531.3 \| 446.6 \| \| Impact of constant currency adjustments \| 2.3 \| — \| — \| \| Impact of acquisitions \| (105.2) \| (9.0) \| — \| \| Organic Revenue (non-IFRS) \| 583.0 \| 522.3 \| 446.6 \| \| Organic Revenue Growth (non-IFRS) \| 9.7% \| 16.9% \| 23.2% \| --- The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth on a geographic basis for the years ended 31 December 2017, 2016 and 2015: \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million (unless otherwise indicated) \| \| \| \| Denmark(1) \| \| \| \| \| Revenue \| 1,220.3 \| 887.9 \| 758.1 \| \| Impact of constant currency adjustments \| — \| — \| — \| \| Impact of acquisitions \| — \| — \| — \| \| Organic Revenue (non-IFRS) \| 1,220.3 \| 887.9 \| 758.1 \| \| Organic Revenue Growth (non-IFRS) \| 37.4% \| 17.1% \| 20.5% \| \| Norway \| \| \| \| \| Revenue \| 133.9 \| 11.7 \| — \| \| Impact of constant currency adjustments \| (4.7) \| — \| — \| \| Impact of acquisitions \| (126.9) \| (11.7) \| — \| \| Organic Revenue (non-IFRS) \| 11.7 \| — \| — \| \| Organic Revenue Growth (non-IFRS) \| 0.0% \| — \| — \| \| United Kingdom(2) \| \| \| \| \| Revenue \| 61.9 \| — \| — \| \| Impact of constant currency adjustments \| 0.0 \| — \| — \| \| Impact of acquisitions \| (61.9) \| — \| — \| \| Organic Revenue (non-IFRS) \| — \| — \| — \| \| Organic Revenue Growth (non-IFRS) \| — \| — \| — \| (1) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (2) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. ## EBITA (non-IFRS) EBITA is defined as revenue minus cost of services, sales and marketing costs, administrative costs and special items. The following table provides a reconciliation of the Group's EBITA to EBIT: \| \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million, unless otherwise indicated \| \| \| \| \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| Amortisation \| (28.8) \| (23.9) \| (95.9) \| (73.8) \| — \| \| EBITA (non-IFRS) \| 120.1 \| 95.7 \| 369.0 \| 212.9 \| 207.4 \| \| EBITA margin \| 23.2% \| 28.7% \| 26.1% \| 23.7% \| 27.4% \| ## Adjusted EBITA (non-IFRS) Adjusted EBITA is defined as EBITA adjusted for special items. Adjusted EBITA is a non-IFRS measurement that management considers to be a useful measure of monitoring the underlying performance of the Group, excluding special items which are non-recurring in nature. --- The following table provides a reconciliation of the Group's Adjusted EBITA to EBIT: \| \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million, unless otherwise indicated \| \| \| \| \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| Amortisation \| (28.8) \| (23.9) \| (95.9) \| (73.8) \| — \| \| EBITA (non-IFRS) \| 120.1 \| 95.7 \| 369.0 \| 212.9 \| 207.4 \| \| Acquisition-related costs(1) \| (1.0) \| — \| (13.7) \| (5.7) \| — \| \| Transaction costs(2) \| — \| — \| (1.7) \| (29.4) \| — \| \| Offering-related costs(3) \| (6.7) \| — \| (17.5) \| — \| — \| \| Adjusted EBITA (non-IFRS) \| 127.8 \| 95.7 \| 402.0 \| 248.0 \| 207.4 \| \| Adjusted EBITA margin \| 24.7% \| 28.8% \| 28.4% \| 27.6% \| 27.4% \| (1) Acquisition-related costs comprise costs related to external advisors, including strategy consultants, banks, legal and tax advisors, relating to acquisitions including contemplated acquisitions that were aborted. (2) Transaction costs comprise various fees incurred in connection with the transaction in February 2016, where the Significant Shareholders acquired a majority stake in the Group. (3) Offering-related costs comprise costs related to external advisors, including strategy and transactional services consultants and legal advisors incurred in connection with the Offering. ## Utilisation The Group measures the efficiency of its utilisation of the Group's customer facing FTE capacity by assessing a utilisation metric that is designed to help the Group track whether it has the right number of FTEs and whether its FTEs are working in an efficient manner. The efficient deployment of the Group's FTEs on its projects is influenced by the overall level of demand for its IT services; its ability to efficiently transition FTEs from completed projects to new assignments; its ability to hire and train new FTEs; its ability to accurately forecast demand for its IT services and thereby maintain an appropriate FTE headcount in each of its geographies and workforces; and its ability to effectively manage FTE turnover. Utilisation represents the percentage of a standard working hour that a consultant spends on customer-related work, based on an average work week of 40 hours per FTE in all geographies other than Norway, where the calculation is based on an average work week of 37.5 hours per FTE. The following table sets forth the Group's FTE utilisation for the periods indicated: \| \| For the three months ended 31 March \| \| For the year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Utilisation \| 88.2% \| 87.3% \| 87.6% \| 86.2% \| 87.9% \| ## Customer-facing FTEs and total FTEs The Group measures the number of customer-facing FTEs and the total number of FTEs at year-end. Customer-facing FTEs are those employees and freelancers whose role involves direct customer interaction and engagement and is a key metric for the delivery capacity of the Group. The number of non-customer-facing FTEs is assessed to evaluate efficiency of the administrative functions of the Group when benchmarking against other leading companies. The following table sets forth the Group's customer-facing FTEs, non-customer-facing FTEs and total FTEs at year-end for the periods indicated: \| \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Customer-facing FTEs(1) \| 1,613 \| 952 \| 1,534 \| 869 \| 631 \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Non-customer facing FTEs \| 105 \| 44 \| 93 \| 40 \| 29 \| \| Total FTEs(2) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. Rounded to the nearest whole number. (2) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. --- 146 # Revenue visibility The Group measures revenue visibility on a 12-month basis, based on two main input parameters: (1) the total estimated value of contractually committed engagements, which comprise fixed price agreements and service agreements and (2) total estimated value of planned continued engagements, which comprise ongoing time and material engagements which the Group believes have a high likelihood of conversion and/or prolongation. The Public sector segment has a high degree of visibility from already won tenders and is typically driven by multi-year fixed price tender contracts with a significant share of maintenance and operations revenue. In contrast, Private sector contracts typically have a duration of approximately 12 to 18 months and larger share of time and material engagements reflecting a fundamental difference in the purchasing pattern for Private sector segment customers compared to Public sector segment customers. Private customers tend to renew their contractual engagements with the Group and a higher proportion of revenue will therefore by definition be maintenance-based, which is also different from the dynamics in the Public sector segment. The following table sets forth revenue visibility of contractually committed and planned continued engagements on a segment basis for the periods indicated. \| \| For the year ending 31 December \| \| --- \| --- \| \| \| 2018^{(1)} \| \| \| DKK million \| \| Public sector \| \| \| Revenue visibility on contractually committed engagements \| 128 \| \| Revenue visibility on planned continued engagements \| 447 \| \| Private sector \| \| \| Revenue visibility on contractually committed engagements \| 62 \| \| Revenue visibility on planned continued engagements \| 307 \| \| Total revenue visibility (Public and Private sector) on contractually committed engagements \| 190 \| \| Total revenue visibility (Public and Private sector) on planned continued engagements \| 754 \| (1) The Group did not record and monitor revenue visibility prior to 31 December 2017. As a result, it does not have value of revenue visibility figures for the years ended 31 December 2016 and 2015. The information on revenue visibility constitutes forward-looking statements. Forward-looking statements are not guarantees of future financial performance and the Group's actual future revenues could differ materially from that expressed or implied by such forward-looking statements as a result of many factors, including those described under "Special Notice Regarding Forward-Looking Statements" and "Risk Factors—The Group's revenue visibility is subject to certain assumptions and estimates and expected revenue may not be realised in full." # Key Factors Affecting the Group's Results of Operations The Group's results of operations, financial position and liquidity have been affected in the years under review, and are expected to continue to be affected, by certain principal factors and development relating to its business, including, in particular: general economic conditions; trends within the IT industry; acquisitions; ability to win and renew large Public sector segment contracts; diversification of customer base; margins; contract pricing; cost of services, efficiency and utilisation; quarterly development and exchange rates. Other than the factors described in this section “—Key Factors Affecting the Group’s Results of Operations”, the Group does not consider any governmental, economic, fiscal, tax, monetary or political policy or factor individually to have had a material effect, directly or indirectly, on its operations in the years under review. See “Risk Factors” for information regarding any governmental, economic, fiscal, tax, monetary or political policies or factors that could materially affect, directly or indirectly, the Group’s operations in the future. # General economic conditions The level of IT spending by the Group's existing and potential customers is influenced by general economic conditions in the countries in which the Group operates. As many of the Group's customers, particularly its large --- customers, are Northern European companies, economic conditions in Northern Europe may affect the demand for the Group's solutions and services and the pricing it is able to agree on in respect of its contracts. Volatile, negative or uncertain economic conditions in the Group's customers' markets have in the past undermined, and could in the future undermine, business confidence and cause customers to reduce or defer their spending on new initiatives and technologies, or may result in customers reducing, delaying or eliminating spending under existing contracts or putting pressure on pricing. In Denmark, Norway and the UK, there are large addressable IT services markets that provide the Group with the opportunity to continue to increase its market share. See "Industry" for further details. These markets, and Denmark in particular, are significant markets for the Group's customers and, accordingly, economic conditions in each of these countries are particularly important to the Group's business. As a service provider to Public sector customers, the Group is also impacted by financial, budgetary, regulatory or political constraints, or changes in government policy and public spending constraints which could have a significant impact on the size, scope, timing and duration of contracts and orders placed by them and, therefore, on the level of business which the Group will derive from such customers. In addition, the Group's customers continue their focus on cost effectiveness, implying price pressure on suppliers such as the Group. Accordingly, going forward, the Group expects increased competition especially from offshore-based vendors, who position themselves on a mix of competitive prices through leveraging a global delivery model and a high willingness to invest in the customer. Through its acquisition of Hunter Macdonald Ltd, the Group now has a sourcing platform in Vietnam that it intends to use increasingly going forward in order to remain competitive. While the Group's customers continue to focus on cost effectiveness generally, the tender process in the Public sector segment has evolved over the last five years, with increased weight being given to the bidding IT service provider's quality of service and execution track record when awarding tenders and less focus on quoted price as the main determinant. ## Trends within the IT industry Trends within the IT industry can affect the overall level of demand for IT services and, accordingly, have an effect on the Group's sales. As technology has developed and become more sophisticated, there has been an increasing desire to incorporate IT within almost all business processes within all industries and this has increased demand for the types of services and solutions the Group offers. The Group expects that new technologies and new applications of existing technologies will continue to be developed and support the continued demand for IT services. Customer focus within the IT services market is shifting from mainframe systems to next-generation systems, following the development and fast adoption of new technologies and need to integrate these systems with new digital offerings. This shift is moving project focus from enhancing or maintaining large, monolithic systems and inflexible data assets, to smaller and flexible architecture for seamless experiences and advanced analytics. In "Old World IT", spending was concentrated on performing business activities more efficiently, with projects characterised by long lead times, rigid scope of work, and extended release cycles. In "New world IT", attention is shifting to more agile and flexible ways of working, which deliver complex functionality faster to market. Cyber security and integrity of data storage are a particular focus for many businesses as a result of increased reliance on electronic storage of information, e-commerce and risk of hacking. Relatedly, the location of the storage of customer data is also a focus area for many customers and the Group's data centres being located in Denmark is attractive to many of its customers, who prefer their data to be stored in Europe, rather than Asia. Increasing reliance on preferred partners to deliver technology capabilities allows the Group to reduce its fixed costs and replace them with variable costs based on actual IT requirements, which are easier to scale up or down and allows the Group to compete for more work. 147 --- # Acquisitions The Group has historically driven growth through a combination of organic growth, and in recent years selectively pursuing acquisitions. The Group may look to use acquisitions as a way to further expand or enhance the range of services that it offers as well as its technological capabilities, and to improve its presence in strategic Northern European geographies. Since 2016, the Group has completed two significant acquisitions. The following table presents a list of the acquisitions, including the percentage of current ownership, the closing date and strategic rationale for the acquisition: \| Acquisition \| Current Ownership \| Closing Date \| Consideration paid \| Strategic Rationale \| \| --- \| --- \| --- \| --- \| --- \| \| Hunter Macdonald Ltd . . . \| 100% \| 25 October 2017 \| Aggregate consideration of GBP 40.3 million (DKK 345.9 million) \| Gain entry into the United Kingdom, which is an attractive market for the Group given its large size and developed market for IT services. Appealing target for the Group given its complementary cyber security offering and sourcing platform in Vietnam \| \| Mesan AS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \| 100% \| 22 November 2016 \| Aggregate consideration of NOK 205.8 million (DKK 195.6 million) \| Gain entry into Norway, which is an attractive market for the Group given its similar characteristics to the Danish market and high digitalisation \| # Ability to win and renew large Public sector segment contracts The Group is dependent on its ability to continue to win tendered and re-tendered Public sector contracts over time. In the recent past, the Group has had a strong track record of won tenders and re-tenders. In 2013, the Group decided to invest in the Public sector segment and dedicated a team of around 30 employees to understand the dynamics of the segment, including the requirements related to responding to public tenders. At the same time, the Group invested in setting up operations to enable it to maintain and operate the bidding systems used in the tender process with large public entities. Largely as a result of these investments, the Group's win rate in Danish public tenders (including new tenders and re-tenders of ongoing contracts) in which it participated was $44\%$ , $72\%$ and $87\%$ calculated as total value of contracts won as a percentage of total potential value of contracts tendered for, in each of the year's ended 31 December 2015, 2016 and 2017, respectively (Source: EU Tender Database (Tenders Electronic Daily) and Group data). The large amount of contracts won resulted in Group revenue in the Public sector segment increasing by $18.3\%$ from 2015 to 2016 and $98.2\%$ from 2016 to 2017 (of which $76.2\%$ of the increase in 2017 can be attributed to organic growth). The vast majority of the contracts tendered for, and won, in 2016 and 2017 are still in the development phase, while an increased number of projects will be completed during the course of 2018, and then move to the maintenance and operations phases. The Group's track record in delivering projects successfully has been pivotal to its recent success in winning large public tenders and the Group expects all tenders won under the various projects to be delivered on time, on budget and within scope. In addition, in 2016 and 2017 a total of four Public sector contracts were retendered. The Group successfully bid for these retenders and won all of the contracts for maintenance and operations renewals. # Diversification of customer base The focus of the Group's strategy in recent years has been to diversify its customer base by gaining new customers. The diversification of the Group's customer base has driven increases in the Group's revenue in the years under review. Part of the Group's strategy is to continue to gain new customers and further diversify its customer base. --- The Group is party to a relatively small number of significant contracts that are important contributors to its revenue and, accordingly, have significant customer concentration, as set forth in the following table. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| (%) \| \| \| \| \| \| Group revenue from five largest customers as a percentage of total revenue \| 37.8 \| 24.7 \| 33.3 \| 19.6 \| 24.5 \| \| Group revenue from ten largest customers as a percentage of total revenue \| 48.8 \| 34.5 \| 43.7 \| 33.1 \| 39.9 \| # Margins The following table sets forth the revenue, gross profit (at the Group level only) and Adjusted EBITA for the periods presented on a Group, operating segment and geographic (based on the ownership of projects) basis. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Group \| DKK million \| \| \| \| \| \| Total revenue \| 517.0 \| 332.9 \| 1,416.1 \| 899.6 \| 758.1 \| \| Gross profit(1) \| 198.2 \| 140.6 \| 612.7 \| 372.6 \| 311.3 \| \| Adjusted EBITA (non-IFRS)(2) \| 127.8 \| 95.7 \| 402.0 \| 248.0 \| 207.4 \| \| Sector \| \| \| \| \| \| \| Public sector revenue \| 285.8 \| 152.6 \| 730.2 \| 368.3 \| 311.5 \| \| Public sector Adjusted EBITA (non-IFRS)(2) \| 64.8 \| 32.8 \| 156.9 \| 81.0 \| 80.7 \| \| Private sector revenue \| 231.2 \| 180.3 \| 685.9 \| 531.3 \| 446.6 \| \| Private sector Adjusted EBITA (non-IFRS)(2) \| 63.0 \| 62.9 \| 245.1 \| 167.0 \| 126.7 \| \| Geography \| \| \| \| \| \| \| Denmark revenue(3) \| 397.3 \| 297.8 \| 1,220.3 \| 887.9 \| 758.1 \| \| Denmark Adjusted EBITA (non-IFRS)(2)(3) \| 111.5 \| 87.9 \| 358.8 \| 246.0 \| 207.4 \| \| Norway revenue \| 42.6 \| 35.1 \| 133.9 \| 11.7 \| — \| \| Norway Adjusted EBITA (non-IFRS)(2) \| 9.5 \| 7.8 \| 30.8 \| 2.0 \| — \| \| United Kingdom revenue(4) \| 77.1 \| — \| 61.9 \| — \| — \| \| United Kingdom Adjusted EBITA (non-IFRS)(2)(4) \| 6.8 \| — \| 12.4 \| — \| — \| (1) Gross profit is calculated as revenue minus cost of service. (2) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. (3) Includes the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (4) Includes the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. --- The following table sets forth the gross profit margin (at the Group level only), EBITA margin and Adjusted EBITA margin for the periods presented on a Group, operating segment and geographic (based on the ownership of projects) basis. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Group \| \| \| % \| \| \| \| Gross profit \| 38.3% \| 42.2% \| 43.3% \| 41.4% \| 41.1% \| \| EBITA (non-IFRS) \| 23.2% \| 28.7% \| 26.1% \| 23.7% \| 27.4% \| \| Adjusted EBITA (non-IFRS)(1) \| 24.7% \| 28.8% \| 28.4% \| 27.6% \| 27.4% \| \| Sector \| \| \| \| \| \| \| Public sector EBITA (non-IFRS) \| 21.2% \| 21.5% \| 18.8% \| 17.8% \| 25.9% \| \| Public sector Adjusted EBITA (non-IFRS)(1) \| 22.7% \| 21.5% \| 21.5% \| 22.0% \| 25.9% \| \| Private sector EBITA (non-IFRS) \| 25.8% \| 34.9% \| 33.8% \| 27.7% \| 28.4% \| \| Private sector Adjusted EBITA (non-IFRS)(1) \| 27.3% \| 34.9% \| 35.7% \| 31.4% \| 28.4% \| \| Geography \| \| \| \| \| \| \| Denmark EBITA (non-IFRS)(2) \| 26.7% \| 29.5% \| 27.0% \| 23.8% \| 27.4% \| \| Denmark Adjusted EBITA (non-IFRS)(1)(2) \| 28.1% \| 29.5% \| 29.4% \| 27.7% \| 27.4% \| \| Norway EBITA (non-IFRS) \| 21.0% \| 22.2% \| 20.7% \| 16.7% \| — \| \| Norway Adjusted EBITA (non-IFRS)(1) \| 22.2% \| 22.2% \| 23.0% \| 16.7% \| — \| \| United Kingdom EBITA (non-IFRS)(3) \| 6.7% \| — \| 20.0% \| — \| — \| \| United Kingdom Adjusted EBITA (non-IFRS)(1)(3) \| 8.8% \| — \| 20.0% \| — \| — \| (1) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. (2) Includes the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (3) Includes the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. Historically, the Group's margins in its maintenance and operations services have been higher than those in development. This is a result of the project dynamics that customers tend to favour a relatively lower initial investment in the development of a given IT solution or system. Often when IT systems go into the maintenance phase, the dynamics change and, particularly within the Public sector, the contract terms tend to shift towards a time and material basis rather than a fixed fee basis. In addition, a number of maintenance and operations-related tasks can typically be efficiently conducted in parallel as many projects will have some overlap in tasks to be performed compared with individual development projects. The Group's maintenance and operations business tend to be critical for the Group's customers' businesses. Accordingly, in case of, for example, budget cuts due to economic conditions, the Group's customers are more likely to defer or cancel discretionary, short-term development contracts over maintenance and operations contracts. Growth in the Group's revenue and margins is the result of increased activity in both the Public and Private sector segments. As noted above, in 2013 the Group decided to invest in the Public sector segment in order to drive increased market share in the segment, as many of the more complex and business-critical digitalisation projects to be undertaken were identified in this particular segment. During 2015 and 2016, the Group won a significant number of contracts in the Public sector segment. The vast majority of the Public sector contracts tendered for, and won, in 2016 and 2017 are still in the development phase. As those projects move to the maintenance and operations phase, margins are expected to be positively impacted in line with the overall margin profile of these projects discussed above. See "—Ability to win and renew large Public sector segment contracts" above. At the same time, in the Private sector segment the Group has increased its focus on larger customers with a strategic agenda, which has resulted in increased levels of activity involving a number of the Group's larger customers in this segment. As discussed further below, the Group has a high utilisation rate and this combined with a relatively low amount of significant rectification (or "clean up") work on large projects has historically been another key driver for the Group's sustained margins. See "—Cost of services, efficiency and utilisation" below. The Group's reported growth was also impacted by the acquisition of Mesan AS in Norway in 2016 and Hunter Macdonald Ltd in the UK in 2017. These two acquisitions impacted revenue growth by DKK 184.0 million from the year ended 31 December 2016 to the year ended 31 December 2017 and by DKK 11.7 million from the year ended 31 December 2015 to the year ended 31 December 2016. The acquisition of Mesan AS negatively impacted the Group's EBITA margin (non-IFRS) 0.1 percentage points in 2016 and 0.5 --- percentage points in 2017, respectively. In addition, the acquisition of Hunter Macdonald Ltd negatively impacted the Group's EBITA margin (non-IFRS) by 0.2 percentage points in 2017. During the years under review, the Group has been able to improve its EBITA margin (non-IFRS) and Adjusted EBITA margin (non-IFRS), which increased from 27.4% to 27.6% and from 27.6% to 28.4%, respectively from 2015 to 2016 and from 2016 to 2017. The margin improvement was due to the Group's revenue growth increasing relative to its cost of services (which include staff costs and expenses). In the three months ended 31 March 2018, Adjusted EBITA margin (non-IFRS) decreased to 24.7% from 28.8% in the three months ended 31 March 2017, as a result of full integration of Hunter Macdonald Ltd. The following table sets forth the cost of services sold, general and administration expenses and sales and marketing costs as a percentage of revenue for the years indicated. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| (% of revenue) \| \| \| \| \| \| Cost of services(1) \| 61.7 \| 57.8 \| 56.7 \| 58.6 \| 58.9 \| \| Administrative costs \| 13.1 \| 12.9 \| 14.2 \| 13.4 \| 13.2 \| \| Sales and marketing costs \| 0.5 \| 0.6 \| 0.7 \| 0.4 \| 0.5 \| \| Total operating expenses(2) \| 75.3 \| 71.2 \| 71.6 \| 72.4 \| 72.6 \| (1) For further details on cost of services, see “—Cost of services, efficiency and utilisation” below. (2) Total operating expenses equals cost of services, administrative costs and sales and marketing costs. The Group's administrative costs as a percentage of revenue over the periods under review have generally been increasing, primarily driven by an increase in recruitment costs driven by the higher intake of FTEs in 2016 and 2017 compared to 2015, the increase in Group office space over the same period and the implementation of a new ERP system in 2017. The Group's sales and marketing costs as a percentage of revenue over the periods under review have been increasing, principally as a result of an increase in sales and marketing costs incurred due to the acquisitions of Mesan AS and Hunter Macdonald Ltd. ## Contract pricing The Group's profitability is dependent on the bill rates it is able to recover from the sale of its services and solutions and the efficiency with which the Group can deliver its projects. The bill rates the Company is able to recover are affected by a number of factors, including: (1) its customers' perceptions of its ability to add value through its services and solutions; competition; (2) the introduction of new service and solution offerings by the Group or its competitors; (3) the Group's competitors' pricing policies; (4) its ability to accurately estimate, attain and sustain contract revenues, margins and cash flows over increasingly longer contract periods; (5) bid practices of customers and their use of third-party advisors; (6) the use by the Group's competitors and its customers of offshore resources to provide lower-cost service delivery capabilities; (7) the Group's ability to charge premium prices when justified by market demand or the type of service or solution; and (8) general economic and political conditions. Competition for major new contracts is intense and the Group is often required to compete on price. The Group's profitability is also dependent on its ability to effectively price and manage its fixed fee contracts. The pricing of fixed price contracts is complex and highly dependent on the Group's internal estimates, predictions and assumptions for the Group's projects and, in particular, the cost of providing the relevant IT services. These estimates, predictions and assumptions might be based on limited data and could turn out to be inaccurate. If the Group does not accurately estimate the scope of the Group's costs and timing for completing projects, its fixed price contracts could prove unprofitable for the Group or yield lower profit margins than anticipated. The Group applies "work in progress" accounting for its fixed fee contracts, pursuant to which the estimated work to complete the projects is updated on a monthly basis based on progress to date and any increase in the estimated completion time is adjusted for all individual fixed fee contracts. Any significant deviation in estimated completion time against the original scope and time effort will thus negatively impact profit margins as more resources will be required to complete the project, which was agreed at a fixed price. 151 --- # Cost of services, efficiency and utilisation As a professional services company, the Group’s employees’ expertise, dedication and innovation are critical to its ability to perform its contracts with its customers. Cost of services are the Group’s largest cost and, accordingly, have a significant influence on its profitability. The following table sets forth components of the Group’s cost of services as a percentage of total Group revenue for the periods presented. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million (unless otherwise indicated) \| \| \| \| \| \| Total revenue \| 517.0 \| 332.9 \| 1,416.1 \| 899.6 \| 758.1 \| \| Cost of services \| 318.8 \| 192.3 \| 803.4 \| 527.0 \| 446.8 \| \| Staff costs \| 213.5 \| 158.5 \| 624.1 \| 438.5 \| 376.5 \| \| Project costs(1) \| 105.3 \| 33.8 \| 179.3 \| 88.5 \| 70.3 \| \| Total cost of services(2) \| 318.8 \| 192.3 \| 803.4 \| 527.0 \| 446.8 \| \| As a percentage of revenue \| 61.7% \| 57.8% \| 56.7% \| 58.6% \| 58.9% \| (1) Project costs include indirect employee costs such as travel, entertainment, fees to subcontractors/freelancers and consumables on customer projects. (2) Total cost of services are computed on the basis of wages, salaries and pensions that relate to the amount of time consultants spend on customer projects and business development. In the three months ended 31 March 2018, the Group experienced higher total cost of services, principally as a result of the Group employing more FTEs during the three months ended 31 March 2018 compared to the three months ended 31 March 2017. Cost of services as a percentage of total revenue were higher at 61.7% in the three months ended 31 March 2018, compared to 57.8% in three months ended 31 March 2017. This development was principally due to the Group’s UK operations, which have a significantly higher share of costs due the use of long-term subcontractors which are more expensive compared to the Group’s permanent employees in other jurisdictions. This diluted the Group’s gross profit margin by 3.9 percentage points in the three months ended 31 March 2018 compared to three months ended 31 March 2017. In 2017, the Group experienced higher total cost of services, as a result of employing more FTEs during 2017 compared to 2016 enabling the Group to increase its revenue. Cost of services as a percentage of total revenue decreased by 1.9 percentage points from 58.6% in 2016 to 56.7% in 2017, principally driven by less FTE time spent on business development and other non-customer facing activity, an increase in utilisation, which increased from 86.2% in 2016 to 87.6% in 2017, as well as a slight increase in average hourly rate billed to customers, which is calculated as total revenue divided by billable hours (not including time spent on business development), compared to 2016. In 2016, the Group experienced higher cost of services, as a result of the increase in revenue driven by more FTEs. Cost of services as a percentage of total revenue decreased by 0.3 percentage points from 58.9% in 2015 to 58.6% in 2016, principally due to the average hourly rate billed to customers being higher in 2016 than in 2015. In 2015, the average hourly rate billed to customers was significantly negatively impacted by a single loss-making project which was initiated in 2014, related to the Group’s push to enter into the Danish trade union subsector of the Private sector segment. In 2016, the higher average hourly rate billed to customers was offset by more FTE time spent on business development and other non-customer facing activity compared to 2015, which increased cost of services per FTE as utilisation fell from 87.9% in 2015 to 86.2% in 2016. On balance, the higher average hourly rate billed to customers combined with lower utilisation increased revenue generated per FTE in 2016 compared to 2015 and also increased cost of services per FTE. 152 --- The Group's cost of services are a function of headcount, compensation paid and other customer project related costs as well as FTE time spent on business development. The following table sets forth the Group's FTEs by location on the dates presented. As at 11 May 2018 (the most recent practicable date prior to the date of this Offering Circular), the Group had 1,751 FTEs (excluding freelancers in Denmark and Norway). \| Region \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Denmark(1) \| 999 \| 763 \| 951 \| 707 \| 608 \| \| United Kingdom(2) \| 263 \| — \| 252 \| — \| — \| \| Poland \| 194 \| 121 \| 173 \| 91 \| 52 \| \| Norway(1) \| 141 \| 110 \| 141 \| 111 \| \| \| Vietnam \| 121 \| — \| 110 \| — \| — \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Total(3) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Does not include freelancers, as such personnel are not a prominent feature of the Danish or Norwegian IT services labour market. (2) Includes subcontractors, as such personnel are a prominent feature of the United Kingdom IT services labour market. (3) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. The following table sets forth the Group's customer-facing FTEs, non-customer-facing FTEs and total FTEs at year-end for the periods indicated. \| \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Customer facing FTEs(1) \| 1,613 \| 952 \| 1,534 \| 869 \| 631 \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Non-customer-facing FTEs \| 105 \| 44 \| 93 \| 40 \| 29 \| \| Total FTEs(2) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. Rounded to the nearest whole number. (2) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. The following table sets forth the breakdown of the Group's FTEs on a professional role level on the dates presented. \| Employees \| As at 31 March \| \| As at 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| Partners \| 28 \| 19 \| 30 \| 19 \| 15 \| \| Principals \| 48 \| 27 \| 48 \| 28 \| 22 \| \| Managers \| 211 \| 168 \| 235 \| 170 \| 134 \| \| Senior Consultants \| 450 \| 288 \| 437 \| 271 \| 198 \| \| Consultants \| 634 \| 416 \| 535 \| 353 \| 245 \| \| Administrative \| 105 \| 44 \| 93 \| 40 \| 29 \| \| Trainees \| 45 \| 33 \| 70 \| 29 \| 18 \| \| Freelancers in Denmark and Norway \| 83 \| 44 \| 78 \| 38 \| 8 \| \| Subcontractors \| 197 \| 0 \| 180 \| 0 \| 0 \| \| Total(1) \| 1,801 \| 1,039 \| 1,705 \| 947 \| 668 \| (1) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. In 2017, FTEs increased by 758 from 947 in 2016 to 1,705, driven by both high organic growth in Denmark and by the inclusion of 352 employees in the UK/Vietnam as a result of the acquisition of Hunter Macdonald Ltd. In 2016, FTEs increased by 279 from 668 in 2015 to 947, driven by the inclusion of additional employees in Norway as a result of the acquisition of Mesan AS. The Group seeks to size its headcount in accordance with demand from its current and anticipated future projects, and as needed to operate its business. Due to the Group's growth to date, it has not needed to engage in significant redundancies. However, if the Group would need to reduce its headcount in order to right-size its business, it would need to comply with labour regulations in the relevant jurisdictions, which may delay or make costly reducing its headcount. For example, in Denmark, the Group is able to make staff redundancies upon giving salaried employees between one and six months' notice of termination, depending on individual seniority. --- Should such redundancy be deemed unfair, the employees may be entitled to compensation of up to six months' salary, however, usually not exceeding two months' salary. In addition, salaried employees who have been employed for 12 years or more may be entitled to severance pay upon termination of one to three months' salary. Accordingly, in the event that the Group would have to reduce its headcount following a reduction in demand for its services, there may be a lag effect in how fast the Group could reduce its headcount compared to the loss of revenue and, as a result, the Group's costs and margins, would be impacted for that particular period. The Group measures the efficiency of its utilisation of the Group's customer facing FTE capacity by assessing a utilisation metric that is designed to help the Group track whether it has the right number of FTEs and whether its FTEs are working in an efficient manner. The efficient deployment of the Group's FTEs on its projects is influenced by the overall level of demand for its IT services; its ability to efficiently transition FTEs from completed projects to new assignments; its ability to hire and train new FTEs; its ability to accurately forecast demand for its IT services and thereby maintain an appropriate FTE headcount in each of its geographies and workforces; and its ability to effectively manage FTE turnover. Utilisation represents the percentage of a standard working hour that a consultant spends on customer-related work, based on an average work week of 40 hours per FTE in all geographies other than Norway, where the calculation is based on an average work week of 37.5 hours per FTE. From 2015 to 2017, the Group yielded overall utilisation of approximately 86% to 88%. In addition, in connection with the Offering and becoming a public company, the Group expects to incur additional costs relating to the addition or enhancement of functions such as treasury, investor relations, legal and compliance. In addition, as a public company, the Group expects to incur annual listing fees, ongoing Nasdaq Copenhagen and VP Securities fees as well as costs relating to its annual general meeting. The Group also expects to pay higher aggregate remuneration to its board members and expects to incur additional costs relating to its employee incentive programmes. For further information see "Board of Directors, Executive Management and Key Employees—Incentive Programmes". ## Quarterly development The Group's revenue and operating results have varied between quarters as a result of fluctuations in revenue and the continued hiring of new employees over the years under review. These fluctuations are a result of: (1) the nature, number, timing, scope and contractual terms of the projects in which the Group is engaged; (2) delays incurred in the performance of those projects; (3) the accuracy of estimates of resources and time required to complete ongoing projects; (4) holiday periods, in particular summer holidays; and (5) general economic conditions which will continue to impact the Group's revenue and which, in the future, may fluctuate from quarter to quarter. Factors that affect the Group's revenue or operating profit in a particular quarter may not recur in a subsequent quarter or in the same quarter in a subsequent year. The following table sets forth the Group's quarterly revenue and Adjusted EBITA (non-IFRS), respectively, for the periods indicated. \| \| Quarter ended \| \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 31 March 2018 \| 31 December 2017 \| 30 September 2017 \| 30 June 2017 \| 31 March 2017 \| \| \| DKK million \| \| \| \| \| \| Revenue \| 517.0 \| 443.4 \| 337.5 \| 302.3 \| 332.9 \| \| Adjusted EBITA (non-IFRS)(1) \| 127.8 \| 115.3 \| 117.0 \| 74.0 \| 95.7 \| (1) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. The following table sets forth the Group's quarterly revenue and Adjusted EBITA (non-IFRS) presented on a segment basis for the periods indicated. \| \| Quarter ended \| \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 31 March 2018 \| 31 December 2017 \| 30 September 2017 \| 30 June 2017 \| 31 March 2017 \| \| \| DKK million \| \| \| \| \| \| Public Sector \| \| \| \| \| \| \| Revenue \| 285.8 \| 244.6 \| 187.8 \| 145.2 \| 152.6 \| \| Adjusted EBITA (non-IFRS)(1) \| 64.8 \| 41.2 \| 57.0 \| 25.8 \| 32.8 \| \| Private Sector \| \| \| \| \| \| \| Revenue \| 231.2 \| 198.8 \| 149.7 \| 157.1 \| 180.3 \| \| Adjusted EBITA (non-IFRS)(1) \| 63.0 \| 74.1 \| 60.0 \| 48.1 \| 62.9 \| (1) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. --- The following table sets forth the Group's quarterly revenue and Adjusted EBITA (non-IFRS) on a geographic level for the periods indicated. \| \| Quarter ended \| \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 31 March 2018 \| 31 December 2017 \| 30 September 2017 \| 30 June 2017 \| 31 March 2017 \| \| \| DKK million \| \| \| \| \| \| Denmark(1) \| \| \| \| \| \| \| Revenue \| 397.3 \| 341.9 \| 306.5 \| 274.0 \| 297.8 \| \| Adjusted EBITA (non-IFRS)(2) \| 111.5 \| 92.8 \| 108.8 \| 69.3 \| 87.9 \| \| Norway \| \| \| \| \| \| \| Revenue \| 42.6 \| 39.6 \| 30.9 \| 28.3 \| 35.1 \| \| Adjusted EBITA (non-IFRS)(2) \| 9.5 \| 10.2 \| 8.1 \| 4.7 \| 7.8 \| \| United Kingdom(3) \| \| \| \| \| \| \| Revenue \| 77.1 \| 61.9 \| — \| — \| — \| \| Adjusted EBITA (non-IFRS)(1) \| 6.8 \| 12.4 \| — \| — \| — \| (1) Includes the revenue and Adjusted EBITA from the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (2) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. (3) Includes the revenue and Adjusted EBITA from the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. ## Exchange rates Fluctuations in foreign currency exchange rates affect the Group's results of operations. With operations across a number of countries, the Group is subject to the effects of foreign currency fluctuations. Exchange rate fluctuations impact the Group's income statement, balance sheet and cash flows as a result of the reporting currency used in preparing its financial statements being DKK, which is different from the functional currency of the Group's subsidiaries, its assets and liabilities being stated in different currencies and certain revenue and costs arising in different currencies. Although the Group reports its operating results in Danish kroner, a portion of the Group's revenue and expenses are denominated in currencies other than Danish kroner, including Euro, Norwegian kroner, British pound sterling, Polish zloty and Vietnamese dong. In 2017, 85.1%, 10.1% and 4.7% of the Group's costs of service, administration costs and sales and marketing costs were denominated in the Danish kroner, Norwegian kroner and British pound sterling, respectively. As a result, the Group's results of operations and financial position are impacted by the value of Danish kroner relative to such other currencies. The following table presents the percentage breakdown of the Group's revenue and EBITA by currency reflecting the reporting currency of the entity. \| \| Group \| \| \| \| \| \| \| \| \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| Three Months ended 31 March \| \| \| Year ended 31 December \| \| \| \| \| \| \| \| \| \| \| 2018 \| \| \| 2017(1) \| \| \| 2016(2) \| \| \| 2015(3) \| \| \| \| \| DKK \| NOK \| GBP \| DKK \| NOK \| GBP \| DKK \| NOK \| GBP \| DKK \| NOK \| GBP \| \| Revenue \| 76.8 \| 8.2 \| 14.9 \| 86.2 \| 9.5 \| 4.4 \| 98.7 \| 1.3 \| — \| 100.0 \| — \| — \| \| EBITA \| 88.3 \| 7.5 \| 4.3 \| 89.1 \| 7.5 \| 3.3 \| 99.1 \| 0.9 \| — \| 100.0 \| — \| — \| (1) The Group only had a portion of its revenue and expenses denominated in British pound sterling from 25 October 2017 onwards, the date when it acquired Hunter Macdonald Ltd. (2) The Group did not have any portion of its revenue or expenses denominated in British pound sterling during this period as this was prior to its acquisition of Hunter Macdonald Ltd and only had a portion of its revenue and expenses denominated in Norwegian kroner from 22 November 2016 onwards, the date when it acquired Mesan AS. (3) The Group did not have any portion of its revenue or expenses denominated in Norwegian kroner or British pound sterling during this period as this was prior to its acquisitions of Hunter Macdonald Ltd and Mesan AS. A change in the average DKK/NOK and DKK/GBP rates by 10% would have had an impact on the Group's revenue of DKK 13.4 million and DKK 6.2 million, respectively, for the year ended 31 December 2017 and on EBITA of DKK 2.8 million and DKK 1.2 million, respectively, for the year ended 31 December 2017. Hence, a hypothetical 10% change in NOK and GBP would have a total impact of DKK 4.0 million foreign currency translation on the Group's EBITA for full-year 2017. The Group has a EUR 148.4 million term loan facility which has been fully hedged through a currency swap to hedge currency risk. In addition, the Group has a DKK 197.2 million term loan facility which has not been hedged. As a result, any currency gains or losses in respect of the DKK/NOK exchange rate will impact the Group's financial items and thereby its EBT. --- The Group translates its foreign-denominated revenue and expenses into Danish kroner at average exchange rates of each reporting period, as required by IFRS. Accordingly, changes in the value of the Danish kroner against other currencies will affect the Group's reported revenue, expenses and results of operations. In particular, changes in exchange rates can affect the Group's margins as its revenue in any one currency is not matched by expenses in the same currency. As the Group continues to develop its multi-country setup, the Group expects that more of its expenses will be incurred in currencies other than those in which the Group bills for the related services. An increase in the value of the Polish zloty or Vietnamese dong against the Danish kroner could increase costs for delivery of services at sites that are used for sourcing purposes only by increasing labour and other costs that are denominated in local currency, without any offsetting increase in the amounts payable to the Group under its contracts with customers. Currency fluctuations will continue to impact the Group's operating profit as a result of the translation of non-Danish kroner revenue and expenses. During the periods under review the Group has applied a treasury policy whereby net currency exposures impacting EBITA within certain thresholds were hedged to eliminate large currency fluctuations. Up to the year ended 31 December 2017, the Group had no material net currency exposures. See also “—Disclosures About Market Risks—Foreign exchange risk”. ## Comparison of Results for the Group for the Three Months Ended 31 March 2018 and 31 March 2017 The following table presents the Group's combined results for the three months ended 31 March 2018 and 2017. \| \| Three Months ended 31 March \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2018 vs. 2017 \| \| \| DKK million \| \| \| \| Revenue \| 517.0 \| 332.9 \| 55.3% \| \| Cost of services \| (318.8) \| (192.3) \| 65.8% \| \| Gross profit \| 198.2 \| 140.6 \| 41.0% \| \| Sales and marketing costs \| (2.7) \| (2.0) \| 34.7% \| \| Administrative costs \| (67.7) \| (42.8) \| 58.0% \| \| Operating expenses \| (70.4) \| (44.8) \| 56.9% \| \| Special items \| (7.7) \| 0.0 \| N/A \| \| EBITA (non-IFRS) \| 120.1 \| 95.7 \| 25.5% \| \| Amortisation \| (28.8) \| (23.9) \| 20.9% \| \| EBIT \| 91.2 \| 71.8 \| 27.0% \| \| Net financials \| (24.7) \| (23.9) \| 3.5% \| \| EBT \| 66.5 \| 48.0 \| 38.7% \| \| Tax for the period \| (15.3) \| (12.1) \| 27.2% \| \| Profit/(loss) for the period \| 51.2 \| 35.9 \| 42.6% \| ## Revenue Revenue increased by DKK 184.1 million, or 55.3%, from DKK 332.9 million for the three months ended 31 March 2017 to DKK 517.0 million for the three months ended 31 March 2018, principally due to growth in revenue in Denmark and Norway as well as the acquisition of Hunter Macdonald Ltd. The organic growth for the three months ended 31 March 2018 was a result of significant Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. ## Revenue by operating segment Public sector segment revenue accounted for 55.3% and 45.8% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Private sector segment revenue accounted for 44.7% and 54.2% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Public sector segment revenue increased by DKK 133.2 million, or 87.3%, from DKK 152.6 million for the three months ended 31 March 2017 to DKK 285.8 million for the three months ended 31 March 2018. Organic revenue growth was 80.7%, primarily driven by Danish Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. Of the DKK 285.8 million in Public sector --- segment revenue for the three months ended 31 March 2018, DKK 11.8 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the three months ended 31 March 2017 would have been DKK 152.6 million. Private sector segment revenue increased by DKK 50.9 million, or 28.2%, from DKK 180.3 million for the three months ended 31 March 2017 to DKK 231.2 million for the three months ended 31 March 2018. Organic revenue growth decreased by 7.2%, largely attributable to the increased focus on the public sector segment which has required a large part of the Danish, Polish and Norwegian workforce to complete and deliver those projects. Of the DKK 231.2 million in Private sector segment revenue for the three months ended 31 March 2018, DKK 65.3 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the three months ended 31 March 2017 would have been DKK 180.3 million. ## Revenue by geography Denmark accounted for 76.8% and 89.5% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Norway accounted for 8.2% and 10.5% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Reflecting the first full period of consolidation of Hunter Macdonald Ltd, following the completion of the acquisition in October 2017, the United Kingdom accounted for 14.9% of total Group revenue for the three months ended 31 March 2018. ## Revenue by service Development revenue accounted for 43.2% and 42.2% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively, and maintenance and operations revenue accounted for 56.8% and 57.8% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Development revenue increased by DKK 82.5 million, or 58.7%, from DKK 140.6 million for the three months ended 31 March 2017 to DKK 223.2 million for the three months ended 31 March 2018, principally due to an increase in development revenue in the Group's Public sector segment, which increased by DKK 40.5 million as well as an increase in development revenue in the Group's Private sector segment, which increased by DKK 42.1 million. Maintenance and operations revenue increased by DKK 101.6 million, or 52.8%, from DKK 192.3 million for the three months ended 31 March 2017 to DKK 293.8 million for the three months ended 31 March 2018, principally due to an increase in the maintenance revenue in the Group's Public sector segment, which increased by DKK 92.7 million as well as an increase in maintenance revenue in the Group's Private sector segment, which increased by DKK 8.8 million. ## Cost of services Cost of services increased by DKK 126.5 million, or 65.8%, from DKK 192.3 million for the three months ended 31 March 2017 to DKK 318.8 million for the three months ended 31 March 2018, principally due to the Group significantly increasing its number of customer facing FTEs and use of subcontractors. \| \| Three Months ended 31 March \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2018 vs. 2017 \| \| \| DKK million \| \| \| \| Staff costs \| 213.5 \| 158.5 \| 34.7% \| \| Project costs \| 105.3 \| 33.8 \| 211.4% \| \| Total cost of services \| 318.8 \| 192.3 \| 65.8% \| ## Gross profit Gross profit increased by DKK 57.6 million, or 41.0%, from DKK 140.6 million for the three months ended 31 March 2017 to DKK 198.2 million for the three months ended 31 March 2018, principally due to increases in organic revenue and the increase in revenue generated due to the acquisition of Hunter Macdonald Ltd. Gross profit margin decreased from 42.2% for the three months ended 31 March 2017 to 38.3% for the three months ended 31 March 2018, primarily driven by the Group's UK operations, which have a significantly higher share of --- costs due the use of subcontractors which are more expensive compared to the Group's permanent employees in other jurisdictions. This diluted the Group's gross profit margin by 3.9 percentage points in the three months ended 31 March 2018 compared to three months ended 31 March 2017. ## Sales and marketing costs Sales and marketing costs increased by DKK 0.7 million, or 34.7%, from DKK 2.0 million for the three months ended 31 March 2017 to DKK 2.7 million for the three months ended 31 March 2018, principally due to the purchase of Netcompany UK and related to change in company name, website, merchandise and branding toward customers. ## Administrative costs Administrative costs increased by DKK 24.8 million, or 58.0%, from DKK 42.8 million for the three months ended 31 March 2017 to DKK 67.7 million for the three months ended 31 March 2018, principally due to an increase in lease costs relating to the expansion of the office space in Denmark to accommodate the Group's expanding workforce, as well as to the inclusion of office space in the UK relating to the acquisition of Hunter Macdonald Ltd. The increase in administrative costs was slightly offset by the economies of scale in office space relative to FTEs that the Group was able to achieve as it increased its number of FTEs and was able to fill more of the office space it had previously leased and by the rollout of the Group's new ERP-system to its operations in Norway and the UK. \| \| Three Months ended 31 March \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2018 vs. 2017 \| \| \| DKK million \| \| \| \| Staff costs \| 23.0 \| 13.2 \| 73.4% \| \| Other costs \| 44.7 \| 29.6 \| 51.1% \| \| Total administrative costs \| 67.7 \| 42.8 \| 58.0% \| ## Operating expenses Operating expenses increased by DKK 25.5 million, or 56.9%, from DKK 44.8 million for the three months ended 31 March 2017 to DKK 70.4 million for the three months ended 31 March 2018, principally due to the increase in administrative costs, which accounted for more than 95% of the Group's total operating expenses. ## Adjusted EBITA Adjusted EBITA increased by DKK 32.1 million, or 33.5%, from DKK 95.7 million for the three months ended 31 March 2017 to DKK 127.8 million for the three months ended 31 March 2018, principally due to the increase in revenue. Adjusted EBITA margin decreased from 28.8% for the three months ended 31 March 2017 to 24.7% for the three months ended 31 March 2018, principally due to higher costs in the United Kingdom attributable to the higher proportion of subcontractors used in the United Kingdom compared to Denmark and Norway. As a result, gross profit margin decreased from 42.2% for the three months ended 31 March 2017 to 38.3% for the three months ended 31 March 2018. ## Special items Special items increased from DKK nil for the three months ended 31 March 2017 to DKK 7.7 million for the three months ended 31 March 2018, of which DKK 1.0 million related to the strategic considerations regarding the future of the Group and DKK 6.7 million related the acquisition of Hunter Macdonald Ltd. ## EBITA EBITA increased by DKK 24.4 million, or 25.5%, from DKK 95.7 million for the three months ended 31 March 2017 to DKK 120.1 million for the three months ended 31 March 2018, principally due to the increase in gross profit. This resulted in a decrease in EBITA margin from 28.7% for the three months that ended 31 March 2017 to 23.2% for the three months that ended 31 March 2018, principally due to the decrease in gross profit margin and higher level of special items. 158 --- 159 # Amortisation Amortisation increased by DKK 5.0 million, or 20.9%, from DKK 23.9 million for the three months ended 31 March 2017 to DKK 28.8 million for the three months ended 31 March 2018, principally due to the acquisition of Hunter Macdonald Ltd (which impacted the Group’s reported numbers from 25 October 2017 onwards). # EBIT EBIT increased by DKK 19.4 million, or 27.0%, from DKK 71.8 million for the three months ended 31 March 2017 to DKK 91.2 million for the three months ended 31 March 2018, principally due to the continued high levels of activity in all of the Group’s business units. Costs associated with amortisation increased, principally due to the acquisition of Hunter Macdonald Ltd, as noted above. This led to a decrease in operating profit margin from 21.6% for the three months ended 31 March 2017 to 17.6% for the three months ended 31 March 2018, which was primarily driven by a decrease in EBITA margin, as Hunter Macdonald Ltd was fully included in the Group’s reported numbers for the three months ended 31 March 2018, as well as an increase in amortisation. # Net financials Net financial expenses increased by DKK 0.8 million, or 3.5%, from expenses of DKK 23.9 million for the three months ended 31 March 2017 to DKK 24.7 million for the three months ended 31 March 2018, principally due to the acquisition of Hunter Macdonald Ltd, which was partly financed by additional borrowings and bank guarantees, that were issued in accordance with formal tender requirements and secured against some of the Group’s large Danish Public sector tender wins. # EBT EBT increased by DKK 18.6 million, or 38.7%, from DKK 48.0 million for the three months ended 31 March 2017 to DKK 66.5 million for the three months ended 31 March 2018, principally due to the increase in FTE activity levels throughout the year that in turn generated an increase in Group revenue. # Tax for the period The Group’s effective tax rate decreased by 2.1 percentage points from 25.2% for the three months ended 31 March 2017 to 23.1% for the three months ended 31 March 2018, principally due to the optimisation of the Group’s debt structure to increase the limit in tax deductible interest compared to the prior period. # Profit/(loss) for the period Profit for the period increased by DKK 15.3 million, or 42.6%, from DKK 35.9 million for the three months ended 31 March 2017 to DKK 51.2 million for the three months ended 31 March 2018. --- 160 # Comparison of Results for the Group for the Years Ended 31 December 2017 and 31 December 2016 The following table presents the Group’s combined results for the years ended 31 December 2017 and 2016. \| \| Year ended 31 December \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016(1) \| 2017 vs. 2016 \| \| \| DKK million \| \| \| \| Revenue \| 1,416.1 \| 899.6 \| 57.4% \| \| Cost of services \| (803.4) \| (527.0) \| 52.4% \| \| Gross profit \| 612.7 \| 372.6 \| 64.4% \| \| Sales and marketing costs \| (9.7) \| (3.7) \| 160.6% \| \| Administrative costs \| (201.0) \| (120.9) \| 66.3% \| \| Operating expenses \| (210.7) \| (124.6) \| 69.1% \| \| Special items \| (32.9) \| (35.1) \| (6.3%) \| \| EBITA (non-IFRS) \| 369.0 \| 212.9 \| 73.3% \| \| Amortisation \| (95.9) \| (73.8) \| 29.9% \| \| EBIT \| 273.2 \| 139.1 \| 96.4% \| \| Net financials \| (72.2) \| (62.7) \| 15.1% \| \| EBT \| 201.0 \| 76.4 \| 163.1% \| \| Tax for the year \| (59.4) \| (43.6) \| 36.2% \| \| Profit/(loss) for the year \| 141.6 \| 32.8 \| 332.4% \| (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S which, in total, comprise the Group. ## Revenue Revenue increased by DKK 516.5 million, or 57.4%, from DKK 899.6 million in 2016 to DKK 1,416.1 million in 2017, principally due to organic growth in Denmark of DKK 332.4 million compared to DKK 129.8 million in 2016 and additional revenue of DKK 133.9 million and DKK 61.9 million generated due to the acquisitions of Mesan AS and Hunter Macdonald Ltd, respectively. The organic growth in 2017 was a result of significant Public sector tender wins in 2015 and 2016 that the Group worked on during 2017, along with wins of additional Public sector tenders in 2017, due to prospects brought into the Group following the acquisitions of Mesan AS and Hunter Macdonald Ltd from their respective dates of consolidation. ## Revenue by operating segment Public sector segment revenue accounted for 51.6% and 40.9% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Private sector segment revenue accounted for 48.4% and 59.1% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Public sector segment revenue increased by DKK 361.8 million, or 98.2%, from DKK 368.3 million for the year ended 31 December 2016 to DKK 730.2 million for the year ended 31 December 2017. Organic revenue growth was 76.2% and 17.4% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the large public tenders won by the Group in Denmark in 2016 and 2017. Of the DKK 730.2 million in Public sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the year ended 31 December 2017 would have been DKK 699.2 million. Private sector segment revenue increased by DKK 154.6 million, or 29.1%, from DKK 531.3 million for the year ended 31 December 2016 to DKK 685.9 million for the year ended 31 December 2017. Organic revenue growth was 9.7% and 16.9% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the renewal by several of the Group’s large Danish customers of their engagements, as well as by the Group winning new major customers during the periods. Of the DKK 685.9 million in Private sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the year ended 31 December 2017 would have been DKK 655.0 million. --- 161 # Revenue by geography Denmark accounted for 86.2% and 98.7% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Norway accounted for 9.5% and 1.3% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. The UK accounted for 4.4% and 0.0% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. # Revenue by service Development revenue accounted for 45.7% and 48.7% of total Group revenue for the years ended 31 December 2017 and 2016, respectively, and maintenance and operations revenue accounted for 54.3% and 51.3% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Development revenue increased by DKK 208.5 million, or 47.5%, from DKK 438.4 million for the year ended 31 December 2016 to DKK 646.9 million for the year ended 31 December 2017, principally due to the large public tenders the Group won during the periods. Maintenance and operations revenue increased by DKK 308.0 million, or 66.8%, from DKK 461.2 million for the year ended 31 December 2016 to DKK 769.2 million for the year ended 31 December 2017, principally due to several of the Group's Private sector engagements moving from the development to maintenance phase during 2017. # Cost of services Cost of services increased by DKK 276.4 million, or 52.4%, from DKK 527.0 million in 2016 to DKK 803.4 million in 2017, principally due to the increase in revenue during the periods which led the Group to significantly increase its number of client facing FTEs and use of freelancers. \| \| Year ended 31 December \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2017 vs. 2016 \| \| \| DKK million \| \| \| \| Staff costs \| 624.1 \| 438.5 \| 42.3% \| \| Project costs \| 179.3 \| 88.5 \| 102.6% \| \| Total cost of services \| 803.4 \| 527.0 \| 52.4% \| # Gross profit Gross profit increased by DKK 240.1 million, or 64.4%, from DKK 372.6 million in 2016 to DKK 612.7 million in 2017, principally due to the increase in revenue generated due to the acquisitions of Mesan AS and Hunter Macdonald Ltd. Gross profit margin increased from 41.4% in 2016 to 43.3% in 2017, primarily driven by lower business development costs as less hours were spent on responding to tender requests in 2017 compared with 2016. The increase in gross profit margin was diluted by 0.8 percentage points by the acquisition of Hunter Macdonald Ltd, as it had a significantly higher share of costs due to it hiring subcontractors which are more expensive compared to the Group's existing businesses which have a higher proportion of permanent employees rather than subcontractors. In addition, the acquisition of Mesan AS diluted the gross profit margin by 0.5 percentage points, primarily due to its lower utilisation rate compared to the Group average. # Sales and marketing costs Sales and marketing costs increased DKK 6.0 million, or 160.6%, from DKK 3.7 million in 2016 to DKK 9.7 million in 2017. The increase in sales and marketing costs was primarily driven by the purchases of Mesan AS and Hunter Macdonald Ltd, which led to increased sales and marketing costs in 2017, due to the changes in company names, websites, merchandise and branding towards customers. # Administrative costs Administrative costs increased DKK 80.1 million, or 66.3%, from DKK 120.9 million in 2016 to DKK 201.0 million in 2017. The increase was mainly driven by costs related to the implementation of a new corporate ERP-system, recruitment costs and an increase in lease costs relating to the expansion of office space in Denmark to accommodate the expanding workforce. The increase in administrative costs was slightly offset by the --- economies of scale in office space relative to FTEs that the Group was able to achieve as it increased its number of FTEs and was able to fill more of the office space it had previously leased and by the rollout of the Group's new ERP-system to its operations in Norway and the UK. \| \| Year ended 31 December \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2017 vs. 2016 \| \| \| DKK million \| \| \| \| Staff costs \| 65.0 \| 30.4 \| 114.2% \| \| Other \| 136.0 \| 90.5 \| 50.3% \| \| Total administrative costs \| 201.0 \| 120.9 \| 66.3% \| ## Operating expenses Operating expenses increased by DKK 86.1 million, or 69.1%, from DKK 124.6 million in 2016 to DKK 210.7 million in 2017, principally due to the increase in administrative costs which account for more than 95% of total operating expenses. ## Adjusted EBITA Adjusted EBITA increased by DKK 153.9 million, or 62.1%, from DKK 248.0 million in 2016 to DKK 402.0 million in 2017, principally due to the increased FTE activity level in 2017. Further, margins improved as a result of continued operational leverage in delivering projects. ## Special items Special items decreased by DKK 2.2 million, or 6.3%, from DKK 35.1 million in 2016 to DKK 32.9 million in 2017. In 2017, DKK 17.5 million of the Group's special items related to strategic considerations regarding the future of the Group and DKK 15.5 million related to mergers and acquisitions transaction costs, while in 2016, DKK 29.4 million of the Group's special items related to the transaction where the Significant Shareholders acquired a majority stake in the Group and DKK 5.7 million related to the purchase of Mesan AS. ## EBITA EBITA increased by DKK 156.2 million, or 73.3%, from DKK 212.9 million in 2016 to DKK 369.0 million in 2017. This resulted in an increase in EBITA margin from 23.7% in 2016 to 26.1% in 2017, which was primarily driven by the improved gross profit margin and lower level of special items. ## Amortisation Amortisation increased by DKK 22.1 million, or 29.9%, from DKK 73.8 million in 2016 to DKK 95.9 million in 2017, principally due to the acquisitions of Mesan AS, which only fully impacted Group amortisation in 2017, and Hunter Macdonald Ltd (which impacted the Group's reported numbers from 25 October 2017 onwards). ## EBIT EBIT increased by DKK 134.1 million, or 96.4%, from DKK 139.1 million in 2016 to DKK 273.2 million in 2017. This led to an increase in operating profit margin from 15.5% in 2016 to 19.3% in 2017, which was primarily driven by an increase in EBITA margin, as well as a relatively lower increase in amortisation compared to the Group's increased revenue. ## Net Financials Net financial expenses increased DKK 9.5 million, or 15.1%, from net financial expenses of DKK 62.7 million in 2016 to net financial expenses of DKK 72.2 million in 2017. The increase in net financial expenses was primarily driven by the financing of the Mesan AS acquisition, which only had full financial effect on the Group in 2017. In addition, the purchase of Hunter Macdonald Ltd in October 2017, which was partly financed by additional borrowings, contributed to the increase in financial expenses. ## EBT EBT increased by DKK 124.6 million, or 163.1%, from DKK 76.4 million in 2016 to DKK 201.0 million in 2017, principally due to increase in FTE activity level realised throughout the year. 162 --- 163 # Tax for the year The Group’s effective tax rate in 2017 was 29.6%, compared to 57.1% in 2016. The high tax rate in 2016 was due to limitations in the Group’s use of the interest deduction rules under Danish tax law following the transaction in February 2016, where the Significant Shareholders acquired a majority stake in the Group. In 2017, the Group was less impacted by the interest deduction limitation rules lowering the Group’s effective tax rate in that year. # Profit/(loss) for the year Profit for the year increased by DKK 108.9 million, or 332.4%, from DKK 32.8 million in 2016 to DKK 141.6 million in 2017. # Comparison of Results for the Group for the Years Ended 31 December 2016 and 31 December 2015 The following table presents the Group’s combined results for the years ended 31 December 2016 and 2015. \| \| Year ended 31 December \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2016(1) \| 2015 \| 2016 vs. 2015 \| \| \| DKK million \| \| \| \| Revenue \| 899.6 \| 758.1 \| 18.7% \| \| Cost of services \| (527.0) \| (446.8) \| 17.9% \| \| Gross profit \| 372.6 \| 311.3 \| 19.7% \| \| Sales and marketing costs \| (3.7) \| (3.8) \| (2.4)% \| \| Administrative costs \| (120.9) \| (100.1) \| 20.8% \| \| Operating expenses \| (124.6) \| (103.9) \| 19.9% \| \| Special items \| (35.1) \| — \| N/A \| \| EBITA \| 212.9 \| 207.4 \| 2.7% \| \| Amortisation \| (73.8) \| — \| N/A \| \| EBIT \| 139.1 \| 207.4 \| (32.9)% \| \| Net Financials \| (62.7) \| 0.2 \| (26,165.8)% \| \| EBT \| 76.4 \| 207.6 \| (63.2)% \| \| Tax for the year \| (43.6) \| (19.8) \| 120.1% \| \| Profit/(loss) for the year \| 32.8 \| 187.8 \| (82.6)% \| (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S which, in total, comprise the Group. # Revenue Revenue increased by DKK 141.5 million, or 18.7%, from DKK 758.1 million in 2015 to DKK 899.6 million in 2016, driven by the increase in revenue of DKK 56.9 million in the Public sector segment and an increase of DKK 84.6 million in the Private sector segment. # Revenue by operating segment Public sector segment revenue accounted for 40.9% and 41.1% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Private sector segment revenue accounted for 59.1% and 58.9% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Public sector segment revenue increased by DKK 56.9 million, or 18.3%, from DKK 311.5 million for the year ended 31 December 2015 to DKK 368.3 million for the year ended 31 December 2016. Organic revenue growth was 17.4% and 16.8% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 368.3 million in Public sector segment revenue for the year ended 31 December 2016, DKK 2.8 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Public sector segment revenue for the year ended 31 December 2016 would have been DKK 365.6 million. Private sector segment revenue increased by DKK 84.6 million, or 19.0%, from DKK 446.6 million for the year ended 31 December 2015 to DKK 531.3 million for the year ended 31 December 2016. Organic revenue --- growth was 16.9% and 23.2% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 531.3 million in Private sector segment revenue for the year ended 31 December 2016, DKK 9.0 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Private sector segment revenue for the year ended 31 December 2016 would have been DKK 522.3 million. ## Revenue by geography Denmark accounted for 98.7% and 100% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Norway accounted for 1.3% and 0% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. ## Revenue by service Development revenue accounted for 48.7% and 45.8% of total Group revenue for the years ended 31 December 2016 and 2015, respectively, and maintenance and operations revenue accounted for 51.3% and 54.2% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Development revenue increased by DKK 91.4 million, or 26.3%, from DKK 347.0 million for the year ended 31 December 2015 to DKK 438.4 million for the year ended 31 December 2016, principally due to the Group's large public tender wins in 2016. Maintenance revenue decreased by DKK 50.1 million, or 12.2%, from DKK 411.1 million for the year ended 31 December 2015 to DKK 461.2 million for the year ended 31 December 2016, principally due to the Group's large public tender wins in 2016 and as a consequence due to the additional employees being engaged in delivering these services. ## Cost of services Cost of services increased by DKK 80.2 million, or 17.9%, from DKK 446.8 million in 2015 to DKK 527.0 million in 2016, principally due to the higher FTE activity level which led to an increased number of FTEs. \| \| Year ended 31 December \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2016 \| 2015 \| 2016 vs. 2015 \| \| \| DKK million \| \| \| \| Staff costs \| 438.5 \| 376.5 \| 16.5% \| \| Project costs \| 88.5 \| 70.3 \| 25.8% \| \| Total cost of services \| 527.0 \| 446.8 \| 17.9% \| ## Gross profit Gross profit increased by DKK 61.4 million, or 19.7%, from DKK 311.3 million in 2015 to DKK 372.6 million in 2016, principally due to the relatively larger increase in revenue than the costs associated with generating this revenue. Gross profit margin increased from 41.1% in 2015 to 41.4% in 2016, primarily driven by higher average hourly rate, which was somewhat offset by more business development expenses in 2016. ## Sales and marketing costs Sales and marketing costs decreased by DKK 0.1 million, or 2.4%, from DKK 3.8 million in 2015 to DKK 3.7 million in 2016, primarily driven by a planned marketing event for 2016 that was ultimately postponed to 2017. 164 --- 165 # Administrative costs Administrative costs increased by DKK 20.8 million, or 20.8%, from DKK 100.1 million in 2015 to DKK 120.9 million in 2016, due to an increase of employees in human resources and finance functions to support the Group’s growth and to the increase in office space in Denmark to accommodate the increase in FTEs. \| \| Year ended 31 December \| \| % change \| \| --- \| --- \| --- \| --- \| \| \| 2016 \| 2015 \| 2016 vs. 2015 \| \| \| DKK million \| \| \| \| Staff costs \| 30.4 \| 23.4 \| 30.0% \| \| Other \| 90.5 \| 76.7 \| 18.0% \| \| Total administrative costs \| 120.9 \| 100.1 \| 20.8% \| # Special Items Special items amounted to DKK 35.1 million in 2016 and constituted costs related to the transaction where the Significant Shareholders acquired a majority stake in the Group, and the acquisition of Mesan AS. # EBITA EBITA increased by DKK 5.5 million, or 2.7%, from DKK 207.4 million in 2015 to DKK 212.9 million in 2016, which led to an EBITA margin decrease from 27.4% in 2015 to 23.7% in 2016, driven by the increase in special items. # Adjusted EBITA Adjusted EBITA increased by DKK 40.7 million, or 19.6%, from DKK 207.4 million in 2015 to DKK 248.0 million in 2016, due to the increase in gross profit margin and a lower increase in administration, sales and marketing costs relative to the increase in Group revenue. # Amortisation Amortisation amounted to DKK 73.8 million in 2016 as a result of the transaction where the Significant Shareholders acquired a majority stake in the Group, and due to the acquisition of Mesan AS. # EBIT EBIT decreased by DKK 68.3 million, or 32.9%, from DKK 207.4 million in 2015 to DKK 139.1 million in 2016, due to the increase in amortisation. # Net financials Net financial expenses increased DKK 62.9 million in 2016, from financial income of DKK 0.2 million in 2015 to financial expenses of DKK 62.7 million in 2016, primarily related to the transaction where the Significant Shareholders acquired a majority stake in the Group, and due to the acquisition of Mesan AS. # EBT EBT decreased by DKK 131.2 million, or 63.2%, from DKK 207.6 million in 2015 to DKK 76.4 million in 2016, principally due to an increase in EBIT and an increase in net financials. # Tax for the year The Group’s effective tax rate increased by 47.6 percentage points from 9.5% in 2015 to 57.1% in 2016, principally due to an increase in special items which were not tax deductible, as well as limitations in the Group’s use of the interest deduction rules under Danish tax law following the transaction in February 2016, where the Significant Shareholders acquired a majority stake in the Group. Further, the Group’s low effective tax rate in 2015 was principally due to its use of carry-forward losses relating to its purchase of Tieto Denmark A/S in 2013. # Profit/(loss) for the year Profit for the year decreased by DKK 155.0 million, or 82.6%, from DKK 187.8 million in 2015 to DKK 32.8 million in 2016. --- # Liquidity and Capital Resources ## Overview The Group finances both its short-term and long-term liquidity requirements principally from cash flow from operating activities, liquid funds and liquidity under its DKK 150 million credit facility and a DKK 400 million acquisition facility as described in “—Financing Arrangements and Commitments” below. The Group’s liquidity requirements previously related to funding its working capital requirements and the purchase of tangible assets, such as hardware for its data centre and servers for its projects. ## Working capital The Group defines working capital as its current assets minus its current liabilities. The most significant components of the Group’s working capital are trade payables and trade receivables, including work in progress. Trade payables comprise payables to the suppliers in relation to hired labour and materials, as well as employee-related costs and tax liabilities. The level of trade payables mainly relates to the payment terms of the Group’s suppliers, which are generally due 45 days after the receipt of satisfactory invoice. Trade receivables comprise payments due to the Group by its customers. The aging of the Group’s trade receivables and its days of sales outstanding as at 31 December 2017, 2016 and 2015 are shown in the table below. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| \| \| Not due at balance sheet date \| 197.5 \| 148.0 \| 314.9 \| 193.3 \| 123.8 \| \| Overdue between 1 and 30 days \| 80.6 \| 26.4 \| 75.0 \| 53.1 \| 40.8 \| \| Overdue between 31 and 60 days \| 13.9 \| 1.5 \| 22.5 \| 9.9 \| 6.3 \| \| Overdue with more than 61 days \| 26.7 \| 17.6 \| 33.0 \| 1.9 \| 9.4 \| \| Total trade receivables \| 318.7 \| 193.6 \| 445.4 \| 258.2 \| 180.3 \| \| Days of sales outstanding \| 56.3 \| 53.1 \| 114.8 \| 104.8 \| 86.8 \| The Group’s trade receivables balance has generally increased between 2015 and 31 March 2018 due to the increase in revenue over the period. The Group conducts individual assessments of bad debts. If this leads to an estimation that the Group will not be able to collect all outstanding payments, a provision for bad debt is made. The Group uses the days of sales outstanding ratio to track its ability to receive payment from customers after the sale of its services and solutions. In 2017, the Group’s free cash flow was DKK 307.3 million, compared with DKK 213.6 million in 2016. This equalled a cash-to-earnings ratio of 76.4% at 31 December 2017 (31 December 2016: 91.6%). This decrease in cash-to-earnings ratio was due to an increase in negative working capital changes, primarily driven by a lower increase in other payables relative to the increase in EBITDA for the period. In 2016, the Group’s free cash flow was DKK 213.6 million, compared with DKK 237.2 million in 2015. This equalled a cash-to-earnings ratio of 91.6% at 31 December 2016 (31 December 2015: 104.0%). The decrease in cash-to-earnings ratio was principally driven by an increase in negative working capital changes, primarily driven by a higher increase in trade receivables and work in progress relative to the increase in revenue for the period. The Group’s business has significant seasonality of cash generation, with cash in the second half of the year usually being higher, principally due to customer payments collections, and the first quarter usually being the time of the year in which the Group’s cash is lowest, due to the pay out of bonuses earned in the prior calendar year and the payment of dividends. The Group believes that the working capital available to it is, at the time of completion of the IPO Reorganisation, sufficient for its present requirements for the next twelve months following the date of this Offering Circular. The working capital of the Group and its need thereof is directly tied to completion of the Refinancing, which is subject to completion of the Offering. ## No Significant Change As of the date of this Offering Circular, there have been no significant changes to the Group’s financial condition and operating results since 31 March 2018. --- # Cash flow analysis The following table presents the primary components of the Group's cash flow for the years ended 31 December 2017, 2016 and 2015 and for the three months ended 31 March 2018 and 2017: \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016(2) \| 2015 \| \| \| DKK million \| \| \| \| \| \| EBIT \| 91.2 \| 71.8 \| 273.2 \| 139.1 \| 207.4 \| \| Depreciation and amortization \| 38.5 \| 27.7 \| 129.2 \| 94.2 \| 20.6 \| \| Working capital changes \| (35.0) \| (20.7) \| (95.0) \| (19.6) \| 9.1 \| \| Free cash flow(1) \| 94.7 \| 78.9 \| 307.3 \| 213.6 \| 237.2 \| \| Paid taxes \| (10.4) \| (19.4) \| (35.4) \| (34.0) \| (20.6) \| \| Net financials \| (13.3) \| (15.6) \| (76.6) \| (62.7) \| 0.2 \| \| Cash flows from operating activities \| 71.1 \| 43.8 \| 195.3 \| 116.9 \| 216.8 \| \| Net cash outflow on acquisition of subsidiaries \| — \| 0.0 \| (120.3) \| (2,516.1) \| 0.0 \| \| Acquisition of intangible assets \| — \| 0.0 \| (11.1) \| (9.2) \| (5.9) \| \| Acquisition of property, plant and equipment \| (3.5) \| (4.9) \| (16.7) \| (13.0) \| (3.0) \| \| Other receivables (deposits) \| (1.1) \| 0.0 \| (2.3) \| (1.5) \| (0.6) \| \| Cash flows from investing activities \| (4.6) \| (4.9) \| (150.5) \| (2,539.7) \| (9.6) \| \| Dividends \| — \| 0.0 \| 0.0 \| (116.4) \| (100.0) \| \| Proceeds from issue of share capital \| 6.9 \| 3.9 \| 16.7 \| 1,265.1 \| 0.0 \| \| Proceeds from borrowings \| — \| 0.0 \| 92.0 \| 1,178.0 \| 0.0 \| \| Repayment of borrowing \| (114.7) \| (3.9) \| (16.6) \| (11.0) \| (8.6) \| \| Cash flows from financing activities \| (107.7) \| 0.0 \| 92.2 \| 2,315.7 \| (108.6) \| \| Net cash flow \| (41.2) \| 38.9 \| 137.0 \| (107.0) \| 98.6 \| \| Cash and cash equivalents at beginning of period \| 194.5 \| 32.0 \| 32.0 \| 111.5 \| 12.9 \| \| Cash and cash equivalents balances acquired \| — \| 0.0 \| 26.3 \| 27.6 \| 0.0 \| \| Effect of exchange rate changes on the balance cash held in foreign currencies \| 1.0 \| (0.2) \| (0.8) \| (0.1) \| 0.0 \| \| Cash and cash equivalents at end of period \| 154.2 \| 70.7 \| 194.5 \| 32.0 \| 111.5 \| (1) Free cash flow is defined as cash flow from operating activities less cash flow from paid taxes, net financials and investing activities. (2) Cash flow during the period was impacted due to the Significant Shareholders acquiring a majority stake in the Group in February 2016 and a subsequent capital increase of DKK 1.3 billion. To allow for meaningful comparison between the full-year numbers, the cash flow for the year ended 31 December 2016 shows the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S which, in total, comprise the Group. # Cash flow from operating activities Cash flow from operating activities was DKK 71.1 million in the first quarter of 2018, DKK 27.2 million, or 62.1%, higher than the Group's cash flow from operating activities of DKK 43.8 million in the first quarter of 2017. This increase was principally due to an increase in EBITA as well as positive changes in net working capital. Cash flow from operating activities was DKK 195.3 million in 2017, DKK 78.4 million, or 67.1%, higher than the Group's cash flow from operating activities of DKK 116.9 million in 2016. This increase was principally due to the increase in free cash flow. Cash flow from operating activities was DKK 116.9 million in 2016, DKK 99.9 million, or 46.1%, lower than the Group's cash flow from operating activities of DKK 216.8 million in 2015. This decrease was principally due to the decrease in free cash flow and an increase in financing expenses in 2016 compared to 2015, as the Group did not have any debt in 2015. # Cash flow from investing activities Cash used in investing activities was DKK 4.6 million in the first quarter of 2018, DKK 0.3 million, or 7.0%, lower than the Group's cash used in investing activities of DKK 4.9 million in the first quarter of 2017. This decrease was principally due to a lower amount of investment in office space relating to the Group's Danish offices. --- Cash used in investing activities was DKK 150.5 million in 2017, DKK 2,389.2 million lower than the Group's cash used in investing activities of DKK 2,539.7 million in 2016. This decrease was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016. Investing activities in 2017 were primarily related to the acquisition of Hunter Macdonald Ltd. Cash used in investing activities was DKK 2,539.7 million in 2016, DKK 2,530.1 million higher than the Group's cash used in investing activities of DKK 9.6 million in 2015. This increase was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016. ## Cash flow from financing activities Cash used in financing activities was DKK 107.7 million in the first quarter of 2018, DKK 107.7 million higher than the Group's cash flow from financing activities of DKK 0.0 million in the first quarter of 2017. This increase was principally due to the repayment of debt of DKK 114.7 million during the first quarter of 2018. Cash flow from financing activities was DKK 92.2 million in 2017, DKK 2,223.6 million lower than the Group's cash flow from financing activities of DKK 2,315.7 million in 2016. This increase was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016, while 2017 was impacted by the Group acquiring the shares in Hunter Macdonald Ltd. Cash flow from financing activities was DKK 2,315.7 million in 2016, DKK 2,424.4 million higher than the Group's cash used in financing activities of DKK (108.6) million in 2015. This increase was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016, while 2015 was impacted by the payment of a dividend to shareholders. ## Financing Arrangements and Commitments ### Description of the New Facilities Concurrently with the Offering, the Group will refinance certain of its existing indebtedness using a combination of the following facilities (the "New Facilities"): (i) a DKK 750 million term ("Term Loan Facility") facility with a final maturity date of five years after the date of first utilisation of the Term Loan Facility (the "Closing Date"); and (ii) a DKK 750 million multicurrency revolving credit facility with a final maturity date of five years after the Closing Date, which may be utilised in DKK, EUR, GBP, NOK, PLN, SEK and any other currency readily available and freely convertible into DKK and approved by the relevant lenders (the "Revolving Facility") (the "Refinancing"). The New Facilities include an option (the "Accordion Option") for the Group to request (on more than one occasion) that the lenders establish new term loan facilities by up to DKK 400 million in total. The New Facilities are provided for pursuant to a facilities agreement (the "New Facilities Agreement") entered into on 7 May 2018, by inter alios the Company, NC TopCo A/S, NC NewCo A/S, Netcompany Holding I A/S and Netcompany A/S and Danske Bank A/S, Nordea Danmark, filial af Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as mandated lead arrangers, and Danske Bank A/S as agent. Other Group entities may accede to the New Facilities Agreement from time to time. The New Facilities are unsecured but are guaranteed by the Company and Netcompany A/S, subject to certain customary limitations. The New Facilities will be available to be drawn upon by the Company, NC TopCo A/S, NC NewCo A/S, Netcompany Holding I A/S and Netcompany A/S on and from Settlement Date to repay the outstanding amounts under the Group's existing indebtedness. The Term Loan Facility may be used for the Refinancing and paying fees, costs and expenses associated with the Offering, and the Revolving Facility may be used for the Refinancing, and for general corporate purposes of the Group (including, but not limited to, for investments and capital expenditure and paying fees, costs and expenses associated with the Offering). Any additional amounts made available if the lenders consent to an exercise of the Accordion Option may be used for acquisitions. The interest rate payable on a loan under each New Facility for each interest period is the applicable floating rate (by reference to the currency of that loan) plus a margin. Hence, the applicable rate for each currency denomination will be the corresponding IBOR rate, subject, however, to a floor of zero. The margin is subject to a margin ratchet which varies based on the ratio of the Group's total debt (calculated on a net basis and excluding any cash or cash equivalent investments 168 --- held by the Group) to its consolidated Adjusted EBITA, ranging from 1.10 to 2.10% per annum for each New Facility. Under certain circumstances, the margin for drawing of loans in other currencies than DKK or EUR may be subject to a funding premium. The New Facilities Agreement contains customary warranties, representations, covenants (including limited restrictions on disposals, mergers, change of business, a negative pledge and a restriction on the incurrence of indebtedness by other members of the Group than the Company) and customary events of default (in each case, subject to customary agreed exceptions, materiality tests, carve-outs and grace periods). The New Facilities may only be drawn if the agent under the New Facilities Agreement has received customary conditions precedent documents from certain members of the Group including evidence that the Group's existing indebtedness will be repaid from the proceeds from the New Facilities. In addition, the New Facilities Agreement also contains a leverage financial covenant, which will be tested on a quarterly basis starting on 30 June 2018, which the Group must comply with. The leverage covenant relates to the net debt to Adjusted EBITA (adjusted pro forma for any acquisition, disposals and other group initiatives in the relevant test period) ratio, which shall not exceed 3.50. The New Facilities Agreement is governed by Danish law. ## Group The following table sets forth the terms and maturity of the Group's interest-bearing loans, facilities and borrowings for the year ended 31 December 2017. \| \| Group \| \| \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| Nominal interest rate \| Average effective interest rate \| Currency \| Year of maturity \| Nominal value \| Carrying amount 2017 \| \| \| DKK million \| \| \| \| \| \| \| Bank loans floating rates \| \| \| \| \| \| \| \| Term loans EUR 148,400,000(1) \| 4.0% \| 4.4% \| EUR \| 1 February 2023 \| 1,105.1 \| 1,077.6 \| \| Acquisition credit facility (Multicurrency) \| 3.5% \| 5.3% \| DKK/NOK \| 1 February 2023 \| 197.2 \| 187.3 \| \| Total bank loans \| 3.7% \| 4.8% \| DKK \| 1 February 2023 \| 1,302.3 \| 1,264.9 \| \| Revolving credit facility (Multicurrency)(2) \| 3.5% \| 4.7% \| DKK \| 1 February 2023 \| 139.9 \| 139.9 \| \| Total \| 3.7% \| 4.8% \| DKK \| 1 February 2023 \| 1,442.2 \| 1,404.8 \| \| Non-current liabilities \| \| \| \| \| \| 1,264.9 \| \| Current liabilities \| \| \| \| \| \| 0 \| (1) Interest on the EUR term loan facility has been hedged. (2) Off-balance interest bearing facility. The Group's interest-bearing loans, facilities and borrowings as listed above will be refinanced through the Refinancing, which is subject to the closing of the Offering. The fair value of bank loans is deemed to approximate the nominal value of the loans. The carrying value of the loans is based on the amortised cost method and upon initial recognition recognised at the loan proceeds received less cost to obtain the loans. The loan costs are amortised over the life of the loans based on the effective interest rate method. The repayment profile for the bank debt is conditional on the Group complying with certain financial ratios (covenants). In 2017, the Group complied with the covenants defined. 169 --- # Capital expenditure The Group's capital expenditure consists primarily of investment in servers and other IT equipment, mainly related to the part of the Group's operations centre that is not "cloud based", as well as furniture and refurbishments of the Group's office spaces. The following table sets forth the Group's capital expenditure for the three months ended 31 March 2018 and 2017 and the years ended 31 December 2017, 2016 and 2015. \| \| Three Months ended 31 March \| \| Year ended 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| \| \| Property, plant and equipment \| (3.5) \| (4.9) \| (16.7) \| (13.0) \| (3.0) \| \| Intangible assets \| — \| — \| (10.1) \| — \| — \| \| Capitalised development costs \| — \| — \| (1.0) \| (9.2) \| (5.9) \| \| Deposits \| (1.1) \| — \| (2.3) \| (1.5) \| (0.6) \| \| Total capital expenditure \| (4.6) \| (4.9) \| (30.2) \| (23.6) \| (9.6) \| Capital expenditure for the three months ended 31 March 2018 was DKK 4.6 million a decrease from DKK 4.9 million in the three months 31 March 2017, principally due to a lower level of investment in office expansions in the three months ended 31 March 2018 compared to the three months ended 31 March 2017. Capital expenditure for the year ended 31 December 2017 was DKK 30.2 million, an increase from DKK 23.6 million in the year ended 31 December 2016, principally due to an increase in expenditure on property, plant and equipment primarily driven by the expansion of the Group's Copenhagen and Polish offices and related increase in office space, and by investment in servers relating to the Group's operations services. The increase in intangible assets expenditure in 2017 related to a reclassification of the purchase price of Netcompany A/S, following the transaction on 1 February 2016 where the Significant Shareholders acquired a majority stake in the Group, which was a one-off and will not be recurring. Capitalised development cost declined in 2017 compared to 2016, as the Group no longer capitalised its development costs. Deposits increased in 2017 compared to 2016, due the increase in the Group's office space in Copenhagen. Capital expenditure for the year ended 31 December 2016 was DKK 23.6 million, an increase from DKK 9.6 million in the year ended 31 December 2015, principally due to an increase in property, plant and equipment primarily driven by the expansion of the Group's Copenhagen office and increase in office space, and by investment in servers relating to its operations services. # Financial and other long-term contractual obligations The total contractual obligations as at 31 December 2017 can be specified as follows: \| \| Less than 1 year \| 1-5 years \| 5 years and more \| Total \| \| --- \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| \| Finance lease obligations \| 13.6 \| 17.6 \| — \| 31.2 \| \| Other long-term liabilities(1) \| — \| — \| — \| — \| \| Total \| 13.6 \| 17.6 \| — \| 31.2 \| (1) Other long-term liabilities include service agreements with third parties, rental of extra capacity from other data centres, and other service agreements covering primarily finance, HR, and facilities. # Off-Balance Sheet Arrangements As at 31 December 2017, the Group's off-balance sheet arrangements consisted of performance guarantees provided through its banks as part the Group's contract commitments with customers of DKK 139.9 million (2016: DKK 51.6 million, 2015: DKK 0.0 million). # Disclosures About Market Risks The Group's activities expose it to a variety of risks, including credit risk, liquidity risk, interest rate risk and foreign exchange risk. The Group's objective at all times is to limit the Group's financial risks. The Group manages the financial risks and coordinates cash management and management of interest rate and currency risks based on financial risk policies agreed with the Board of Directors. The following is an overview of these principal market risks. These risks are also described in the "Risk Factors" section of this Offering Circular. See, in particular, "Risk Factors—Risks Relating to the Group's Business and Operations". --- Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Group. The Group has adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The majority of the Group’s customers are large or established Danish enterprises, pension companies and public sector entities. Approximately 82% of the Group’s credit exposure is to Danish corporate or state entities, all of which have very strong investment-grade credit ratings, and the remaining portion of its credit exposure is to other companies with investment-grade credit ratings (including ratings allocated by local investment banks). In Norway and in the UK, the Group has fewer customers who are public sector entities compared to Denmark. The Group’s customers in Norway and the UK, in both the public and private sector segments, are of good credit quality and prior to their acquisition by the Group, the Norwegian and UK entities had very limited provisions for bad debts. The Group has established credit check procedures in relation to entering into contracts with new customers that are applicable to the entire Group. Historically, it has only realised non-material losses as a result of credit risk. See also “Risk Factors—If the Group were unable to bill for its services or collect its receivables, its results of operations and cash flows could be materially adversely affected”. In 2017, the Group did not have any bad debt losses. At 31 December 2017, the credit risk is assessed to be limited by the Audit Committee. As at 31 December 2017, the Group has made a provision of DKK 0 (2016: DKK 0, 2015: DKK 0) for potential bad debts. The Group is also exposed to counterparty credit risk when entering into financial contracts with banks. Its treasury policy requires it to only enter into financial contracts with approved banks that fulfil certain minimum credit rating requirements (P-1/A-1/F1 for short-term financial contracts and A2/A/A for long-term financial contracts). In certain circumstances, the Group may deviate from the minimum credit rating requirement if the bank is appointed as a Systematically Important Financial Institution, subject to written approval by, depending on the degree of deviation, the Group’s Chief Financial Officer or Audit Committee. As at 31 December 2017, the Group had cash and cash equivalents of DKK 194.5 million. Under the Group’s treasury policy, surplus liquidity will be invested in money market deposits, AAA-rated Danish government bonds and AAA to Aa1/AA+ DKK-denominated mortgage bonds, in each case only with counterparties approved under the treasury policy. The Group’s policy is not to invest in stocks. In addition, financial hedge instruments will only be purchased from selected counterparties. Liquidity risk The Group’s principal liquidity requirements relate to funding its working capital requirements and the purchase of tangible assets for its data centre and servers for its projects. In order to meet its liquidity requirements, the Group’s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and its existing DKK 150.0 million credit facility. The Group experiences some seasonality of cash flow throughout the year (as described above in “—Liquidity and Capital Resources—Overview”). During certain periods within a month, the Group may also experience lower cash flows, for example, after the monthly payments of its employees’ salaries and before the receipt of payment from its customers. At 31 December 2017, the Group has a unutilised credit facility (revolving credit facility) of a total of DKK 10.1 million (2016: DKK 84.8 million, 2015: DKK 40.0 million) and a unutilised acquisition facility of a total of DKK 202.5 million (2016: DKK 202.5 million, 2015: DKK 0.0 million). Interest rate risk The interest-bearing liabilities in the Group relate to the loans obtained to finance the purchases of Netcompany A/S, Mesan AS and Hunter Macdonald Ltd, which bear interest according to OTC Rate Floor Transaction agreement made. In 2017, the floating rate averaged 4.4% (2016: 5% and 2015: 0%), excluding the impact from amortisation of loan costs. Approximately 80% of the bank loans have been converted to fixed interest rate of 4.0% per annum, through the use of interest rate swaps. The fair value of the interest rate swaps outstanding as at 31 December 2017 is negative DKK 38.5 million (2016: DKK 51.0 million and 2015: 0.0 million). The Group is to a limited extent also exposed to interest rate risks relating to the cash balances, which currently bear negative interest due to the current low interest environment. See “Risk Factors—Interest rate fluctuations could materially adversely affect the Group’s business, results of operations, financial condition and cash flows”. 171 --- 172 # Foreign exchange risk The Group is to a limited extent exposed to foreign currency risks. Although the Group reports its operating results in Danish kroner, a portion of the Group’s revenue and expenses are denominated in currencies other than Danish kroner, including Euro, Norwegian kroner, British pound sterling, Polish zloty and Vietnamese dong. In late 2017, the Group acquired a subsidiary in the United Kingdom, Hunter Macdonald Ltd. Up until that time, Hunter Macdonald Ltd operated only in the United Kingdom and Vietnam and all income and expenses were incurred in GBP and dong. In late 2016, the Group acquired a subsidiary in Norway, Mesan AS. Up until that time, Mesan AS operated only in Norway and all income and expenses were incurred in NOK only. See “Business—Material Contracts—Material agreements entered into outside the ordinary course of business”. In 2017, 85.1%, 10.1% and 4.7% of the Group’s costs of service, administration costs and sales and marketing costs were denominated in the Danish kroner, Norwegian kroner and British pound sterling, respectively. As a result, the Group’s results of operations and financial position are impacted by the value of Danish kroner relative to such other currencies. With respect to the Group’s subsidiaries situated in Poland, Norway, the United Kingdom and Vietnam, while there are intra-group transactions with these subsidiaries, the Group does not view these transactions as material. The Group may repatriate dividends from its subsidiaries, which then may be subject to currency risk. See also “Risk Factors—The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies” and “—Key Factors Affecting the Group’s Results of Operations—Exchange rates”. The Group has a EUR 148.4 million term loan facility which has been fully hedged through a currency swap to hedge currency risk. In addition, the Group has a DKK 197.2 million term loan facility which has not been hedged. As a result, any currency gains or losses in respect of the DKK/NOK exchange rate will impact the Group’s financial items and thereby its EBT. The fair value of the currency swaps outstanding as at 31 December 2017 is DKK 10.5 million (2016: DKK 23.1 million and 2015: DKK 0.0 million). # Key Accounting Policies When applying the Group’s accounting policies, Executive Management has to make judgements and estimates of and assumptions about the carrying amount of assets and liabilities that cannot be directly derived from other sources. Such estimates and assumptions are based on historical experience and other relevant factors. The actual results may deviate from such estimates. Estimates made and the underlying assumptions are reassessed on a regular basis. Any changes in the accounting estimates made are recognised in the accounting period in which the change was made as well as in future accounting periods if the change affects the period in which it was made as well as subsequent accounting periods. In the financial statements for 2017, it is particularly important to note the following assumptions and uncertainties: # Special items Such costs and income comprises expenses for restructuring, fundamental structural changes in the business, merger and acquisition costs and costs relating to the Offering. They are therefore presented separately to provide a more comparable basis for assessing the underlying performance. Key assumptions involve judgment from Executive Management in identifying and separating special income or expense items from other items in the income statement. These items are carefully considered in order to ensure correct presentation. # Contract work in progress Contract work in progress for fixed priced contracts is measured at the selling price of work completed at 31 December of the financial reporting year, and the selling price is calculated on the basis of contracted income and the determined stage of completion. Stage of completion is determined making estimates of future hours and other project costs. The Group reviews its contract portfolio on a regular basis. If circumstances arise that change --- the original estimates of the selling price of the contracts or costs, revisions to estimates, including to revenue visibility, are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in the income statement in the period in which the circumstances giving rise to the revisions become known by the Group. ## Provisions for onerous contracts and warranty obligations As part of its regular review of the contract portfolio, the Group may identify contracts where the completion of a contract most likely will result in a negative contribution. In these circumstances, the Group will record a provision to cover the unavoidable loss. Provision for warranty obligations are based on past history and provisions for specific customer cases. The estimates of the provision may be subject to significant management judgement and uncertainty depending on project complexity and on whether there are any disputes with customers in relation to project performance, claims and counter claims, contract interpretation and alike. ## Business combinations Acquisitions of businesses are accounted for using the acquisition method. The cost of an acquisition is measured as the consideration transferred for assets acquired and liabilities assumed in the business combination measured at fair value on acquisition date. ## Year ended 31 December 2017 On 25 October 2017 the Group acquired the entire share capital of Hunter Macdonald Ltd at a price of DKK 345,898,000 of which DKK 120,260,000 was paid in cash and DKK 225,638,000 was settled by the issue of share capital in NC Topco A/S. Hunter Macdonald Ltd, which is located in the United Kingdom, has a subsidiary in Vietnam, which supports the main office. Accounting for a business combination requires Executive Management to estimate the fair value of the assets, such as goodwill, customer relationships and order back-log. Key assumptions for the methods applied in determining the fair value are based on the present value of future cash flows, churn rates or the expected cash flows related to the specific asset. Estimates and methodologies used, can have a material impact on the respective values and ultimately the amount of the fair values recognised. IFRS 3 “Business Combinations” requires that the Group recognise, separately from goodwill, the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The recognised goodwill amount is allocated to the activities of the Group generating separate payments (cash generating units). Determination of cash generating units complies with the management structure and management accounting and reporting of the Group. Goodwill is not amortised, but tested at least once a year for impairment. The Group has defined a process consisting of a review of the balance sheet of Hunter Macdonald Ltd at the acquisition date 25 October 2017, for the purposes of identifying non-recognised assets and liabilities, and for identifying any fair value adjustments to the assets and liabilities already recognised in the balance sheet of Hunter Macdonald Ltd at the acquisition date. 173 --- As part of this process the following unrecognised assets and liabilities were identified in connection with the acquisition of Hunter Macdonald Ltd: Order back-log, DKK 31,481,000 Fair value of order back-log has been determined on the basis of Net Operating Profit Less Adjusted Taxes ("NOPLAT") from the order back-log at the acquisition date, adjusted for amounts already included in the recognition of fair value of other identified intangible assets, and discounted with the internal required rate of return of 13.2% per annum. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. Customer relationships, DKK 75,855,000 Fair value of customer relationships has been determined on the basis of forecasted NOPLAT from the acquisition date in October 2017 to 2024 adjusted for expected churn-rate and discounted with the internal required rate of return of 13.2% per annum. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. Deferred tax liability, DKK 20,394,000 Deferred tax on the remeasurement of order back-log and customer relationships reflects and is equal to the total increase in the fair value of the order back-log and customer relationships as a result of increasing the fair values with the tax amortisation benefit factor. Assets and liabilities recognised as a result of acquisitions in 2017 and 2016 are as follows: \| Current assets \| 2017 \| \| \| --- \| --- \| --- \| \| \| Hunter Macdonald Ltd \| \| \| \| Book value on acquisition date \| Opening balance sheet \| \| Cash and cash equivalents \| 26,287 \| 26,287 \| \| Trade and other receivables(1) \| 51,743 \| 51,743 \| \| Work in progress \| 3,279 \| 3,279 \| \| Right of use assets \| 984 \| 984 \| \| Plant and equipment \| 626 \| 626 \| \| Goodwill \| — \| 214,700 \| \| Customer Relationships \| — \| 75,855 \| \| Order back-log \| — \| 31,481 \| \| Deferred tax of the transaction \| — \| (20,394) \| \| Trade and other payables \| (38,663) \| (38,663) \| \| Consideration transferred \| \| 345,898 \| (1) Trade and other receivables has a fair value of DKK 51,743,000 where trade receivables amount to DKK 37,701,000 and the gross contractual amounts to DKK 169,625,000. It is Executive Management's estimate that all contracts will be recovered in full. ## Goodwill arising on acquisition Based on the measurement of identifiable assets and liabilities at their fair values, the difference between the cash consideration and the fair value of the identified net assets equals DKK 214,700,000, which amount represents the goodwill from the acquisition of Hunter Macdonald Ltd. In addition, the consideration paid for the business combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of Hunter Macdonald Ltd. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. Goodwill is also not deductible for tax purposes. For all other identified assets and liabilities Executive Management determined that the book values in the balance sheet of Hunter Macdonald Ltd at 25 October 2017 were equal to their fair values. ## Revenue and profit contribution The acquisition of Hunter Macdonald Ltd contributed revenues of DKK 61,855,000 and net profit of DKK 12,386,000 to the Group for the period from 25 October to 31 December 2017. Had the acquisition occurred on 1 January 2017, consolidated pro-forma revenue and profit for the year ended 31 December 2017 would have been increased by DKK 286,276,000 and DKK 20,962,000, respectively. 174 --- These amounts have been calculated using the subsidiary's results and adjusting them for: - differences in the accounting policies between the Group and the subsidiary, and - the additional depreciation that would have been charged assuming the fair value adjustments to identifiable intangible assets had applied from 1 January 2017 together with the consequential tax effects. ## Year ended 31 December 2016 On 1 February 2016, the Group acquired the entire share capital of Netcompany A/S and its subsidiaries at a price of DKK 2,320,445,000 in cash. Furthermore, on 22 November 2016, the Group acquired the entire share capital of Mesan AS which is located in Norway. The consideration amounted to DKK 195,611,000 in cash. After the acquisition Mesan AS has changed its name to Netcompany Norway AS. Assets acquired and liabilities recognised at the dates of acquisition are summarised above. The acquisitions have strengthened the Group's position in the European market and added a strong partner, in Mesan AS, to the Group. Goodwill represents the value of the current workforce and potential synergies expected from integration within the Group. \| Current assets \| 2016 \| \| 2016 \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Netcompany A/S \| \| Netcompany Norway AS \| \| \| \| Book value on acquisition date \| Opening balance sheet \| Book value on acquisition date \| Opening balance sheet \| \| \| \| DKK thousand \| \| \| \| Cash and cash equivalents \| 44,428 \| 44,428 \| 27,372 \| 27,372 \| \| Software \| 4,514 \| 4,514 \| — \| — \| \| Trade and other receivables \| 182,860 \| 182,860 \| 26,743 \| 26,743 \| \| Work in progress \| 78,664 \| 78,664 \| — \| — \| \| Deferred tax asset \| 915 \| 915 \| 95 \| 95 \| \| Plant and equipment \| 12,309 \| 12,309 \| 522 \| 522 \| \| Goodwill(1) \| — \| 1,765,207 \| — \| 118,676 \| \| Customer Relationships \| — \| 205,461 \| — \| 62,960 \| \| Order back-log \| — \| 57,454 \| — \| 6,976 \| \| Technology \| — \| 52,909 \| — \| — \| \| Brand \| — \| 167,776 \| — \| — \| \| Corporate tax \| (20,794) \| (20,794) \| (4,080) \| (4,080) \| \| Deferred tax of the transaction \| — \| (106,392) \| — \| (17,484) \| \| Prepayments from customers \| (25,215) \| (25,215) \| — \| — \| \| Trade and other payables \| (99,652) \| (99,652) \| (26,170) \| (26,170) \| \| Consideration transferred \| \| 2,320,445 \| \| 195,611 \| (1) In 2017, the Group has made an additional payment of DKK 10,106,000 which has been added to goodwill for Netcompany A/S. ## Impairment assessment of goodwill and other intangible assets relating to acquisitions The Group has recognised goodwill and certain other intangible assets from the acquisitions of Netcompany A/S (1 February 2016), Netcompany Norway AS (22 November 2016) and Hunter Macdonald Ltd (25 October 2017). Since the acquisition of Hunter Macdonald Ltd took place in the last quarter of 2017, Executive Management has determined that the carrying value of goodwill and the other identified intangible assets is at least equal to their fair values. Management has therefore concluded that goodwill and related intangible assets are not impaired, and no detailed impairment test has been deemed necessary at 31 December 2017 for Hunter Macdonald Ltd. In 2018 the goodwill and the other identified intangibles assets will be tested at least once a year. ## Share based payment A number of key employees of the Group hold shares directly or indirectly in NC TopCo A/S. The key employees participate as shareholders on the same terms and at the same price as the other shareholders of NC --- TopCo A/S. On this basis Executive Management has concluded that NC TopCo A/S is not subject to the requirements of IFRS 2 “Share-based Payment” and since the key employees have acquired shares at the same price as other shareholders, there are no deemed service cost to be recognized relating to the key employees holding shares in NC TopCo A/S. ## Effect of changes in accounting policies In 2017 certain new standards or amendments and revised accounting standards and interpretations issued by IASB have been adopted early by the Group. The following standards have been fully implemented in 2017 and comparative figures for 2016 and 2015 have been adjusted accordingly. ## Application of IFRS 9 “Financial Instruments” The Group has decided to adopt early IFRS 9 and has applied its requirements. The date of initial application (i.e. the date on which the Group has assessed its existing financial assets and financial liabilities in terms of the requirements of IFRS 9) is 1 January 2015. The implementation of IFRS 9 has not affected the current classification and measurement of the Group’s financial instruments. Financial assets and liabilities classified as held-to-maturity and loans and receivables under IAS 39 that were measured at amortised cost continue to be measured at amortised cost under IFRS 9 as they are held within a business model to collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal amount outstanding. The Group has entered into a currency swap and an interest swap which both are measured at fair value. For the currency swap, the fair value of the difference between EUR and DKK has been reflected in financial income, whereas the fair value relating to the time value has been reflected in other comprehensive income and is shown as “Deferred cost of hedging reserve” in equity. The interest swap has been valued at fair value with fair value changes reflected in other comprehensive income and as “Cash flow hedging reserve” in equity. The application of IFRS 9 has not changed the measurement or classification of swaps. The effect of the change from the ‘incurred loss’ model in IAS 39 to the ‘expected credit loss’ model in IFRS 9 is immaterial due to the low credit risk in the Group. Therefore, the implementation of IFRS 9 has not had material impact on the financial position or performance of Group. ## Application of IFRS 15 “Revenue from Contracts with Customers” IASB has issued IFRS 15 “Revenue from Contracts with Customers”. This standard replaces IAS 11 and IAS 18 and sets out the principles for recognition, measurement, presentation and disclosure of revenue from contracts with customers. The Group has decided to adopt early IFRS 15 from 1 January 2017 applying the “full retrospective” approach, which means restating opening retained earnings as if IFRS 15 had always been applied and preparing comparative figures according to IFRS 15. The transition to IFRS 15 has not had any significant impact on revenue, cash-flows or equity for 2017, 2016 or 2015. The Group has recognised revenue in accordance with the same principles as set out by IFRS 15. IFRS 15 introduces a single model to deal with revenue from contracts with customers. Its core principle is that an entity should recognise revenue based on the transfer of promised goods or services to customers with an amount that reflects the consideration to which the entity expects to be entitled for those goods or services provided to customers. Only in relation to subscriptions, which is considered to be an insignificant type of revenue for the Group, has the implementation of IFRS 15 changed the recognition of income. Subscriptions were previously recognised on the date of invoicing and they are now recognised over the subscription period. The effect of this is a total revenue of DKK 1.7 million being recognised in 2018 instead of 2017. There was no effect in 2016 or 2015, and therefore no recognition of revenue in 2017 related to 2016 or in 2016 related to 2015. ## Application of IFRS 16 “Leases” This standard replaces IAS 17 and sets out the principles for recognition, measurement, presentation and disclosure of leases. IFRS 16 uses a single lessee accounting model and requires recognition of assets and liabilities for almost all leases which results in an increase of fixed assets and total financial debt. 176 --- The Group decided to adopt early IFRS 16 from 1 January 2017 applying the “full retrospective” approach, which means restating opening retained earnings as if IFRS 16 had always been applied and preparing comparative figures according to IFRS 16. The impact on the 2016 comparative figures is a decrease in administration cost of DKK 11.6 million, an increase in financial expenses of DKK 0.5 million and an increase in depreciation cost of DKK 11.1 million. In the balance sheet as at 31 December 2016, right of use assets have been recognised at DKK 25.2 million and lease liabilities at DKK 25.3 million. The impact on the 2015 comparative figures is a decrease in administration cost of DKK 8.6 million and an increase in depreciation cost of DKK 8.1 million. In the balance sheet as at 31 December 2015, right of use assets have been recognised at DKK 11.9 million and lease liabilities at DKK 11.9 million. The lease liability is determined as the present value of the remaining payments using the borrowing rate of the entities. The right of use assets are recognised as an amount equal to the initial amount of the lease liability less depreciation. 177 --- FORECAST OF CONSOLIDATED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2018 AND PROJECTIONS OF CONSOLIDATED MEDIUM TERM FINANCIAL TARGETS FOR THE THREE-YEAR PERIOD ENDING 31 DECEMBER 2021 Statement by the Board of Directors and Executive Management The Company has prepared and is presenting herein (i) its forecast of consolidated financial information for the financial year ending 31 December 2018, and (ii) its projections of consolidated medium term financial targets for the three-year period ending 31 December 2021. The principal assumptions upon which the forecast for 2018 and the projections of the consolidated medium term financial targets the three-year period ending 31 December 2021 have been based are stated under “Methodology and Assumptions”. The accounting policies applied are in accordance with the accounting policies as set out in the accounting policies stated in the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49. The forecast of consolidated financial information and the projections of consolidated medium term financial targets included herein is prepared solely for the purpose of this Offering Circular. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, are based on a number of factors, including numerous estimates and assumptions. The principal assumptions upon which the Company has based the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 are described under “Methodology and Assumptions”. A number of those assumptions are outside of the Company’s control or influence. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, represent the best estimates of the Board of Directors and Management at the date of publication of this Offering Circular. Actual results are likely to be different from what is expressed by the forecast of consolidated financial information and from what may be derived from the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 and the variations may be material. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 in this section should be read in conjunction with “Risk Factors” and “Special Notice Regarding Forward-Looking Statements” included elsewhere in this Offering Circular. Copenhagen, 23 May 2018 Netcompany Group A/S Board of Directors Pekka Ala-Pietilä Chairman Thomas Broe-Andersen Deputy Chairman Pernille Fabricius Board Member Juha Christensen Board Member Bo Rygaard Board Member Carsten Gomard Board Member Executive Management André Rogaczewski CEO Claus Jørgensen COO Thomas Johansen CFO 178 --- 179 # Report from Netcompany Group A/S' Independent Auditors regarding the Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021 ## To shareholders and potential investors We have been engaged to issue a report as to whether the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 of Netcompany Group A/S has been properly compiled on the basis stated and whether the basis of accounting used for the consolidated 2018 forecast and projections of medium term financial targets are consistent with the accounting policies of Netcompany Group A/S. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 are stated on pages 181-185 of this Offering Circular. The basis upon which the consolidated 2018 forecast and the projections for the medium term financial targets have been prepared are stated in the section "Methodology and Assumptions". We will express reasonable assurance in our conclusion. The expression "the basis of accounting used for the consolidated forecast and projections of financial information is consistent with the accounting policies of Netcompany Group A/S" means that the consolidated forecast and projections of financial information has been prepared according to the accounting policies stated in the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49. The Company's actual result of operations for the periods presented may be different from the forecast of consolidated financial information and the projections of consolidated medium term financial targets for such periods, since anticipated events may not occur, and the variations may be material. The forecast of consolidated financial information and the projections of consolidated medium term financial targets have been prepared solely for the purpose of this Offering Circular, which has been prepared in accordance with Commission Regulation (EC) No 809/2004 as subsequently amended (the "Prospectus Regulation") and may therefore not be appropriate for another purpose. Our report is issued in accordance with the Prospectus Regulation and has been prepared in accordance with generally accepted Danish practice for reports under the Prospectus Regulation and only in connection with the contemplated admission for trading and official listing on Nasdaq Copenhagen of Shares in Netcompany Group A/S and the public offering of certain of these Shares. ## Management's Responsibility The Company's management is responsible for the proper compilation of the forecast of consolidated financial information and the projections of consolidated medium term financial targets on the basis stated and for the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets being consistent with the accounting policies of Netcompany Group A/S. Furthermore, the Company's management is responsible for selecting the assumptions underlying the forecast of consolidated financial information and the projections of consolidated medium term financial targets. ## Auditors' Responsibility Our responsibility, in accordance with the Prospectus Regulation, is to express a conclusion as to whether the forecast of consolidated financial information and the projections of consolidated medium term financial targets have been properly compiled on the basis stated and whether the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets are consistent with the accounting policies of Netcompany Group A/S. We have performed our work in accordance with ISAE 3000 (revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information and additional requirements under Danish audit regulation. --- Deloitte Statsautoriseret Revisionspartnerselskab is subject to the International Standard on Quality Control, ISQC 1, and thus applies a comprehensive quality control system, including documented policies and procedures concerning compliance with ethical requirements, professional standards and current statutory requirements and other regulation. We have complied with the independence requirements and other ethical requirements included in FSR—Danish Auditors’ guidelines for auditors’ ethical behaviour (Code of Ethics for Auditors) based on the basic principles of integrity, objectivity, professional competence as well as due diligence, confidentiality and professional behaviour. As part of our work, we have checked whether the forecast of consolidated financial information and the projections of consolidated medium term financial targets have been properly compiled on the basis of the assumptions stated and according to the accounting policies set out in the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49, including checking the numerical consistency of the forecast of consolidated financial information and the projections of consolidated medium term financial targets. Our work did not comprise an assessment of whether the assumptions applied are documented, well-founded and complete or whether the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 can be realised, and therefore we express no conclusion thereon. ## Conclusion Our conclusion is based on the understanding of the expression "the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets are consistent with the accounting policies of Netcompany Group A/S" as defined in the introduction to this report. In our opinion, the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, respectively, have been properly compiled on the basis stated and the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets are consistent with the accounting policies of Netcompany Group A/S. Copenhagen, 23 May 2018 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No 33 96 35 56 Kim Takata Mücke State-Authorised Public Accountant mne10944 Brian Schmit Jensen State-Authorised Public Accountant mne40050 --- 181 # Introduction The Company has prepared the forecast of consolidated financial information for the year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 for use in this Offering Circular in accordance with applicable laws and regulations. Such information is the responsibility of the Company’s Board of Directors and Executive Management. The forecast of consolidated financial information and the projections of consolidated medium term financial targets were not prepared with a view toward compliance with published guidelines of the U.S. Securities and Exchange Commission and the American Institute of Certified Public Accountants (the “AICPA”), for preparation and presentation of forecast of financial information and the projections of consolidated medium term financial targets. Accordingly, this information does not include disclosure of all information required by the AICPA guidelines on prospective financial information. The forecast of consolidated financial information and the projections of consolidated medium term financial targets are necessarily based upon a number of assumptions and estimates that, while presented with numerical specificity and considered reasonable by the Company, are inherently subject to significant business, operational, economic and competitive uncertainties and contingencies, and upon assumptions with respect to future business decisions that are subject to change. The Group’s expectations as to future developments may deviate substantially from actual developments, and the Group’s actual results of operations are likely to deviate, and may deviate materially, from the forecasts and projections provided. Accordingly, potential investors should treat this information with caution and not place undue reliance on the expectations set forth below. # Methodology and Assumptions The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, have been prepared on the basis of the accounting policies set out in the note 1 to the Combined Financial Statements for NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49, which are in accordance with the recognition and measurement regulation of IFRS as adopted by the European Union with those applied in the Combined Financial Statements. The forecast of consolidated financial information for the year financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 have been prepared for the purpose of this Offering Circular in accordance with the Group’s ordinary budgeting and forecasting procedures and on a basis comparable to the historical financial information included elsewhere in this Offering Circular. However, the forecast of consolidated financial information and the projections of consolidated medium term financial targets are based on a large number of estimates made by the Group based on assumptions about future events, which are subject to numerous and significant uncertainties, for example, caused by business and/or wider economic risks and uncertainties, which could cause the Company’s actual results to differ materially from the forecast of financial information and the projections of consolidated medium term financial targets presented herein. Certain of the assumptions, uncertainties and contingencies relating to the forecast of consolidated financial information and the projections of consolidated medium term financial targets are wholly or partially within the Group’s control, while others are outside or substantially outside of its control. The Group’s actual results of operations could deviate materially from its forecasts as a result of other factors, including, but not limited to, those described under “Special Notice Regarding Forward-Looking Statements” and “Risk Factors”. For more information regarding principal factors that the Group expects could have a substantial effect on its results of operations, see “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations”. For the purpose of preparing the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, the Group has applied the principal assumptions set forth below. --- 182 # Assumptions ## Reported Revenue Growth The Group’s target for reported revenue growth measured in DKK is based on the following assumptions: - The Group assumes that the underlying market in each of the markets where the Group is already established (Denmark, Norway and the UK) continues to grow in 2018 at the same respective rates as in 2017 and from 2019 to 2021 as forecast in “Industry”, and that the Group will continue to win market share in such countries. The Group’s ability to win market share by entering into new contracts is partially within the Group’s control but it is also based on assumptions that are outside or substantially outside the Group’s control, including assumptions relating to, among other things, stable macroeconomic conditions, no changes in customers’ IT spending or procurement policies, no change in industry or market trends for the Danish, Norwegian and UK IT services markets and the actions of the Group’s competitors, any change of which could affect demand for the Group’s services. The Group also assumes no loss of major customers and no loss of substantial work from existing customers, as consistent with recent years. - The Group assumes consistent growth in headcount throughout the year of between 20% and 25% per year, as consistent with recent years. The timing of when headcount is engaged has a large impact on revenue growth. For example, headcount growth in the fourth quarter compared to the first quarter in a year will have a lower impact on the current year but a relatively higher impact on the following year notwithstanding that average headcount during the year might be the same. Consistent growth in headcount is partially within the Group’s control but it is also based on assumptions that are outside or substantially outside the Group’s control, including assumptions relating to, among other things, the size of the talent pool available for recruitment and the sustained level of interest in graduates joining the Group, any change of which could affect the Group’s consistent growth in headcount. - The Group assumes that utilisation rates will decrease marginally in 2018 compared to 2017 as a result of additional time expected to be spent on business development efforts and the Group assumes that the average charge per hour billed will decrease marginally in 2018 compared to 2017. The Group also assumes a decrease in revenue per employee as a result of the full-year consolidation of Hunter Macdonald Ltd in 2018, as compared to only two months in 2017, with Hunter Macdonald Ltd historically having a lower revenue per employee compared to the Group’s operations in Denmark and Norway. For the period 2019 to 2021, the Group assumes that: (1) utilisation rates in Denmark will be in line with historical levels (which are slightly above the assumed utilisation rates for 2018 but below the utilisation rates realised in 2017, which were higher than historical levels), (2) there will be a modest increase in utilisation rates in Norway (which are expected to be in line with the assumed utilisation rates in Denmark for the period from 2019 to 2021) and (3) utilisation rates in the United Kingdom will gradually increase. No assumptions have been made regarding the amount of overtime worked by consultants and as a result the target for reported revenue growth does not include overtime. Each of the foregoing assumptions relating to the period 2019 to 2021 are based on assumptions partially within the Group’s control. - For 2018, the Group assumes annual revenue growth of between 20% and 25% in both Denmark and Norway, based on revenue visibility (see “Operating and Financial Review—non-IFRS financial measures and other key performance indicators—Revenue visibility”). For 2018, the Group assumes revenue growth of between 10% and 15% in the UK (from the full-year reported revenue for 2017 of DKK 286.3 million as disclosed in the annual report for NC TopCo A/S) (representing a slower pace than has been the case historically for the Group’s acquired business in the UK (Hunter Macdonald Ltd) as a consequence of the integration of the business, including implementation of the Group’s business model). For 2019 to 2021, the Group assumes an average annual revenue growth of between 20% and 25%. The Group’s assumptions regarding annual revenue growth are partially within its control but are also outside or substantially outside the Group’s control, including assumptions relating to, among other things, stable macroeconomic conditions, there being no changes in customers’ IT spending or procurement policies or as to the rates of prolongation or volumes under the Group’s time and material engagements, there being no adverse change in industry or market trends for the Danish, Norwegian and UK IT services markets or the actions of the Group’s competitors, any change of which could affect the Group’s ability to achieve its revenue growth targets. - The Group assumes no revenue growth from potential acquisitions. --- 183 # Organic Revenue Growth In addition to the assumptions above for reported revenue growth, in accordance with the Group’s applied definition for calculating organic revenue growth, the Group’s target for organic revenue growth for 2018 excludes the impact of the acquisition of Hunter Macdonald Ltd made in 2017, and excludes the currency impact from currency exchange fluctuations that are included in the reported revenue growth (see additional assumptions below). For the period 2019 to 2021 there will be no difference between organic revenue growth and revenue growth as the medium term financial targets do not include any acquisitions, and hence all revenue growth will by definition be organic for this period. # Earnings Before Tax (EBT) and EBT Margins The Group’s targets for EBT and EBT margins is based on the following assumptions: - The Group assumes that maintenance revenue will increase at a higher ratio relative to development revenue which will have a positive impact on EBT margins. In addition, the Group assumes a positive impact on EBT margins from the ongoing integration of the Norwegian business. Countering these positive margin developments is the consolidation of Hunter Macdonald Ltd for the full year 2018 compared to only two months in 2017. The Group assumes that the UK business, on a stand-alone basis, will for 2018 yield margins in line with historical performance and that the implementation of the Group’s business model will gradually, over the medium term until 2021, increase margins in the UK. However, in the short term, there will be additional costs incurred in the UK to align the business with the rest of the Group, for example establishing an office in London to attract young IT professionals to its operations, as part of the integration and transformation plans for Hunter Macdonald Ltd. - The Group assumes that FTE-related costs incurred as sales and marketing costs and administrative costs respectively, will increase in line with the assumed increase in total customer-facing FTEs. In 2017, total sales and marketing costs and administrative costs (including non FTE-based costs) increased at a higher ratio relative to the increase in total customer-facing FTEs as a result of the completion of the ERP systems implementation in the first quarter of 2018. The Group’s assumptions relating to FTE-related costs are partially within its control but are also outside or substantially outside its control, including assumptions relating to its ability to increase its total customer-facing FTEs, any change of which could affect the Group’s assumed future FTE-related costs (see headcount growth assumption above for further details). - The Group assumes that it will continue to deliver projects on time, on budget and within scope, consistent with recent years, an assumption that is partially within the its control. - For 2018, the Group assumes special items representing costs related to M&A activities, costs relating to the Offering and strategic considerations of the future structure of the Group to be between DKK 30 million and DKK 35 million. For the period from 2019 to 2021, no special items are assumed as the medium term financial targets do not include any acquisitions. - For 2018, the Group expects amortisation of intangible assets related to previous acquisitions (based on the respective purchase price allocations made) to be in line with reported levels for the first quarter of 2018 annualised for the full year, as the amortisation recorded in the first quarter of 2018 included full amortisation related to all acquisitions. For the period from 2019 to 2021, amortisation is expected to gradually decline in line with the amortisation periods applied for the various types of intangible assets. Each of these assumptions are within the Group’s control. - The Group assumes no additional acquisitions. To the extent there are additional acquisitions in the period from 2019 to 2021, there would likely be an impact on EBIT margin, consistent with the historical impact from the acquisitions of both the Norwegian and the UK businesses, encompassing both costs related to the transactions as such and a dilution of reported EBIT margin until the Group’s business model is fully implemented in any such acquired entities. - The Group assumes that the Refinancing conducted in connection with the IPO Reorganisation will result in a significantly reduced interest rate payable by the Group and the Group expects to repay debt on an ongoing basis based on the expected cash flow generated throughout the years, an assumption that is within the Group’s control. As the medium term financial targets do not include any acquisitions and as the Group expects to continue to generate cash flow in line with historic performance it is --- anticipated that interest costs will be reduced in nominal terms as a proportion of the excess cash flow generated is expected to be used to deleverage the Group. It is expected that debt (assuming no acquisitions) will be reduced by at least DKK 200 million annually. The interest rate applied in the period from 2019 to 2021 is in line with the interest rate under the New Facilities Agreement. - In connection with the Refinancing, the Group expects to unwind its interest rate and currency swaps that were entered into to hedge the interest and currency risks associated with the Group’s financing facilities that were in place prior to the Offering, an assumption that is within the Group’s control. A significant amount of the fair value of these two financing instruments have been accounted for as hedges in the Group’s other comprehensive income and the fair value of the interest rate and currency swaps as at 31 March 2018 is negative DKK 23 million. The Group expects that the unwinding of the interest rate and currency swaps will result in the part of negative fair value previously recognized in other comprehensive income being recycled and added to its financial expenses in the amount of DKK 23 million during the second quarter of 2018. - The Group has capitalised loan costs on its existing financing facilities in place prior to the Refinancing that, in accordance with its accounting principles and as prescribed by IFRS, are being amortised over the duration of the facilities. In connection with the Refinancing, the Group expects that these existing loans will be repaid in full and all capitalised loan costs will be expensed as financial expenses. As at 31 March 2018, capitalised loan costs equalled DKK 31 million and the Group expects that this amount will be expensed as financial expenses during the second quarter of 2018. Each of these assumptions are within the Group’s control. - The Group’s assumes that capital expenditure before addition of “right of use assets” as a percentage of reported revenue to be around 2% in 2018 and around 2% per year from 2019 to 2021, which is partly within the Group’s control. Such capital expenditure assumptions reflects its expected reinvestment requirements and investments related to new customers. Capital expenditure related to “right of use assets” is not included in the assumptions for capital expenditures as this capital expenditure is related to leasehold contracts for office rent and will occur at irregular times. In addition, any leasehold agreements entered into will impact “right of use assets” and have a significant impact on the balance sheet as, in accordance with IFRS, such leaseholds will be fully capitalised and then subsequently depreciated over the period of the leasehold. Capitalisation of “right of use assets” will include a similar increase in leasing obligations and, accordingly, there will be no cash flow impact at the time of capitalising “right of use assets”. - The Group expects depreciation of “right of use assets”—included in administrative costs—to increase for the full year 2018 as the Group expects to enter into a new leasehold agreement in London as part of the integration and transformation plans for Hunter Macdonald Ltd. ## Adjusted EBITA Margins (for the financial year ending 31 December 2018) - In addition to the assumptions above for EBT, the Group’s target for adjusted EBITA margin for 2018 excludes costs related to M&A activities, costs relating to the Offering and strategic considerations of the future structure of the Group (estimated to be between DKK 30 million and DKK 35 million in 2018), which will be reported as special items. ## Additional Assumptions In addition, the Group has assumed the following which are entirely outside the Group’s control: - based on the currency exchange rates used for 2017 related to NOK, and for the last two months of 2017 related to GBP and Vietnamese dong, currency exchange fluctuations are estimated to positively impact revenue and margins in reported currency by around 0.5% to 1.0% in 2018. For 2019 to 2021, reported revenue and earnings are forecast at constant exchange rates in line with those used for the 2018 forecast. The currency exchange rates the Group uses in the future are subject to change as a result of changes in the currency market. In general, average salary cost per FTE is expected to be stable as a consequence of applying a strict focus on maintaining the current pyramid structure. A general inflation rate of 2% has been assumed for all revenues and costs throughout the period from 2019 to 2021; and - there will be no changes in existing political, legal, fiscal, market or economic conditions or in applicable legislation, regulations or rules, which, individually or in the aggregate, have a material adverse effect on the Group’s results of operations. 184 --- Except as set forth above, the above assumptions are outside or substantially outside of the Group’s control. ## Non-IFRS Financial Measures Organic revenue growth, EBITA margin and adjusted EBITA margin are not measures of financial performance under IFRS and are defined and reconciled in the section “Presentation of Financial and Certain Other Information”. The Group uses these measures to monitor the underlying performance of its business and operations. Not all companies may calculate organic revenue growth or adjusted EBITA margin in the same manner or on a consistent basis, and, as a result, the Group’s presentation may not be comparable to measures used by other companies under the same or similar names. Accordingly, these non-IFRS measures should not be used alone or as a substitute of IFRS financial measures. ## Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 - The Group targets reported revenue at the top end of the range between DKK 1,940 million and DKK 2,011 million (equal to revenue growth at the top end of the range of between 37% and 42%). - The Group targets organic revenue to grow at the top end of the range of between 20% and 25%. - The Group targets earnings before tax of between DKK 213 million and DKK 282 million (equal to an earnings before tax margin of between 11% and 14%). - The Group targets an adjusted EBITA margin of between 24.5% and 27.5%. The Group estimates that special items will be between DKK 30 million and DKK 35 million. ## Projections of Consolidated Medium Term Financial Targets for the Three-Year Period Ending 31 December 2021 - The Group targets annual reported revenue growth to be between 20% and 25%. - The Group targets annual organic revenue growth to be between 20% and 25%. - The Group targets earnings before tax margin to be in the low to mid 20s% range in 2021 at the latest. - The Group targets EBITA margin to be in the mid to high 20s% range in 2021 at the latest. See “Special Notice Regarding Forward-Looking Statements”. 185 --- BOARD OF DIRECTORS, EXECUTIVE MANAGEMENT AND KEY EMPLOYEES ## Overview The Company has a two-tier governance structure consisting of the Board of Directors and the Executive Management. The two bodies are separate and have no overlapping members. The Executive Management is supported by one key employee (the “Key Employee”). ## Board of Directors The Board of Directors is responsible for the overall and strategic management and proper organisation of the Company’s business and operations and it supervises the Company’s activities, management and organisation. The Board of Directors appoints and dismisses the members of the Executive Management, who are responsible for the day-to-day management of the Company. In accordance with article 10.1 of the Articles of Association, the general meeting of the Company shall elect not less than three and not more than seven members to the Board of Directors. The Board of Directors elects a chairman (the “Chairman”) and a deputy chairman (the “Deputy Chairman”) of the Board of Directors among its members. If the Chairman resigns during a term of election, the Deputy Chairman shall take up the position as Chairman until a new Chairman is elected among the members of the Board of Directors. See article 10.3 of the Articles of Association. The members of the Board of Directors elected by the general meeting are elected for a term of one year. Members of the Board of Directors may be re-elected. The existing Board of Directors is currently comprised of six members elected by the general meeting comprising the Chairman, Deputy Chairman and four board members. The Company believes that the members of the Board of Directors possess the professional skills and experience required to serve as board members of the Company and to supervise and manage a company with shares admitted to trading and official listing on Nasdaq Copenhagen. The following table presents an overview of the Board of Directors: \| Name \| Position \| Independent(1) \| Year of first appointment \| Expiration of term \| \| --- \| --- \| --- \| --- \| --- \| \| Board of Directors \| \| \| \| \| \| Pekka Ala-Pietilä \| Chairman \| Independent \| 2018(3) \| 2019 \| \| Thomas Broe-Andersen \| Deputy Chairman \| Not independent \| 2018(2) \| 2019 \| \| Pernille Fabricius \| Board member \| Independent \| 2018(3) \| 2019 \| \| Juha Christensen \| Board member \| Independent \| 2018(4) \| 2019 \| \| Bo Rygaard \| Board member \| Not independent \| 2018(4) \| 2019 \| \| Carsten Gomard \| Board member \| Not independent \| 2018(5) \| 2019 \| (1) The Company has based its assessment of independence on the basis of the criteria set out in the Corporate Governance Recommendations (as defined below). (2) Thomas Broe-Andersen initially joined the Group as board member of NC TopCo A/S in January 2016. (3) Pekka Ala-Pietilä and Pernille Fabricius initially joined the Group as board members of NC TopCo A/S in October 2017. (4) Juha Christensen and Bo Rygaard initially joined the Group as board members of NC TopCo A/S in November 2016. (5) Carsten Gomard co-founded the Group together with the CEO and COO. The Company currently has three board members, Thomas Broe-Andersen, Bo Rygaard and Carsten Gomard, who are not considered independent and three board members, Pekka Ala-Pietilä, Pernille Fabricius and Juha Christensen, who have been assessed by the Company to be independent. The business address of the members of the Board of Directors is: Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. ## Biographies Other than as presented below, none of the members of the Board of Directors have been a member of the administrative, management or supervisory bodies of a company or a partnership or been a partner in a partnership outside the Group within the past five years. 186 --- Biographies—Board of Directors Pekka Ala-Pietilä (full name: Pekka Juhani Ala-Pietilä, born 1957, Finnish nationality) has been chairman of the board of directors of NC TopCo A/S since October 2017 and Chairman of the Board of Directors of the Company since May 2018. Pekka Ala-Pietilä is currently chairman of the Artificial Intelligence Steering Group for the Finnish Ministry of Economic Affairs and Employment, deputy chairman of the Steering Group for Public Sector Digitalisation for the Finnish Ministry of Finance. In addition, Pekka Ala-Pietilä is currently chairman of the board of directors of Huhtamäki Oyj (listed on Nasdaq Helsinki), Sanoma Oyj (listed on Nasdaq Helsinki) (board member until 2016), member of the board of directors of Suomalaisen Yhteiskoulun Osakeyhtiö, CVON Innovation Services Oy and Faux Oy and a member of the supervisory board of SAP SE (listed on Xetra and The New York Stock Exchange). In the past five years, Pekka Ala-Pietilä has previously been chairman of the board of directors of Solidium Oy, and member of the board of directors of Pöyry PLC until 2017 (listed on Nadaq Helsinki). Pekka Ala-Pietilä holds a Master of Science in Economics from Helsinki School of Economics, Finland. Thomas Broe-Andersen (born 1972, Danish nationality) has been a member of the board of directors of NC TopCo A/S since January 2016 and Deputy Chairman of the Board of Directors of the Company since May 2018 as a representative of FSN Capital Partners. Thomas Broe-Andersen is currently a partner in FSN Capital Partners, CEO of TBA Holding 2 ApS, chairman of the board of directors of Forward TopCo A/S and member of the board of directors of Fitness World A/S (chairman of the board of directors until 2015), Fitness World Group A/S (chairman of the board of directors until 2015), FSN SKA A/S (chairman of the board of directors until 2015), EET A/S (chairman of the board of directors until 2015) and EET Holdings A/S (chairman of the board of directors until 2015). In the past five years, Thomas Broe-Andersen has previously been member of the executive management of EET A/S, EET Holdings A/S, TBA-F Holding ApS (dissolved by demerger), TBA Holding 3 ApS (dissolved by declaration), TBA Holding 1 ApS (dissolved by a voluntary winding-up), TBA Holding AS (dissolved by merger), chairman of the board of directors of Danish Brake A/S, P-SKA 2007 A/S (dissolved by merger) TBA Holding AS (dissolved by merger), Skamol Holding A/S (dissolved by merger), Fresh Fitness A/S (dissolved by merger), EET A/S (dissolved by merger) and member of the board of directors of Skamol A/S, Tactel Holding AB, HC TopCo A/S (dissolved by merger), Partner IV AS (dissolved), Room 5 Holding AS (dissolved). Thomas Broe-Andersen holds a Master of Science in Economics from Aarhus School of Business, Denmark. Pernille Fabricius (born 1966, Danish nationality) has been a member of the Board of Directors in NC TopCo A/S since October 2017 and member of the Board of Directors of the Company since May 2018. She is currently Group CFO and member of the board of directors of John Guest International Limited as well as member of the board of directors of its subsidiaries John Guest Limited, John Guest Engineering and John Guest Speedfit. Pernille Fabricius is also member of the board of directors of Royal Greenland A/S, Gabriel Holding A/S (listed on Nasdaq Copenhagen), Gabriel A/S, Gabriel Innovation A/S, Gabriel Ejendomme A/S, Zenxit A/S, Højgaard Holding A/S (listed on Nasdaq Copenhagen) and MT Højgaard A/S. In addition, Pernille Fabricius runs the consulting company Fabricius/Faber Consulting. In the past five years, Pernille Fabricius has previously been chairman of the board of directors of Atak A/S, Damco (Chile) Holding A/S, Damco (Saudi) Holding A/S, Damco (Brazil) Holding A/S, Damco (Canada) Holding A/S and member of the board of directors of Damco International A/S and Damco A/S. She has also been Global CFO of Damco Group and a member of the executive management in Damco Eastern Europe ApS (currently undergoing voluntary liquidation). Pernille Fabricius was a member of the advisory board, industrial advisor and chairman of the board of Silverfleet Capital Limited's portfolio company Ipes and Group CFO of Topaz Group and Getinge Group, the latter of which she was also a member of the board of directors in the subsidiaries, Getinge Infection Control Aktiebolag, Getinge Letting AB, Getinge Treasury Aktiebolag (as deputy board member), Maquet Critical Care AB, Maquet Holding AB, Arjo Ldt Med. Aktiebolag and Arjo Finance Holding AB in which she was also CEO. Pernille Fabricius holds a Master of Science in Business Administration and Auditing and an MBA, both from Copenhagen Business School, Denmark and a Master of Science in Finance and LL.M. in European Union Law, both from Leicester University, United Kingdom. Juha Christensen (full name: Juha Christen Christensen, born 1964, Danish nationality) has been a member of the board of directors of NC TopCo A/S since November 2016. Juha Christensen is currently CEO of CloudMade May 2018. He is currently chairman of the board of directors of CloudMade Ltd., CloudMade, Inc., CloudMade GmbH, Cogniance, Inc., The Pad, Inc., Buttonwood Financial Inc and Brandworkz Ltd. Juha Christensen is also the deputy chairman of Bang & Olufsen A/S (listed on Nasdaq Copenhagen) (board member until 2017). In the past five years, Juha Christensen has been a board member of Selskabet af 30. August 2017 A/S under konkurs (currently undergoing bankruptcy proceedings), Selskabet af 7. September 2017 ApS under 187 --- konkurs (currently undergoing bankruptcy proceedings) and Pelican Imaging Corporation, Inc. Juha Christensen has attended London Business School. Bo Rygaard (born 1965, Danish nationality) has been a member of the Board of Directors of NC TopCo since November 2016 and member of the Board of Directors of the Company since May 2018. Bo Rygaard is a member of the executive management and board of directors of Margot and Thorvald Dreyers Fond. Bo Rygaard is chairman of the board of directors of Skamol A/S, KFI Erhvervsdrivende Fond, Parken Sport & Entertainment A/S (listed on Nasdaq Copenhagen), Lalandia Billund A/S, Lalandia A/S, Fitness DK A/S, Fitness DK Holding A/S, Accomodation Services A/S, EET A/S (board member until 2015) and Krista og Viggo Petersens Fond (board member until 2017). Bo Rygaard is also member of the board of directors of Ejendomsaktieselskabet Vest, Kavi Invest A/S, Tatin ApS, Det Rytmiske Musikhus' Fond, Marie & M.B. Richters Fond, Ejendomsselskabet 1.11.1979 ApS, Racina ApS, Statens Ejendomssalg A/S, ES North A/S, Knud og Dagny Gad Andresens Fond, EJD. Vallensbækvej 46, Tømrerm. H. og G. Langhoffs Fond, Frants Richters Fond, Ejendommen Boyesgade 8-14 m.fl., Ejendommen Sundby Industrigaard, Matr. Nr. 5661 Udenbys Klædebo I/S Titangades Industrihus, Ejendommen Valby Industricenter II, EJD. Wichmannsgade 15 and Ejendommen Birketinget 6. In addition, Bo Rygaard runs the consulting firm Bo Rygaard Consulting. In the past five years, Bo Rygaard has previously been chairman of the board of directors of HC Topco A/S (dissolved by merger), J.H. Schultz Information A/S, A/S KFI-Holding (dissolved by merger), A/S KFI-Leasing (dissolved by merger), A/S KFI-DETAIL (dissolved by merger), A/S KFI-Finans (dissolved by merger), KFU-Fonden (dissolved by merger), A/S Total-Invest/KFI (dissolved by merger), KFI Arkitekter og Konsulenter ApS (dissolved by merger), KFI Retail ApS, Jægersborg Alle Midtpunkt ApS, and J.H. Schultz Holding A/S and a member of the board of directors of Fidelia ApS (dissolved by voluntary winding-up), Qubiqa Holding A/S (dissolved by merger), Erik Møller Arkitekter A/S, Kalvebod Hus ApS (dissolved by merger), Riantics A/S, Qubiqa Esbjerg A/S and ApS Ejendomsselskabet K.L.A./KFI (dissolved by merger). Bo Rygaard holds a Master of Science from Copenhagen Business School, Denmark. Carsten Gomard (full name: Carsten Krogh Gomard, born 1966, Danish nationality) co-founded the Group together with André Rogaczewski, CEO and Claus Jørgensen, COO, and was a part of the executive management group until 2010. Carsten Gomard has been a member of the board of directors of NC TopCo A/S since February 2016 and member of the Board of Directors of the Company since May 2018. Carsten Gomard is currently a member of the executive management of Carsten Gomard Holding ApS and Netcompany Holding ApS of which he is also a member of the board of directors. In addition, Carsten Gomard is chairman of the board of directors of Netcompany Holding I A/S, member of the board of directors of Accunia A/S, Accunia Fondsmaeglerselskab A/S, ApS Komplementarselskabet Hillerød III, K/S Hillerød III, Brown Guy ApS. In the past five years, Carsten Gomard has previously been deputy chairman of the board of directors of NC AX 1 ApS (dissolved by demerger), member of the board of directors of Fortconsult A/S, Selma Diagnostics ApS and member of the executive management and board of directors of Netcompany Holding ApS (dissolved by merger), NC AX 2 ApS (dissolved by merger) and NC AX 3 ApS (dissolved by merger). Carsten Gomard also provides consultancy services to Kammeradvokaten, Samuelsen Network, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) as well as to the Group. Carsten Gomard holds a Master of Science in Computer Science and a PhD in Computer Science, both from the University of Copenhagen, Denmark. ## Board practices and committees The Board of Directors has resolved that the following board practices and committees shall take effect from the day of Admission. The Board of Directors normally holds at least six regular meetings annually, including a strategy review, plus ad hoc meetings as required. Extraordinary board meetings are convened by the Chairman when necessary or when requested by a member of the Board of Directors, a member of the Executive Management or by the Company's auditor. The Board of Directors forms a quorum when more than half its members are represented, including the Chairman or the Deputy Chairman. Resolutions of the Board of Directors are passed by a simple majority of the votes present at the meeting. In the event of equal votes, the Chairman, or in his/her absence the Deputy Chairman, shall have the casting vote. The Board of Directors conducts an annual evaluation of the performance, achievements, competencies and composition of the Board of Directors and of the individual members as well as the collaboration with the Executive Management. The following board committees have been established by the Board of Directors, each of which has a charter setting forth its purpose and responsibilities. All the committees report and make recommendations to the Board of Directors. 188 --- 189 # Audit Committee The Company’s audit committee (the “Audit Committee”) shall assist the Board of Directors with the oversight of the financial reporting process, the statutory audit of the Company’s financial report, internal control and risk management systems, the Company’s whistleblowing procedures and complaints, the supervision of the external auditor’s independence and the procedure for the election of the external auditor. In accordance with the Recommendations on Corporate Governance of the Danish Committee on Corporate Governance issued in November 2017 (the “Corporate Governance Recommendations”), the Company has decided that the Chairman of the Board of Directors may not also be the chairman of the Audit Committee. The majority of the members of the Audit Committee is required to meet the independence requirements set out in the Corporate Governance Recommendations, unless the Board of Directors decides otherwise. In addition, at least one member shall have accounting or audit qualifications and between them, the members shall possess such expertise and experience as to provide an updated insight into, and experience in, the financial, accounting and audit aspects of companies with shares admitted to trading and official listing on a regulated market. As of the date of this Offering Circular, the Board of Directors has decided that the majority of the members of the Audit Committee will not meet the independence requirements set out in the Corporate Governance Recommendations. The Audit Committee shall consist of no less than three members appointed by and among the Board of Directors, including the chairman of the Audit Committee, and is expected to consist of Pernille Fabricius as chairman, Thomas Broe-Andersen and Carsten Gomard. Members of the Executive Management, the Company’s external auditor and any employee of the Company shall participate in meetings of the Audit Committee if so requested by the Audit Committee and the external auditor shall attend at least one meeting per year or the relevant part hereof where the Executive Management is not present. # Remuneration Committee The Company’s remuneration committee (the “Remuneration Committee”) shall ensure that the Company maintains a Remuneration Policy for the members of the Board of Directors and the Executive Management which includes the overall guidelines on incentive pay for the Board of Directors and the Executive Management in accordance with Section 139 of the Danish Companies Act, and to evaluate and make recommendations for the remuneration of the members of the Board of Directors and the Executive Management. The Remuneration Committee shall consist of no less than two members appointed by and among the Board of Directors, including the chairman of the Remuneration Committee. The majority of the members of the Remuneration Committee must be independent, unless the Board of Directors decides otherwise. The Remuneration Committee is expected to consist of Juha Christensen as chairman, Bo Rygaard and Pekka Ala-Pietilä. The majority of the members of the Remuneration Committee will meet the independence requirements set out in the Corporate Governance Recommendations. # Nomination Committee The Company’s nomination committee (the “Nomination Committee”) shall assist the Board of Directors with ensuring that appropriate plans and processes are in place for the nomination of candidates to the Board of Directors and the Executive Management. Moreover, the Nomination Committee shall evaluate the composition of the Board of Directors and the Executive Management. This includes making recommendations for the nomination or appointment of members of the Board of Directors and the Executive Management. The Nomination Committee shall consist of no less than two members appointed by and among the Board of Directors, including the chairman of the Nomination Committee. The majority of the members of the Nomination Committee must be independent, unless the Board of Directors decides otherwise. The Nomination Committee is expected to consist of Thomas Broe-Andersen as chairman and Pekka Ala-Pietilä. As of the date of this Offering Circular, the Board of Directors has decided that the majority of the members of the Nomination Committee will not meet the independence requirements set out in the Corporate Governance Recommendations. # Compensation of the Board of Directors Members of the Board of Directors receive fixed annual fees and additional fees for their work in committees, such as the Audit Committee, the Remuneration Committee and Nomination Committee or other committees established by the Board of Directors, which will be presented for approval by the Company’s shareholders at the general meeting. Members of the Board of Directors may retain additional fee for operational --- tasks carried out on an ad-hoc basis outside the scope of the ordinary duties of the Board of Directors. Such additional tasks must be approved by the Board of Directors and any additional fees must be determined by the Board of Directors. Expenses, such as travel and accommodation in connection with board meetings as well as relevant training, may be reimbursed by the Company. Remuneration of the Board of Directors shall not include incentive programmes. The Company was incorporated in April 2018 and accordingly, no compensation was paid by the Company to the Board of Directors in respect of the financial year 2017. However, in respect of the financial year 2017, the members of the Board of Directors have received compensation in the total amount of DKK 1.7 million from NC TopCo A/S for their board member services. Thomas Broe-Andersen waived his rights to board fees for the financial year 2017. In addition, Carsten Gomard entered into a consultancy contract in September 2017 (which was amended in April 2018) with the Group regarding provision of consultancy services, the scope of which shall be agreed with the Chairman. Pursuant to the contract, Carsten Gomard is entitled to a quarterly fee of DKK 200,000 in addition to any fees received as per his membership of the Board of Directors, however not more than DKK 1,000,000 in the aggregate per year. The contract may be terminated with a notice period of 12 months, by either the Group or Carsten Gomard. Following completion of the IPO Reorganisation and the Admission, no member of the Board of Directors will receive compensation from any Group subsidiary for any board services performed to such subsidiary. The Company's extraordinary general meeting has approved a resolution that, subject to completion of the Offering, the members of the Board of Directors for the financial year 2018 will receive a fixed annual base fee of DKK 350,000 while the Chairman receives a supplementary fee of DKK 700,000 and the Deputy Chairman receives a supplementary fee of DKK 350,000 for their extended duties. Members of the Audit Committee and the chairman of the Audit Committee will receive a supplementary fee of DKK 87,500 and DKK 175,000, respectively. Thomas Broe-Andersen has decided to waive his rights to board fees for the financial year 2018. Members of the Remuneration Committee and Nomination Committee will receive a supplementary fee of DKK 87,500. However, the Chairman and Deputy Chairman will not receive any additional supplementary fee for their participation in the Remuneration Committee and Nomination Committee. Neither the Company nor any Group company has granted any loans, issued any guarantees or undertaken any other similar obligations to or on behalf of the Board of Directors or any of its members. No member of the Board of Directors is entitled to any kind of compensation upon resignation as a member of the Board of Directors. The Company or any Group company have not allocated funds or made provisions for any pension benefits, severance scheme or the like for the Board of Directors and have no obligation to do so. ## Executive Management According to article 11.1 of the Articles of Association, the Board of Directors appoints an Executive Management consisting of one to four members. The primary task of the Executive Management is to carry out the day-to-day management of the Group with the support of the Key Employee who reports to the CEO. The following table presents an overview of the current members of the Executive Management: \| Name \| Position \| Year of first employment with the Group \| Year of appointment to current position \| \| --- \| --- \| --- \| --- \| \| André Rogaczewski \| CEO \| 2000 \| 2018^{(1)} \| \| Claus Jørgensen \| COO \| 2000 \| 2018^{(1)} \| \| Thomas Johansen \| CFO \| 2017 \| 2018 \| (1) André Rogaczewski and Claus Jørgensen founded the Group together with Carsten Gomard, member of the Board of Directors. The Company believes that all the members of the Executive Management possess the professional skills and international experience required for their positions in the Group and to manage a company with shares admitted to trading and official listing on Nasdaq Copenhagen. The business address of the members of the Executive Management is: Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. --- 191 # Biographies Other than as presented below, none of the members of the Executive Management have been members of the administrative, management or supervisory bodies of a company or a partnership or a partner in a partnership outside the Group within the past five years. André Rogaczewski (full name: André Stelsig Rogaczewski, born 1968, Danish nationality and born with Polish nationality) co-founded the Group together with Claus Jørgensen, COO, and Carsten Gomard, member of the Board of Directors, and has since been a part of the executive management group. André Rogaczewski is currently the chairman of the Confederation of Danish Industries (Dansk Industry), Digital Vendors, a member of the board of directors of the Confederation of Danish Industries (Dansk Industry), Fire Eater A/S, Auction Group A/S, Netcompany Holding ApS and PAYProff Holding A/S. In the past five years, André has previously been chairman of the board of directors of NC AX 1 ApS (dissolved by demerger), NC AX 2 ApS (dissolved by merger) and of NC AX 3 ApS (dissolved by merger), member of the board of directors of Netcompany Holding ApS (dissolved by merger) and Shopall24 Technology ApS under konkurs and a member of the executive management of André Rogaczewski Holding ApS. In addition, André is a member of the Disruption Council of the Danish Government. André Rogaczewski holds a Master of Science in computer science and mathematics from University of Aalborg. Claus Jørgensen (full name: Claus Bo Jørgensen, born 1967, Danish nationality) co-founded the Group together with André Rogaczewski, CEO, and Carsten Gomard, member of the Board of Directors, and has since been a part of the executive management group. Claus Jørgensen is currently a member of the executive management of Holdingselskabet Claus Jørgensen ApS. In the past five years, Claus has been the chairman of the board of directors of Restaurationselskabet af 19. august 2010 ApS (dissolved by voluntary winding-up), the deputy chairman of the board of directors of NC AX 2 ApS (dissolved by merger), NC AX 3 ApS (dissolved by merger), a member of the board of directors of NC AX 1 ApS (dissolved by demerger) (member of the executive management until 2016), Netcompany Holding ApS (dissolved by merger), Shopall24 Group ApS and Shopall24 Technology ApS under konkurs (currently undergoing bankruptcy proceedings). Claus Jørgensen holds a Master of Science in economics from University of Odense. Thomas Johansen (born 1970, Danish nationality) has been the CFO of the Group since June 2017. In the past five years, Thomas Johansen has previously been member of the executive management of Simcorp A/S, chairman of the board of directors of Køge Boldklub and member of the board of directors of COOP Bank A/S. Thomas Johansen holds a Master of Science in Business Administration and Auditing from Copenhagen Business School and an MBA from Rotterdam School of Management. # Compensation of the Executive Management The Company was incorporated in April 2018 and accordingly, no compensation was paid by the Company to the Executive Management in respect of the financial year 2017. However, in respect of the financial year 2017, the members of the Executive Management have received compensation from other Group entities for services performed to such Group entities which consisted of a fixed salary, a cash bonus as well as customary benefits in accordance with market standards. The following table presents an overview of the compensation paid by the Group to the Executive Management in respect of the financial year 2017: \| DKK million \| André Rogaczewski \| Claus Jørgensen \| Thomas Johansen \| \| --- \| --- \| --- \| --- \| \| Salaries, pension and other remuneration \| 3.3 \| 3.3 \| 1.1 \| \| Cash bonus \| — \| — \| 0.4 \| \| Share based payments \| — \| — \| — \| For the financial year ending 31 December 2018, the compensation of the Executive Management may consist of a combination of fixed salary, a cash bonus under the STIP (as defined herein) as well as customary benefits in accordance with market standards and which monetary value cannot exceed $10\%$ of the annual fixed salary. In addition, the members of the Executive Management will participate in the Post-IPO LTIP (as defined herein). The compensation of the members of the Executive Management for the financial year ending 31 December 2018 is in respect of all of their services provided to the Group. Under the STIP for the financial year 2018, the members of the Executive Management may receive a performance-based cash bonus of up to $60\%$ of their annual base salary at the time of grant. See “—Incentive Programmes—Performance-based programmes—Short-term incentive programme” for further details. --- Under the Post-IPO LTIP for the financial year 2018, the members of the Executive Management may be granted restricted share units, the value of which, at the time of grant, is equal to a maximum of 80%, of their annual base salary. See “—Incentive Programmes—Performance-based programmes—Post-Offering long-term incentive programme” for further details. The Group has not granted any loans, issued any guarantees or undertaken any other similar obligations to or on behalf of the Executive Management. Each member of the Executive Management is, under their respective service contracts, entitled to a notice period of 12 months if the employment is terminated by the Company. Subject to certain conditions, the Company may terminate the employment of each member of the Executive Management with six months' notice in case of long-term illness or permanent disability. Each member of the Executive Management may terminate the employment with nine months' notice. The Company or any Group company have not allocated funds or made provisions for any pension benefits, severance scheme or the like for any member of the Executive Management and have no obligation to do so. Under their service contracts, each member of the Executive Management is subject to a non-competition clause for a period of 12 months after expiry of the notice period. The non-competition clauses cover all business carried on by the Company, the Company's parent company, the Company's subsidiaries and affiliated companies at the relevant time. Under Danish mandatory law, non-competition clauses cannot be enforced after expiry of the notice period if termination is initiated by the Company without the member of the Executive Management having given reasonable cause for the dismissal or if termination is initiated by a member of the Executive Management due to the Company's breach. ## Key Employee The Key Employee supports the Executive Management in the day-to-day management within his functional areas. The following table presents the Group's current Key Employee: \| Name \| Position \| Year of first employment with the Group \| Year of appointment to current position \| \| --- \| --- \| --- \| --- \| \| Gustaf Löfberg \| Country Manager, Denmark \| 2000 \| 2017 \| The business address of the Key Employee is: Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. ## Biographies Other than as presented below, the Key Employee has not been a member of the administrative, management or supervisory bodies of a company or a partnership or a partner in a partnership outside the Group within the past five years. Gustaf Löfberg (full name: Gustaf Pontus Löfberg, born 1971, Swedish nationality) has from 2000 been employed with the Group and since November 2017 been employed as Country Managing Partner of Denmark. Gustaf Löfberg holds a Bachelor of Business Administration from the School of Economics and Management of University of Lund and a Master of Science in Computer Science from Faculty of Engineering LTH of Lund. ## Compensation of the Key Employee The Company was incorporated in April 2018 and accordingly, no compensation was paid by the Company to the Key Employee in respect of the financial year 2017. However, in respect of the financial year 2017, the Key Employee has received compensation from other Group entities for services performed to such Group entities which consisted of a fixed salary in the aggregate amount of DKK 2.6 million as well as customary benefits in accordance with market standards. For the financial year ending 31 December 2018, the compensation of the Key Employee may consist of a combination of fixed salary, a cash bonus under the STIP (as defined herein) as well as customary benefits in accordance with market standards and which monetary value cannot exceed 10% of the annual fixed salary. In 192 --- addition, the Key Employee will participate in the Post-IPO LTIP (as defined herein). The compensation of the Key Employee for the financial year ending 31 December 2018 is in respect of all of the Key Employee’s services provided to the Group. Under the STIP for the financial year 2018, the Key Employee may receive a performance-based cash bonus of up to 30% of the Key Employee’s annual base salary at the time of grant. See “—Incentive Programmes—Performance-based programmes—Short-term incentive programme” for further details. Under the Post-IPO LTIP for the financial year 2018, the Key Employee may be granted restricted share units, the value of which, at the time of grant, is equal to a maximum of 20%, of the Key Employee’s annual base salary. See “—Incentive Programmes—Performance-based programmes—Post-offering long-term incentive programme” for further details. The Group has not granted any loans, issued any guarantees or undertaken any other similar obligations to or on behalf of the Key Employee. The Key Employee is, under the Key Employee’s service contract, entitled to a notice period of 12 months if the employment is terminated by the Group. Subject to certain conditions, the Group may terminate the employment of the Key Employee with six months’ notice in case of long-term illness or permanent disability. The Key Employee may terminate the employment with nine months’ notice. The Company or any Group company have not allocated funds or made provisions for any pension benefits, severance scheme or the like for the Key Employee and have no obligation to do so. Under the Key Employee’s service contract, the Key Employee is subject to a non-competition clause for a period of 12 months after expiry of the notice period. The non-competition clause covers all business carried on by the Group and affiliated companies at the relevant time. Under Danish mandatory law, non-competition clauses cannot be enforced after expiry of the notice period if termination is initiated by the Group without the Key Employee having given reasonable cause for the dismissal or if termination is initiated by the Key Employee due to the Group’s breach. ## Incentive Programmes Three incentive programmes will be established in connection with the Offering, comprising the Group’s short-term incentive programme, a cash-based bonus scheme (the “STIP”) replacing the current cash bonus schemes and a share-based post-offering long-term incentive programme (the “Post-IPO LTIP”). In accordance with Section 139 of the Danish Companies Act, the Company has adopted a Remuneration Policy that includes the overall guidelines on incentive pay for the Board of Directors and the Executive Management which have been approved by the general meeting. Any amendments to the Remuneration Policy, including incentive guidelines, will be presented to the Company’s shareholders for approval at a general meeting. The Remuneration Policy, including incentive guidelines, is available on the Company’s website. ## Performance-based programmes ### Short-term incentive programme (the “STIP”) The current unit-based cash bonus scheme of the Company comprising certain employees and the discretionary bonus scheme comprising one member of the Executive Management will be cancelled with retrospective effect from 1 January 2018 and replaced by the STIP, a short-term cash based bonus scheme, with participation from the Executive Management and the Key Employee, neither of whom participate in the current unit-based cash bonus scheme, as well as certain other employees, previously comprised by the unit-based cash bonus scheme. The STIP will become effective upon the date of completion of the Offering with respect of the Executive Management and on 1 January 2018 in respect of the Key Employee as well as certain other employees. The participants will be eligible to receive an annual performance cash bonus, which in respect of the Executive Management will be subject to certain predefined financial targets for the Group as well as individual targets being met. For 2018 the STIP for Executive Management will be calculated pro rata from the date of completion of the Offering until 31 December 2018. The STIP for the Key Employee as well as certain other employees is discretionary and is based on individual performance and the Group’s overall performance. 193 --- In relation to the introduction of the STIP for the Executive Management and the Key Employee, the Group expects to incur additional costs in 2018 of a maximum of DKK 3.5 million, equal to the full potential payments to the current members of the Executive Management and the Key Employee under the STIP. In addition, the fixed salaries of the Executive Management and the Key Employee have been increased to reflect a market based remuneration model, which is expected to result in additional costs in 2018 of DKK 2 million. With respect to the other employees participating in the STIP, which previously participated in the unit-based cash bonus scheme, the introduction of the STIP is not expected to have a material impact in 2018. However, as a result of the introduction of the STIP for certain of the Group's employees in Norway and the UK, the Group expects to incur additional costs in 2018 of a maximum of DKK 1.5 million, equal to the full potential payments to the Group's employees in Norway and the UK, currently expected to participate in the STIP. ## Post-offering long-term incentive programme (the "Post-IPO LTIP") The Post-IPO LTIP will in respect of the Executive Management the Key Employee and certain other employees be established in connection with and subject to completion of the Offering. Pursuant to the Post-IPO LTIP, the Executive Management, the Key Employee and certain other employees are eligible to receive a number of restricted share units at no cost, as determined by the Board of Directors with respect to the Executive Management and as determined by the Executive Management with respect to the Key Employee and certain other employees. Restricted share units are expected to be granted annually (up to 2% of the Company's share capital on an annual basis) in connection with the annual general meeting, as determined by the Board of Directors each year. In respect of the Executive Management, the restricted share units will vest based on achievement of certain financial targets during the three year period from 1 July 2018 to 30 June 2021 and is further conditional upon the member of Executive Management holding Shares with a market value corresponding to one year's fixed salary, prior to any sale of Shares vested under the Post-IPO LTIP, with the exception of inter alia disposals made with a view to settle any tax liabilities incurred as a result of the vesting of restricted share units. The financial targets for the first grant under the Post-IPO LTIP to Executive Management will be based on CAGR in Revenue and CAGR in Adjusted EBITA, which will be weighted equally and calculated by linear interpolation on a sliding scale from 0-100% on the basis of achieving a CAGR in Revenue of a given target and a CAGR in Adjusted EBITA of a given target. In respect of the Key Employee and other employees, the restricted share units will vest during a three year vesting period. Vesting is not conditional upon achieving any financial or non-financial targets. The first grant of restricted share units under the Post-IPO LTIP to the Executive Management and to the Key Employee and the other participating employees will have an estimated aggregate theoretical value of respectively DKK 4.5 million (calculated as 80% and 20% of the fixed salary for the period from 7 June to 31 December 2018 for the Executive Management and the Key Employee, respectively) and DKK 14.5 million (calculated as the value of the grants based on the fixed salary for the period from 7 June to 31 December 2018). The Post-IPO LTIP will be treated as an equity-settled share-based incentive programme and expensed over the three-year vesting period, based on a number of conditions, e.g. market price at grant, peer group volatility and estimated retention effects. The Group expects to purchase treasury shares to cover restricted share units granted under the Post-IPO LTIP. The restricted share units may, as an alternative to settlement in Shares in the Company, be settled in cash. For the purpose of delivering Shares to the participants in the Post-IPO LTIP upon vesting of the grant of restricted share units after the first vesting period, the Group has entered into an equity swap allowing the Company, on 15 April 2019, to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) at the Offer Price from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap (the "LTIP Equity Swap"). The number of Shares which may be purchased by the Company from Danske Banks A/S under the LTIP Equity Swap, will be reserved for Danske Bank A/S to purchase in the Offering. The costs related to the LTIP Equity Swap is expected to be approximately DKK 1 million, which will be expensed over the duration of the LTIP Equity Swap. See also "The Offering—Allocation and Reduction". 194 --- 195 # Offering related programmes ## MIP Following the transaction in 2016, where the Significant Shareholders acquired a majority stake in the Group, a management incentive programme (the “MIP”) was established with participation from certain of the MIP Participants and Employee Shareholders. The shares granted pursuant to the MIP, comprise shares in NC TopCo A/S, all of which will be exchanged under the terms of the MIP for new Shares in the Company prior to Admission. The exchange will be completed through a series of share exchanges as part of the IPO Reorganisation. See “Reorganisation” for a description of the steps involved in IPO Reorganisation. The effective exchange ratio for the ordinary shares and the preference shares into new Shares in the Company will be determined on the basis of a combination of factors, that take into account, among other things, the Offer Price. The aggregate number of Shares that will be issued to the MIP Participants and Employee Shareholders as a result of the IPO Reorganisation step relating to the MIP, will be 577,130, assuming an Offer Price at bottom end of the Offer Price Range, 588,085 if the Offering is completed at the midpoint of the Offer Price Range and 597,042 if the Offering is completed at the top end of the Offer Price Range. Upon Admission, the MIP will terminate. Further, the MIP Participants and Employee Shareholders holding Shares through NC ShareCo ApS and NC ManCo AS have agreed, following Admission, to carry out a demerger of NC ShareCo ApS and NC ManCo AS into a number of new individual holding companies held by each of the respective shareholders. See “Ownership Structure and Selling Shareholders—Table of shareholders” for an overview and sample calculation of the Existing Group Shareholders’, and the MIP Participants and Employee Shareholders’ Shares in the Company following the IPO Reorganisation and completion of the Offering, respectively. ## Statement on Past Records During the past five years, none of the members of the Board of Directors, the Executive Management or the Key Employee have been (i) convicted of fraudulent offenses; (ii) directors or officers of companies that have entered into bankruptcy, receivership or liquidation, other than as set out in “—Board of Directors”, “—Executive Management” and “—Key Employee” above; or (iii) subject to any public incrimination and/or sanctions by statutory regulatory authorities (including designated professional bodies), and have not been disqualified by a court from acting as a member of an issuer’s board of directors, executive board or supervisory body or being in charge of an issuer’s management or other affairs. ## Statement on Conflicts of Interest There are no family ties among the members of the Board of Directors, the Executive Management or the Key Employee. With the exception of the members of the Board of Directors, Thomas Broe-Andersen and Bo Rygaard, the Company is not aware of any member of the Board of Directors, or the Executive Management or the Key Employee having been appointed to their current position pursuant to an agreement or understanding with the major shareholders, customers, suppliers or other parties. Thomas Broe-Andersen is a partner at FSN Capital Partners and Bo Rygaard is an Executive Advisor to FSN Capital Partners. FSN Capital Partners is acting as sub-investment advisor to FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of the Significant Shareholders, and thus, Thomas Broe-Andersen and Bo Rygaard represent the interests of the Significant Shareholders. None of the members of the Board of Directors, or the Executive Management or the Key Employee have conflicts of interest with respect to their duties as members of the Board of Directors, or the Executive Management or as Key Employee except for the members of the Board of Directors, Thomas Broe-Andersen and Bo Rygaard, for the reasons set out in the paragraph above. See also “Ownership Structure and Selling Shareholders” for a description of the current ownership interest in the Company held by members of the Board of Directors, or the Executive Management and the Key Employee. None of the members of the Board of Directors, the Executive Management or the Key Employee have positions in other companies which could result in a conflict of interest vis-à-vis such companies, either because the Group has an equity interest in such company or because the Group and the company concerned have an ongoing business relationship, except as disclosed under “Related Party Transactions”. However, the Group may do business in the ordinary course with companies in which members of the Board of Directors, or the Executive Management, or the Key Employee may hold positions as directors or officers. --- It follows from the Rules of Procedure of the Board of Directors and the Danish Companies Act that a member of the Board of Directors or the Executive Management shall not participate in the preparation, discussions or the decision-making process concerning an agreement between the Company (or another company within the Group) and the member in question or concerning legal proceedings between the member in question and the Company (or another company within the Group) or an agreement between the Company (or another company within the Group) and any third party or legal proceedings brought against any third party, if the member in question has a significant interest therein that may conflict with its interests. ## Description of Internal Control and Financial Reporting Procedures The Board of Directors, the Audit Committee and the Executive Management are ultimately responsible for the Group’s risk management and internal controls in relation to its financial reporting, and approve the Group’s general policies in that regard. The Audit Committee assists the Board of Directors in overseeing the reporting process and the most important risks involved in this respect. The Executive Management together with the delivery unit directors are responsible for the effectiveness of the internal controls and risk management and for the implementation of such controls aimed at mitigating the risk associated with the financial reporting. The Group has internal control and financial reporting procedures aimed at enabling it to monitor its performance, operations, funding and risk. While the Group continues to improve its procedures and internal control, including documentation of the internal control systems, the Group believes that its reporting and internal control systems enable it to be compliant with disclosure obligations applying to issuers of shares admitted to trading and official listing on Nasdaq Copenhagen. The Group’s internal control and financial reporting procedures include, among other things: - Consolidated monthly financial information packages, including key performance indicators per operating segment covering hours worked, hours charged and hours used for non-client facing activities, net sales, detailed overview of top ten and bottom ten projects per delivery unit, and contribution and Group income statement, balance sheet, cash flow results and covenant calculations compared with budgeted performance, latest forecast (done on a quarterly basis) and previous year’s performance and explanations of any deviations. The monthly financials are reported to the Executive Management; - Monthly highlight reports from business and operating segments including key performance indicators on actual performance compared with budgeted performance, latest forecast and previous year’s performance and explanations of any deviations. The monthly financial highlights are reported to the Executive Management and discussed at monthly review sessions with management of the operating segments; - Monthly highlight reports from the treasury function on movement in clearing working capital. The monthly financial highlights are also reported to the CFO; - Liquidity management executed on a daily basis, with a view to securing the Group’s required liquidity through appropriate cash management, and maintaining adequate liquidity reserves at any time through a combination of readily available cash, liquid investment portfolios and uncommitted as well as committed credit facilities; and - Centralised planning processes including a centrally driven budget process with bottom-up input from all operating segments, quarterly updated “full year estimates”. The Group has adopted a whistle-blower policy. ## External system audit The Group’s independent auditors are appointed for a term of one year by the shareholders at the Company’s annual general meeting upon recommendation from the Audit Committee. The Board of Directors assesses the independence and competencies and other matters pertaining to the auditors. The framework for the auditors’ compensation and duties, including audit and non-audit tasks, is agreed annually between the Board of Directors and the Group’s auditors based on recommendation from the Audit Committee. The Group has regular dialogue and exchange of information with its auditors. ## General compliance The Group has adopted a Code of Conduct which applies to all the Group’s operations and employees and stipulates the Group’s fundamental rules on acting responsibly and with integrity. The aim of the Code of 196 --- Conduct is to create a company culture that promotes integrity, the Group’s values and ethical guidelines as well as the Group’s environmental policy. The Group has also adopted an Anti-Bribery and Anti-Corruption Policy which sets strict prohibitions and a zero tolerance for bribery and corruption, including guidelines for handling gifts and hospitality, to ensure compliance with all anti-corruption laws, regulations or standards of conduct relevant for the Group’s field of business. ## Corporate Governance The Company is committed to exercising good corporate governance at all times and the Board of Directors will regularly assess rules, policies and practices according to the Corporate Governance Recommendations. Nasdaq Copenhagen has incorporated the Corporate Governance Recommendations in the Rules for issuers of shares of 3 January 2018 (the “Issuer Rules of Nasdaq Copenhagen”). Accordingly, as a company with shares admitted to trading and official listing on Nasdaq Copenhagen, the Company will be required to comply with or explain deviations from the Corporate Governance Recommendations as also required pursuant to Section 107b of the Danish Consolidated Financial Statements Act no. 1580 of 10 December 2015. In connection with the Offering and with effect from the Admission, the Board of Directors has prepared a statutory statement on corporate governance that reflects the compliance of the Company with each of the Corporate Governance Recommendations. The Company intends to comply with the Corporate Governance Recommendations in all material respects, however with the following exceptions: - The majority of the members of the Remuneration Committee will meet the independence requirements set out in the Corporate Governance Recommendations. However, the majority of the members of the Audit Committee and of the Nomination Committee will not meet the independence requirements as set out in the Corporate Governance Recommendations. The background for this deviation is a prioritisation of the skillset, resources and availability of the current composition of the Board of Directors. The Board of Directors will continue to evaluate the composition of its committees, including in the light of the Corporate Governance Recommendations. The Company’s corporate governance practices are also accounted for in the statutory statement on corporate governance, which is available on the Company’s website. 197 --- 198 # OWNERSHIP STRUCTURE AND SELLING SHAREHOLDERS ## Ownership Structure The Company was incorporated on 16 April 2018 for the purpose of being admitted to trading and official listing on Nasdaq Copenhagen as the parent company of the Group at completion of the Offering and the IPO Reorganisation. Prior to completion of the IPO Reorganisation, which will be carried out in connection with pricing and prior to the Admission and completion of the Offering, the Company has a different ownership structure than the Group. See “Reorganisation” for a more detailed description of the steps and transactions involved in the IPO Reorganisation. Following completion of the IPO Reorganisation and prior to Admission, the Shares will be directly owned by the Significant Shareholders (44.1%), André Rogaczewski Holding ApS (the holding company of André Rogaczewski, CEO) (8.5%), Holdingselskabet Claus Jørgensen ApS (the holding company of Claus Jørgensen, COO) (8.5%), Carsten Gomard Holding ApS (the holding company of Carsten Gomard, member of the Board of Directors) (4.4%), NC NorthCo AB (the holding company of Gustaf Löfberg, Country Manager, Denmark) (7.6%), Danica Pension, Livsforsikringsaktieselskab (4.6%) and the MIP Participants and Employee Shareholders (22.3%), in each assuming an Offer Price at the midpoint of the Offer Price Range. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation and will be governed by a shareholders’ agreement. See “Ownership Structure and Selling Shareholders—Agreements related to the Ownership of the Group—Shareholders’ Agreement between André Rogaczewski and Claus Jørgensen”. Gustaf Löfberg, Country Manager, Denmark, has informed the Company that the Shares held indirectly through his holding company, NC NorthCo AB, will be transferred to a Swedish personal pension and life insurance scheme, a Kapitalförsäkring with Danica Pension Försäkringsaktiebolag, Sweden, in connection with Admission. However, the voting rights as well as any rights to decide on disposals of the Shares previously held by NC NorthCo AB, shall remain with Gustaf Löfberg. As of the date hereof, the Company’s share capital amounts to a nominal value of DKK 500,000, divided into 500,000 Shares of DKK 1 each, each of which is fully paid. At the time of completion of the IPO Reorganisation, the Company’s share capital will have a nominal value of DKK 50,000,000, divided into 50,000,000 Shares of DKK 1 each, which will be fully paid up. The Selling Shareholders are offering 20,000,000 Shares. The Significant Shareholders are offering between 8,753,013 and 8,878,762 Offer Shares, excluding any Shares subject to the Overallotment Option and between 11,753,013 and 11,878,762 Offer Shares, including all Shares subject to the Overallotment Option. André Rogaczewski Holding ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Holdingselskabet Claus Jørgensen ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Carsten Gomard Holding ApS is offering between 879,209 and 880,031 Offer Shares, NC NorthCo AB is offering between 1,501,921 and 1,523,498 Offer Shares, Danica Pension, Livsforsikringsaktieselskab is offering between 842,262 and 1,029,431 Offer Shares and the MIP Participants and Employee Shareholders are offering between 4,452,740 and 4,471,735 Offer Shares. Each of the Selling Shareholders will sell a number of Shares pro rata to their relative ownership of the Company, following completion of the IPO Reorganisation, but prior to Admission. The exact number of Shares to be held by each Selling Shareholder, following completion of the IPO Reorganisation, will be determined on the basis of the final Offer Price, as part of the IPO Reorganisation. See “Reorganisation”. ## Table of Shareholders The following tables set out the information regarding the Company’s ownership structure as at the date hereof; at the time of completion of the IPO Reorganisation and prior to Admission and immediately following the completion of the Offering, assuming (i) full exercise of the Overallotment Option and (ii) the sale of 20,000,000 Shares by the Selling Shareholders. The information in the tables on Shares controlled by the Board of Directors, Executive Management and the Key Employee also includes indirect holdings through André --- Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB and other legal entities to the extent relevant and the Shares held by the MIP Participants and Employee Shareholders include Shares held indirectly through NC ShareCo ApS. In case the shareholding percentages do not sum to 100% in the following tables, this is due to rounding. Mid-point of the Offer Price Range \| Shareholder \| Shares owned after the IPO Reorganisation and before completion of the Offering \| \| Shares owned after completion of the Offering \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Number of Shares \| % \| Number of Shares \| % \| \| Significant Shareholders \| 22,055,426 \| 44.11% \| 10,233,252 \| 20.47% \| \| André Rogaczewski Holding ApS(1) \| 4,243,478 \| 8.49% \| 2,546,087 \| 5.09% \| \| Holdingselskabet Claus Jørgensen ApS(2) \| 4,243,478 \| 8.49% \| 2,546,087 \| 5.09% \| \| Carsten Gomard Holding ApS(3) \| 2,198,948 \| 4.40% \| 1,319,369 \| 2.64% \| \| NC NorthCo AB(4) \| 3,784,471 \| 7.57% \| 2,270,683 \| 4.54% \| \| Danica Pension, Livsforsikringsaktieselskab \| 2,316,221 \| 4.63% \| 1,389,733 \| 2.78% \| \| MIP Participants and Employee Shareholders(5) \| 11,157,978 \| 22.32% \| 6,694,789 \| 13.39% \| \| New shareholders \| — \| — \| 23,000,000 \| 46.00% \| \| Total \| 50,000,000 \| 100% \| 50,000,000 \| 100% \| \| Shares held by the Board of Directors, Executive Management and the Key Employee(5) \| \| \| \| \| \| Board of Directors \| \| \| \| \| \| Pekka Ala-Pietilä \| 109,714 \| 0.22% \| 65,829 \| 0.13% \| \| Thomas Broe-Andersen \| — \| — \| — \| — \| \| Pernille Fabricius \| 25,144 \| 0.05% \| 15,087 \| 0.03% \| \| Juha Christensen \| 45,324 \| 0.09% \| 27,195 \| 0.05% \| \| Bo Rygaard \| 16,996 \| 0.03% \| 10,198 \| 0.02% \| \| Carsten Gomard \| 2,198,948 \| 4.40% \| 1,319,369 \| 2.64% \| \| Executive Management(5) \| \| \| \| \| \| André Rogaczewski \| 4,243,478 \| 8.49% \| 2,546,087 \| 5.09% \| \| Claus Jørgensen \| 4,243,478 \| 8.49% \| 2,546,087 \| 5.09% \| \| Thomas Johansen \| 18,130 \| 0.04% \| 10,878 \| 0.02% \| \| The Key Employee(5) \| \| \| \| \| \| Gustaf Löfberg \| 3,784,471 \| 7.57% \| 2,270,683 \| 4.54% \| \| Total, Board of Directors, Executive Management and the Key Employee \| 14,685,683 \| 29.37% \| 8,811,413 \| 17.62% \| (1) André Rogaczewski Holding ApS is the holding company of André Rogaczewski, CEO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (2) Holdingselskabet Claus Jørgensen ApS is the holding company of Claus Jørgensen, COO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (3) Carsten Gomard Holding ApS is the holding company of Carsten Gomard, member of the Board of Directors. (4) NC NorthCo AB is the holding company of Gustaf Löfberg, Country Manager, Denmark. (5) Includes Shares held by the members of the Board of Directors, the Executive Management or the Key Employee personally or legal entities controlled by them. --- Top end of the Offer Price Range \| Shareholder \| Shares owned after the IPO Reorganisation and before completion of the Offering \| \| Shares owned after completion of the Offering \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Number of Shares \| % \| Number of Shares \| % \| \| Significant Shareholders \| 22,196,893 \| 44.39% \| 10,318,131 \| 20.64% \| \| André Rogaczewski Holding ApS(1) \| 4,255,668 \| 8.51% \| 2,553,401 \| 5.11% \| \| Holdingselskabet Claus Jørgensen ApS(2) \| 4,255,668 \| 8.51% \| 2,553,401 \| 5.11% \| \| Carsten Gomard Holding ApS(3) \| 2,198,024 \| 4.40% \| 1,318,815 \| 2.64% \| \| NC NorthCo AB(4) \| 3,808,746 \| 7.62% \| 2,285,248 \| 4.57% \| \| Danica Pension, Livsforsikringsaktieselskab \| 2,105,656 \| 4.21% \| 1,263,394 \| 2.53% \| \| MIP Participants and Employee Shareholders(5) \| 11,179,345 \| 22.36% \| 6,707,610 \| 13.42% \| \| New shareholders \| — \| — \| 23,000,000 \| 46.00% \| \| Total \| 50,000,000 \| 100% \| 50,000,000 \| 100% \| \| Shares held by the Board of Directors, Executive Management and the Key Employee(5) \| \| \| \| \| \| Board of Directors \| \| \| \| \| \| Pekka Ala-Pietilä \| 108,753 \| 0.22% \| 65,252 \| 0.13% \| \| Thomas Broe-Andersen \| — \| — \| — \| — \| \| Pernille Fabricius \| 24,849 \| 0.05% \| 14,910 \| 0.03% \| \| Juha Christensen \| 45,394 \| 0.09% \| 27,237 \| 0.05% \| \| Bo Rygaard \| 17,022 \| 0.03% \| 10,214 \| 0.02% \| \| Carsten Gomard \| 2,198,024 \| 4.40% \| 1,318,815 \| 2.64% \| \| Executive Management(5) \| \| \| \| \| \| André Rogaczewski \| 4,255,668 \| 8.51% \| 2,553,401 \| 5.11% \| \| Claus Jørgensen \| 4,255,668 \| 8.51% \| 2,553,401 \| 5.11% \| \| Thomas Johansen \| 18,158 \| 0.04% \| 10,895 \| 0.02% \| \| The Key Employee(5) \| \| \| \| \| \| Gustaf Löfberg \| 3,808,746 \| 7.62% \| 2,285,248 \| 4.57% \| \| Total, Board of Directors, Executive Management and the Key Employee \| 14,732,282 \| 29.46% \| 8,839,373 \| 17.68% \| (1) André Rogaczewski Holding ApS is the holding company of André Rogaczewski, CEO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (2) Holdingselskabet Claus Jørgensen ApS is the holding company of Claus Jørgensen, COO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (3) Carsten Gomard Holding ApS is the holding company of Carsten Gomard, member of the Board of Directors. (4) NC NorthCo AB is the holding company of Gustaf Löfberg, Country Manager, Denmark. (5) Includes Shares held by the members of the Board of Directors, the Executive Management or the Key Employee personally or legal entities controlled by them. 200 --- Bottom end of the Offer Price Range \| Shareholder \| Shares owned after the IPO Reorganisation and before completion of the Offering \| \| Shares owned after completion of the Offering \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Number of Shares \| % \| Number of Shares \| % \| \| Significant Shareholders \| 21,882,524 \| 43.77% \| 10,129,511 \| 20.26% \| \| André Rogaczewski Holding ApS(1) \| 4,228,580 \| 8.46% \| 2,537,148 \| 5.07% \| \| Holdingselskabet Claus Jørgensen ApS(2) \| 4,228,580 \| 8.46% \| 2,537,148 \| 5.07% \| \| Carsten Gomard Holding ApS(3) \| 2,200,078 \| 4.40% \| 1,320,047 \| 2.64% \| \| NC NorthCo AB(4) \| 3,754,803 \| 7.51% \| 2,252,882 \| 4.51% \| \| Danica Pension, Livsforsikringsaktieselskab \| 2,573,579 \| 5.15% \| 1,544,148 \| 3.09% \| \| MIP Participants and Employee Shareholders(5) \| 11,131,856 \| 22.26% \| 6,679,116 \| 13.36% \| \| New shareholders \| — \| — \| 23,000,000 \| 46.00% \| \| Total \| 50,000,000 \| 100% \| 50,000,000 \| 100% \| \| Shares held by the Board of Directors, Executive Management and the Key Employee(5) \| \| \| \| \| \| Board of Directors \| \| \| \| \| \| Pekka Ala-Pietilä \| 110,888 \| 0.22% \| 66,533 \| 0.13% \| \| Thomas Broe-Andersen \| — \| — \| — \| — \| \| Pernille Fabricius \| 25,505 \| 0.05% \| 15,303 \| 0.03% \| \| Juha Christensen \| 45,239 \| 0.09% \| 27,144 \| 0.05% \| \| Bo Rygaard \| 16,964 \| 0.03% \| 10,179 \| 0.02% \| \| Carsten Gomard \| 2,200,078 \| 4.40% \| 1,320,047 \| 2.64% \| \| Executive Management(5) \| \| \| \| \| \| André Rogaczewski \| 4,228,580 \| 8.46% \| 2,537,148 \| 5.07% \| \| Claus Jørgensen \| 4,228,580 \| 8.46% \| 2,537,148 \| 5.07% \| \| Thomas Johansen \| 18,096 \| 0.04% \| 10,858 \| 0.02% \| \| The Key Employee(5) \| \| \| \| \| \| Gustaf Löfberg \| 3,754,803 \| 7.51% \| 2,252,882 \| 4.51% \| \| Total, Board of Directors, Executive Management and the Key Employee \| 14,628,733 \| 29.26% \| 8,777,242 \| 17.55% \| (1) André Rogaczewski Holding ApS is the holding company of André Rogaczewski, CEO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (2) Holdingselskabet Claus Jørgensen ApS is the holding company of Claus Jørgensen, COO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (3) Carsten Gomard Holding ApS is the holding company of Carsten Gomard, member of the Board of Directors. (4) NC NorthCo AB is the holding company of Gustaf Löfberg, Country Manager, Denmark. (5) Includes Shares held by the members of the Board of Directors, the Executive Management or the Key Employee personally or legal entities controlled by them. The Company is not aware of being owned or controlled, directly or indirectly, by others, and the Company is not aware of any agreement that could later result in others taking control over it other than the agreements entered into in connection with the IPO Reorganisation, see "Reorganisation" and "Agreements related to the Ownership of the Group". ## The Selling Shareholders ### Significant Shareholders The Significant Shareholders comprise FSN Capital IV L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, which are limited partnerships organised under the laws of Jersey and FSN Capital IV (B) L.P. organised under the laws of England, each with registered office at 11-15 Seaton Place, St Helier, Jersey, JE4 0QH. FSN Capital IV Netcompany Co-Investment LP is a direct co-investment vehicle for --- certain of the investors in FSN fund IV. FSN Capital GP IV Limited is acting as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. The Significant Shareholders will, following the IPO Reorganisation and prior to the completion of the Offering, own 44.1% of the Company's share capital and voting rights assuming an Offer Price at the midpoint of the Offer Price Range. Upon the completion of the Offering, the Significant Shareholders will own 10,233,252 Shares, corresponding to 20.5% of the Company's share capital and voting rights, assuming full exercise of the Overallotment Option, and 13,233,252 Shares, corresponding to 26.5% of the Company's share capital and voting rights, assuming no exercise of the Overallotment Option, in each case assuming an Offer Price at the midpoint of the Offer Price Range. The Significant Shareholders will not have special rights pursuant to the Articles of Association. ## FSN Capital Partners Founded in 1999, FSN Capital Partners is a leading Northern European private equity investment group. The group has advised FSN Capital branded funds in more than 70 private equity transactions in the Nordic region and, as of December 2017 the FSN Capital branded funds advised by FSN Capital Partners have more than €2.1 billion in assets under management. With offices in Denmark, Germany, Norway and Sweden, FSN Capital Partners has established a team of approximately 27 investment professionals with a broad range of industrial and financial experience across the Northern European region. FSN Capital Partners focuses on middle-market control investments in Nordic companies helping the portfolio companies owned by the FSN Capital branded funds advised by FSN Capital Partners release the potential for transformation into more competitive, international and profitable companies. ## MIP Participants and Employee Shareholders The MIP Participants and Employee Shareholders comprise a group of 81 individuals as at the date hereof, including four members of the Board of Directors, a member of the Executive Management, some of the previous owners of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018), and certain other employees, having invested in the Group, including through the MIP. The MIP Participants and Employee Shareholders have invested in the Group, directly through NC TopCo A/S (the parent company of the Group, prior to the completion of the IPO Reorganisation) and indirectly through NC ShareCo ApS (a direct shareholder in NC TopCo A/S, prior to the completion of the IPO Reorganisation). See "Board of Directors, Executive Management and Key Employees—Incentive Programmes—MIP" and "Reorganisation" for a description of the MIP and the transactions contemplated in connection with the roll-up of the MIP in connection with the IPO Reorganisation. The MIP Participants and Employee Shareholders will, following the IPO Reorganisation and prior to the completion of the Offering, own 22.3% of the Company's share capital and voting rights assuming an Offer Price at the midpoint of the Offer Price Range. Upon the completion of the Offering, the MIP Participants and Employee Shareholders will own 6,694,789 Shares, corresponding to 13.4% of the Company's share capital and voting rights, assuming an Offer Price at the midpoint of the Offer Price Range. NC ShareCo ApS is a private limited company organised under the laws of Denmark under registration (CVR) no. 37415189. The registered office of NC ShareCo ApS is Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. It is the expectation that NC ShareCo ApS will be dissolved by demerger into individual holding companies prior to Admission, and as a consequence hereof, that the Shares held by the ultimate owners, through NC ShareCo ApS, will be held through such individual holding companies following Admission. ## Agreements Related to the Ownership of the Group ## Reorganisation Agreements See "Reorganisation" for a description of the Reorganisation Agreements entered into between the Company and certain entities of the current Group as well as the shareholders of the Company and these Group entities which sets out the terms and conditions for the IPO Reorganisation to be carried out prior to Admission. 202 --- 203 # Pre-IPO Shareholders' Agreements In connection with the Significant Shareholders' acquisition of a majority stake in the Group in 2016 and in connection with the Group's acquisition of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter MacDonald Ltd (renamed to Netcompany UK Ltd in January 2018), a number of shareholders' agreements were concluded amongst the shareholders of the Group regarding their investment in and orderly governance of the Group. These shareholders' agreements, other than certain customary terms inter alia in respect of confidentiality, will in accordance with their terms cease to have effect upon completion of the Offering. Certain of the MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders' material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders' employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be held by the MIP Participants and Employee Shareholders comprised by this undertaking. # Shareholders' agreement between André Rogaczewski and Claus Jørgensen The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation. André Rogaczewski and Claus Jørgensen have informed the Company that they expect to enter into a shareholders' agreement governing their relations as shareholders in the joint holding company and that the shareholders' agreement will provide that any material decisions by the joint holding company with respect to the Shares, including voting on the Shares and disposals of or creation of other third party rights over the Shares shall be subject to the unanimous decision by André Rogaczewski and Claus Jørgensen. If no unanimous decision can be reached, the shareholders' agreement provides for an informal dispute resolution panel, which shall have the power to decide on the disputed matter, with binding effects on the parties and no rights of appeal. The Company is not a party to the shareholders' agreement and does not have any rights and/or obligations under it. --- 204 # RELATED PARTY TRANSACTIONS The Company was incorporated on 16 April 2018. The Significant Shareholders and the other Existing Group Shareholders will exchange all shares in NC TopCo A/S (including Matching Shares) for new Shares in the Company via a share-for-share exchange. See “Reorganisation” for further details. Accordingly, the Company has not entered into any related party transactions prior to its establishment. The Significant Shareholders, the Board of Directors and the Executive Management are considered related parties of the Company and the Group as they exercise a significant influence on the Company’s and the Group’s operations. Related parties also include such persons’ relatives as well as undertakings in which such persons have significant interests. In addition, companies controlled by the Significant Shareholders are considered related parties. During the periods covered by the historical financial information included in this Offering Circular, the Company and the Group have not undertaken any significant transactions with the Significant Shareholders and the Board of Directors or Executive Management, or with undertakings outside the Group, in which related parties have significant interests, except for: - Remuneration paid to the Board of Directors and the Executive Management as discussed in the section “Board of Directors, Executive Management and Key Employees”, see subsections “Compensation of the Board of Directors” and “Compensation of the Executive Management”. - In the ordinary course of business, the Group has earned revenue from projects delivered to customers controlled by the Significant Shareholders. The revenue derived from such projects constituted respectively DKK 2.5 million in the three months ended 31 March 2018, DKK 2.8 million in the year ended 31 December 2017, DKK 0.7 million in the year ended 31 December 2016 and DKK 0 in the year ended 31 December 2015. - Until 31 January 2016, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) had certain transactions with its past shareholder and the ultimate owners being a group of persons who today are members of the Executive Management, one person is a member of the Board of Directors and one is the Key Employee. This involved: - Transfer of surplus cash to its past shareholder on a regular basis as part of the financing structure under the previous ownership. The receivable balances created by the transfer of cash were then afterwards settled through distribution of dividends. Under this financing set-up, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) settled receivable balances with its past shareholder by declaring dividends of DKK 100 million in 2015 and DKK 116.4 million in January 2016, and - Furthermore, until 31 January 2016, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) and Netcompany IT and Business Consulting A/S (renamed to Netcompany A/S in February 2018) were both members of a Danish joint taxation group with a tax administration company owned by a group of persons who today are members of the Executive Management, one person is a member of the Board of Directors and one is the Key Employee. The joint taxation ceased on 31 January 2016. All receivables and payables resulting from the past joint taxation scheme were settled in connection with the Significant Shareholders acquiring the majority stake in the Group on 1 February 2016. - Certain of the MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders’ material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders’ employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be by the MIP Participants and Employee Shareholders comprised by this undertaking. --- 205 # DESCRIPTION OF THE SHARES AND SHARE CAPITAL The following is a summary of material information relating to the Company's share capital, including a summary of certain provisions of the Articles of Association dated 22 May 2018, as well as a brief description of certain provisions of the Danish Companies Act. This summary does not purport to be exhaustive and should be read in conjunction with the full text of the Articles of Association as well as in the context of applicable Danish law. See “Annex A—Articles of Association of the Company”. The Company is a public limited liability company incorporated on 16 April 2018 and is organised under the laws of Denmark under the name Netcompany Group A/S with its registered office at Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. The Company is registered with the Danish Business Authority under company registration (CVR) no. 39 48 89 14. ## Registered Share Capital As of the date of this Offering Circular, the Company's share capital has a nominal value of DKK 500,000, divided into 500,000 Shares of DKK 1 each or multiples thereof. All Shares are issued and fully paid up. The Shares are not divided into share classes, and all Shares have the same rights and rank pari passu in respect of voting rights, preemption rights, redemption, conversion and restrictions or limitations according to the Articles of Associations or eligibility to receive dividend or proceeds in the event of dissolution and liquidation. No Shares shall carry special rights, restrictions or limitations pursuant to the Articles of Association. Each Share of the nominal value DKK 1 gives the holder the right to one vote at the Company's general meetings. The Company has not issued any securities that are convertible, exchangeable nor have warrants attached, other than in connection with the IPO Reorganisation. At the time of completion of the IPO Reorganisation, the Company's share capital will have a nominal value of DKK 50,000,000, divided into 50,000,000 Shares of DKK 1 each or multiples thereof, which will all be issued and fully paid up. See "Reorganisation" for a description of the IPO Reorganisation. ## Movement in the Share Capital The table set forth below presents the development of the Company's share capital from its incorporation to the date of this Offering Circular as well as in connection with the transactions to be carried out in connection with the IPO Reorganisation. \| Date of approval \| Transaction type \| Share capital before change (DKK) \| Share capital change (DKK) \| Share capital after change (DKK) \| Price (DKK)(1) \| Number of Shares after change \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| 16 April 2018 \| Incorporation of the Company as a public limited company \| — \| 500,000 \| 500,000 \| 100.00 \| 500,000 \| \| IPO Reorganisation transactions \| \| \| \| \| \| \| \| Date of Admission \| Capital decrease(2) \| 500,000 \| (500,000) \| 0 \| 100.00 \| 0 \| \| Date of Admission \| Capital increase(3) \| 0 \| 50,000,000 \| 50,000,000 \| Offer Price \| 50,000,000 \| (1) Calculated in accordance with the practice of the Danish Business Authority whereby payment of an amount equivalent to the nominal value of a Share is set at index price 100. (2) Capital decrease to be carried out immediately prior to the share-for-share exchange with the Existing Group Shareholders to ensure Existing Group Shareholders' respective ownership stakes in the Company correspond to their current ownership stakes of NC TopCo A/S. (3) Capital increase to be carried out in connection with a share-for-share exchange with the Existing Group Shareholders. The price, as calculated in accordance the practice of the Danish Business Authority, will be determined on the basis of the final Offer Price. ## Authorisation to Increase the Share Capital The Board of Directors has pursuant to the Articles of Association been granted authorisation to increase the Company's share capital. In accordance with article 5.1 of the Articles of Association, the Board of Directors is, until 21 May 2023, authorised to increase the share capital of the Company in one or more issues without preemption rights for the --- existing shareholders of the Company by up to a nominal amount of of DKK 10,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 20% of the outstanding share capital at the time of exercise of the authorisation. The capital increase shall take place at market price and may be effected by cash payment, conversion of debt or by contribution of other assets than cash. Additionally, in accordance with article 5.2 of the Articles of Association, the Board of Directors is, until 21 May 2023, authorised to increase the Company's share capital in one or more issues with preemption rights for the existing shareholders of the Company by up to a nominal amount of DKK 5,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 10% of the outstanding share capital at the time of exercise of the authorisation. The capital increase will take place at a subscription price to be determined by the Board of Directors, which may be below the market price. The capital increase shall be effected by cash payment. Shares issued pursuant to the Board of Directors' authorisations shall be fully paid up, shall be issued in the name of the holder, shall be recorded in the holder's name in the Company's register of shareholders, shall be negotiable instruments and shall in every respect carry the same rights as the existing Shares. The Board of Directors is authorised to lay down the terms and conditions for capital increases pursuant to the above authorisations. The Board of Directors is also authorised to amend the Articles of Association as required in connection with the utilisation of the above authorisations. ## Authorisation to Acquire Treasury Shares The Board of Directors is authorised in the period until 21 May 2023 to approve the acquisition of treasury shares, on one or more occasions, with a total nominal value of up to 10% of the share capital of the Company, subject to the Company's holding of treasury shares after such acquisition does not exceed 10% of the Company's share capital. The consideration may not deviate more than 10% from the official price quoted on Nasdaq Copenhagen at the time of acquisition. The authorisation to acquire treasury shares cannot be exercised until the Company's annual report for the financial year ending 31 December 2018 has been approved at the Company's annual general meeting. The Company does not hold any treasury shares as of the date of this Offering Circular. ## Authorisation to Distribute Interim Dividend As of the date of this Offering Circular, the Board of Directors has been authorised by the Company's general meeting to distribute interim dividends but currently has no plan to do so in 2018 or 2019. For further details on dividends and the Company's dividend policy, see "Dividends and Dividend Policy". ## General Meetings and Voting Rights The Company's general meetings shall be held in Greater Copenhagen. The Company's annual general meeting shall be held each year in due time for the audited and approved annual report to be received by the relevant authorities before the applicable statutory time limit. Not later than eight weeks before the contemplated date of the annual general meeting, the Company shall publish the date of the general meeting and the deadline for submitting requests for specific proposals to be included on the agenda. Extraordinary general meetings shall be held when determined by the Board of Directors or requested by the Company's auditor. Furthermore, the Board of Directors shall convene an extraordinary general meeting within two weeks of receipt of a written request from shareholders representing no less than 5% of the share capital containing specific proposals for the business to be transacted at such extraordinary general meeting. General meetings shall be convened by the Board of Directors with at least three weeks' and not more than five weeks' notice. The notice shall be published on the Company's website. Furthermore, a notice of the general meeting shall be sent electronically to all shareholders recorded in the Company's register of shareholders who have requested such notice. In accordance with Danish law, the notice shall specify the time and place of the general meeting and the agenda containing the business to be transacted at the general meeting. If a proposal to amend the Articles of Association is to be considered at the general meeting, the main contents of the proposal shall be specified in the notice. 206 --- The Company’s general meetings shall be held in English. The Board of Directors may decide to offer simultaneous interpretation into Danish. Documents prepared in connection with or following a general meeting shall be in English and, to the extent required by law, in Danish. Annual reports and any interim reports shall be prepared in English. The Board of Directors may resolve to supplement the annual report and interim reports with a Danish translation or a summary in Danish. Every shareholder is entitled to have specific business transacted at the general meeting, provided that the shareholder submits a written request to that effect to the Board of Directors not later than six weeks before the date of the general meeting. The right of a shareholder to attend a general meeting and to vote is determined by the Shares held by the shareholder at the record date. The record date is one week before the general meeting. The Shares held by each shareholder are determined at the record date based on the number of Shares held by that shareholder as registered in the Company’s register of shareholders and any notification of ownership received by the Company for the purpose of registration in its register of shareholders, but which have not yet been registered. At the general meeting, each Share of the nominal value of DKK 1 shall carry one vote. A shareholder who is entitled to attend the general meeting pursuant to the Articles of Association and who wants to attend the general meeting shall request an admission card no later than three days prior to the date of the general meeting. A shareholder may, subject to having requested an admission card in accordance with the Articles of Association, attend in person or by proxy, and the shareholder or the proxy may attend together with an adviser. The right to vote may be exercised by a written and dated instrument of proxy in accordance with applicable laws. The Board of Directors of the Company may be appointed as proxy. A shareholder who is entitled to participate in the general meeting according to the Articles of Associations may vote by postal vote in accordance with the Danish Companies Act. Such postal votes shall be received by the Company not later than the day before the general meeting. Postal votes cannot be withdrawn. ## Resolutions by the General Meetings and Amendments to the Articles of Association Resolutions at general meetings shall be passed by a simple majority of votes cast, unless otherwise prescribed by law or by the Articles of Association. Adoption of changes to the Articles of Association, dissolution of the Company, merger or demerger requires that the resolution is adopted by at least 2/3 of the votes cast as well as the share capital represented at the general meeting, unless applicable laws prescribe stricter or less strict adoption requirements or applicable laws confer specific authority to the Board of Directors or other bodies. The provisions in the Articles of Association relating to a change of the rights of shareholders or a change to the capital are not more stringent than required by the Danish Companies Act. ## Registration of Shares The Shares will be delivered in book-entry form through allocation to accounts with VP Securities through a Danish bank or other institution authorised as custodian. The Shares are issued in dematerialised form through VP Securities. The address of VP Securities is VP SECURITIES A/S, Weidekampsgade 14, P.O. Box 4040, DK-2300 Copenhagen S, Denmark. The Shares shall be fully paid up, issued in the name of the holder and recorded in the holder’s name, in the Company’s register of shareholders through the holder’s custodian bank. The Company’s register of shareholders is kept by Computershare A/S, registration (CVR) no. 27 08 88 99. ## Transfer of Shares The Shares are negotiable instruments, and no restrictions under Danish law apply to the transferability of the Shares. See “Selling Restrictions” and “Transfer Restrictions” for certain restrictions applicable to the Offer Shares. 207 --- 208 # Preemption Rights Under Danish law, the Company’s shareholders generally have preemption rights if the general meeting of the Company resolves to increase the share capital by cash payment. However, the preemption rights of the shareholders may be derogated by a majority comprising at least 2/3 of the votes cast and of the share capital represented at the general meeting if the share capital increase is made at market price. The Board of Directors is authorised to increase the Company’s share capital in one or more issues at market price without preemption rights to the Company’s shareholders. See “—Authorisation to Increase the Share Capital”. The exercise of preemption rights may be restricted for shareholders resident in certain jurisdictions, including but not limited to the United States, Canada, Japan and Australia, unless the Company decides to comply with applicable local requirements. Consequently, U.S. holders and certain other holders of Shares may not be able to exercise their preemption rights or participate in a rights offer, as the case may be, unless a registration statement under the U.S. Securities Act is effective with respect to such rights or an exemption from the registration requirements is available. The Company intends to evaluate at the time of any issue of Shares subject to preemption rights or in a rights offer, as the case may be, the cost and potential liabilities associated with complying with any local requirements, including any registration statement in the U.S., as well as the indirect benefits to the Company of enabling the exercise of non-Danish shareholders of their preemption rights to Shares or participation in any rights offer, as the case may be, and any other factors considered appropriate at the time, and then to make a decision as to whether to comply with any local requirements, including filing any registration statement in the U.S. No assurances are given that local requirements will be complied with or that any registration statement would be filed in the U.S. so as to enable the exercise of such holders’ preemption rights or participation in any rights offer. # Redemption and Conversion Provisions Except as provided for in the Danish Companies Act, see “The Danish Securities Market—Mandatory Redemption of Shares”, no shareholder is under an obligation to have his Shares redeemed in whole or in part by the Company or by any third party, and none of the Shares carry any redemption or conversion rights or any other special rights. # Dissolution and Liquidation In the event of dissolution and liquidation, the Company’s shareholders are entitled to participate in the distribution of assets in proportion to their nominal shareholdings after payment of the Company’s creditors. # Indication of Takeover Bids No takeover offers have been made by any third party in respect of the Shares and during the past or the current financial year no takeover offers have been made by any third party in respect of the shares issued in NC TopCo A/S except for the transaction contemplated to be carried out in connection with the IPO Reorganisation. The Articles of Association do not contain provisions that are likely to have the effect of delaying, deferring or preventing a change in control of the Company. Consistent with the Corporate Governance Recommendations, the Board of Directors has adopted a set of guidelines for the handling of takeover bids. # Disclosure of Information The Board of Directors has adopted a set of internal rules aiming, inter alia, to ensure that the disclosure of information complies with the applicable stock exchange regulations and rules applicable to the Company’s securities listed on regulated markets. All company announcements are published via Nasdaq Copenhagen and can subsequently be accessed from the Company’s website. All company announcements will be published in English and, if decided by the Board of Directors, in Danish. The annual report and any interim reports will be prepared in English. The Board of Directors may resolve to supplement the annual report and interim reports with a Danish translation or a summary in Danish. Investor presentations and telephone conferences are expected to be held following the publication of each interim and annual report to provide participants the opportunity to ask questions to the Executive Management. Audiocasts of such presentations will subsequently be available on the Company’s website. Investors may also contact the Company’s investor relations department to obtain additional information subject to any restrictions under applicable law. --- TAXATION ## Danish Tax Considerations The following is a summary of certain Danish income tax considerations relating to an investment in the Shares. The summary is for general information only and does not purport to constitute exhaustive tax or legal advice. It is specifically noted that the summary does not address all possible tax consequences relating to an investment in the Shares. The summary is based solely upon the tax laws of Denmark in effect on the date of this Offering Circular. Danish tax laws may be subject to change, possibly with retroactive effect. The summary does not cover investors to whom special tax rules apply and, therefore, may not be relevant, for example, to investors subject to the Danish Pension Investment Return Tax Act (i.e. pension savings), professional investors, certain institutional investors, insurance companies, pension companies, banks, stockbrokers and investors with tax liability on return on pension investments. The summary does not cover taxation of individuals and companies who carry on a business of purchasing and selling shares. The summary only sets out the tax position of the direct owners of the Shares and further assumes that the direct investors are the beneficial owners of the Shares and any dividends thereon. Sales are assumed to be sales to a third party. Potential investors in the Shares are advised to consult their tax advisers regarding the applicable tax consequences of acquiring, holding and disposing of the Shares based on their particular circumstances. Investors who may be affected by the tax laws of other jurisdictions should consult their tax advisers with respect to the tax consequences applicable to their particular circumstances, as such consequences may differ significantly from those described herein. ## Taxation of Danish tax resident shareholders ### Sales of shares—individuals Gains from the sale of shares are taxed as share income at a rate of 27% on the first DKK 52,900 in 2018 (for cohabiting spouses, a total of DKK 105,800) and at a rate of 42% on share income exceeding DKK 52,900 (for cohabiting spouses over DKK 105,800). Such amounts are subject to annual adjustments and include all share income (i.e. all capital gains and dividends derived by the individual or cohabiting spouses, respectively). Gains and losses on the sale of shares admitted to trading on a regulated market are calculated as the difference between the purchase price and the sales price. The purchase price is generally determined using the so-called average method which means that each share is considered acquired at a price equivalent to the average acquisition price of all the shareholder's shares in the issuing company. Losses on the sale of shares admitted to trading on a regulated market can only be offset against other share income deriving from shares admitted to trading on a regulated market (i.e. received dividends and capital gains on the sale of shares admitted to trading on a regulated market). Unused losses will be offset against a cohabiting spouse's share income deriving from shares admitted to trading on a regulated market. Any remaining losses after the above deduction can be carried forward indefinitely and offset against future share income deriving from shares admitted to trading on a regulated market. Losses on shares admitted to trading on a regulated market may only be set off against gains and dividends on other shares admitted to trading on a regulated market as outlined above if the Danish tax authorities have received certain information concerning the ownership of the shares before expiry of the tax return filing deadline for the income year in which the shares were acquired. This information is normally provided to the Danish tax authorities by the securities dealer. ### Sale of shares—companies Tax on the sale of shares by companies is subject to different regimes depending on whether the shares are considered as Subsidiary Shares, Group Shares, Tax-Exempt Portfolio Shares or Taxable Portfolio Shares defined as follows: "Subsidiary Shares" are generally defined as shares owned by a company shareholder holding at least 10% of the nominal share capital of the issuing company. 209 --- "Group Shares" are generally defined as shares in a company in which the company shareholder of the company and the issuing company are subject to Danish joint taxation or fulfil the requirements for international joint taxation under Danish law. "Tax-Exempt Portfolio Shares" are generally defined as shares not admitted to trading on a regulated market owned by a company shareholder holding less than 10% of the nominal share capital in the issuing company. Tax-Exempt Portfolio Shares are not relevant in respect of this Offering and will not be described in further detail. "Taxable Portfolio Shares" are shares that do not qualify as Subsidiary Shares, Group Shares or Tax-Exempt Portfolio Shares. Gains or losses on disposals of Subsidiary Shares, Group Shares and Tax-Exempt Portfolio Shares are not included in the taxable income of the company shareholder. Special rules apply with respect to Subsidiary Shares and Group Shares in order to prevent avoidance of the 10% ownership requirement through pooling of shareholdings in a holding company just as other anti-avoidance rules may apply. These rules will not be described in further detail. Capital gains from the sale of Taxable Portfolio Shares are taxable at the corporate income tax rate of 22% in 2018. Losses on such shares are generally deductible. Gains and losses on Taxable Portfolio Shares are, as a general rule, calculated in accordance with the mark-to-market principle. According to the mark-to-market principle, each year's taxable gain or loss is calculated as the difference between the market value of the shares at the beginning and end of the tax year. Thus, taxation will take place on an accrual basis even if no shares have been disposed of and no gains or losses have been realised. If the Taxable Portfolio Shares are sold or otherwise disposed of before the end of the income year, the taxable income of that income year equals the difference between the value of the Taxable Portfolio Shares at the beginning of the income year and the value of the Taxable Portfolio Shares at realisation. If the Taxable Portfolio Shares have been acquired and realised in the same income year, the taxable income equals the difference between the acquisition sum and the realisation sum. If the Taxable Portfolio Shares are acquired in the income year and not realised in the same income year, the taxable income equals the difference between the acquisition sum and the value of the Shares at the end of the income year. A change of status from Subsidiary Shares/Group Shares/Tax-Exempt Portfolio Shares to Taxable Portfolio Shares (or vice versa) is for tax purposes deemed to be a disposal of the shares and a reacquisition of the shares at market value at the time of change of status. ## Dividends—individuals Dividends received by individuals who are tax residents of Denmark are taxed as share income. Share income is taxed at a rate of 27% on the first DKK 52,900 in 2018 (for cohabiting spouses, a total of DKK 105,800) and at a rate of 42% on share income exceeding DKK 52,900 (for cohabiting spouses over DKK 105,800). Such amounts are subject to annual adjustments and include all share income (i.e. all capital gains and dividends derived by the individual or cohabiting spouses, respectively). Dividends paid to individuals are generally subject to 27% withholding tax. ## Dividends—companies Dividends received on Taxable Portfolio Shares are subject to the standard corporate tax rate of 22% irrespective of ownership period. The withholding tax rate is 22%. If the distributing company withholds a higher amount, the shareholder can claim a refund of the excess tax. A claim for repayment must be filed within two months; otherwise the excess tax will instead be credited in the corporate income tax for the year. Dividends received on Subsidiary Shares and Group Shares will not be subject to taxation irrespective of ownership period. The dividends will, however, be subject to certain anti-avoidance rules that will not be described in further detail. 210 --- 211 # Taxation of shareholders residing outside Denmark ## Sales of shares—individuals and companies Shareholders not resident in Denmark will normally not be subject to Danish taxation on any gains realised on the sale of shares, irrespective of the ownership period. Where a non-resident of Denmark holds Taxable Portfolio Shares which can be attributed to a permanent establishment in Denmark, such gains are taxable pursuant to the rules applicable to Danish tax residents as described above. ## Dividends—individuals Under Danish law, dividends paid in respect of shares are generally subject to Danish withholding tax at a rate of 27%. A request for a refund of Danish withholding tax can, however, be made by the shareholder in the following situations: ### 1) Double Taxation Treaty In the event that the dividend receiving individual is a resident of a state having a double taxation treaty with Denmark, the shareholder may claim a refund of the tax amount exceeding the treaty rate from the Danish tax authorities, through certain application procedures. Denmark has executed double taxation treaties with approximately 75 countries, including the United States and almost all members of the EU. The double taxation treaties generally provide for a 15% withholding tax rate. The refund is sought electronically and an online claim form is to be used. When claiming a refund the shareholder must document the following; that Danish dividend has been received by the shareholder and the amount of this dividend, that Danish dividend tax has been withheld and the actual amount withheld, that the shareholder was the beneficial owner of the shares when the dividend distribution was approved, that the shareholder is liable to pay tax in a country that is not Denmark and that the withheld dividend tax exceeds that of the final tax payable according to the double taxation treaty or that the withheld dividend tax exceeds the final tax payable according to current Danish law. The documentation requirements follows from the website of the Danish tax authorities. According to these requirements it will be necessary to provide a certification by the applicable local tax authority. With respect to U.S. persons, a properly completed IRS Form 6166 should satisfy this requirement. ### 2) Credit under Danish tax law In addition, if the shareholder holds less than 10% of the nominal share capital of the company and the shareholder is a tax resident in a state which has a double taxation treaty or an international agreement, convention or other administrative agreement on assistance in tax matters according to which the competent authority in the state of the shareholder is obliged to exchange information with Denmark, dividends are subject to tax at a reduced rate of 15%. If the shareholder is a tax resident outside the EU, it is an additional requirement for eligibility for the 15% tax rate that the shareholder together with related shareholders holds less than 10% of the nominal share capital of the company. Note that the reduced tax rate does not affect the withholding rate. Thus, the shareholder must also in this situation claim a refund as described above in order to benefit from the reduced rate. Where a non-resident of Denmark holds shares which can be attributed to a permanent establishment in Denmark, dividends are taxable pursuant to the rules applicable to Danish tax residents described above. See "Taxation of Danish tax resident shareholders". ## Dividends—companies Dividends received on Subsidiary Shares are exempt from Danish withholding tax provided the taxation of the dividends is to be waived or reduced in accordance with the Parent Subsidiary Directive (2011/96/EU as amended by 2015/121/EU) or in accordance with a tax treaty with the jurisdiction in which the company investor is resident. Dividends from Group Shares are exempt from Danish withholding tax provided the company investor is a resident of the EU or the EEA and the taxation of dividends should have been waived or reduced in accordance with the Parent Subsidiary Directive (2011/96/EU as amended by 2015/121/EU) or in accordance with a tax treaty with the country in which the company investor is resident had the shares been Subsidiary Shares. --- Dividend payments on Taxable Portfolio Shares are subject to Danish withholding tax at a rate of 27% irrespective of ownership period. The aforesaid tax exemption for dividends on Subsidiary Shares and Group Shares is subject to Danish anti-avoidance rules. A request for a refund of Danish withholding tax can be made by the shareholder in the following situations: 1) All foreign corporate shareholders Subject to applicable anti-avoidance rules, all foreign corporate shareholders can claim a refund from the Danish tax authorities of the tax amount exceeding 22%. 2) Double Taxation Treaty In the event that the dividend receiving company is a resident of a state with which Denmark has entered into a double taxation treaty, the shareholder may claim a refund from the Danish tax authorities of the tax amount exceeding the treaty rate, through certain certification procedures. Denmark has executed double taxation treaties with approximately 75 countries, including the United States and almost all members of the EU. The double taxation treaties generally provide for a 15% withholding tax rate. The refund is sought electronically and an online claim form is to be used. When claiming a refund the shareholder must document the following; that Danish dividend has been received by the shareholder and the amount of this dividend, that Danish dividend tax has been withheld and the actual amount withheld, that the shareholder was the beneficial owner of the shares when the dividend distribution was approved, that the shareholder is liable to pay tax in a country that is not Denmark and that the withheld dividend tax exceeds that of the final tax payable according to the double taxation treaty or that the withheld dividend tax exceeds the final tax payable according to current Danish law. The documentation requirements follows from the website of the Danish tax authorities. According to these requirements it will be necessary to provide a certification by the applicable local tax authority. With respect to U.S. entities, a properly completed IRS Form 6166 should satisfy this requirement. 3) Credit under Danish tax law In addition, if the shareholder holds less than 10% of the nominal share capital of the company and the shareholder is a tax resident in a jurisdiction which has a double taxation treaty or an international agreement, convention or other administrative agreement on assistance in tax matters according to which the competent authority in the state of the shareholder is obliged to exchange information with Denmark, dividends are generally subject to tax at a reduced rate of 15%. If the shareholder is a tax resident outside the EU, it is an additional requirement for eligibility for the 15% tax rate that the shareholder together with related shareholders holds less than 10% of the nominal share capital of the company. Note that the reduced tax rate does not affect the withholding rate. Thus, the shareholder must also in this situation claim a refund as described above in order to benefit from the reduced rate. Where a non-resident of Denmark holds shares which can be attributed to a permanent establishment in Denmark, dividends are taxable pursuant to the rules applicable to Danish tax residents described above, see "Taxation of Danish tax resident shareholders". Share transfer tax and stamp duties No Danish share transfer tax or stamp duties are payable on transfer of the shares. Withholding tax obligations An issuer of shares is subject to Danish withholding tax obligations in accordance with applicable Danish laws. Certain United States Federal Income Tax Considerations The following is a description of certain U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of Shares, but it does not purport to be a comprehensive description of 212 --- all of the tax considerations that may be relevant to a particular person's decision to acquire Shares. This discussion applies only to a U.S. Holder that acquires Shares in this offering and holds them as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of the U.S. Holder's particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), known as the Medicare contribution tax and tax consequences applicable to U.S. Holders subject to special rules, such as: - certain financial institutions; - dealers or certain traders in securities; - persons holding Shares as part of a straddle, conversion transaction or similar transactions; - persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; - partnerships or other entities classified as partnerships for U.S. federal income tax purposes; - tax-exempt entities; - persons that own or are deemed to own 10% or more of the Company's stock by vote or value; or - persons holding Shares in connection with a trade or business conducted outside of the United States. If an entity that is classified as a partnership for U.S. federal income tax purposes owns Shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships owning Shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of the Shares. This discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations, and the income tax treaty between Denmark and the United States (the "Treaty"), all as of the date hereof, any of which is subject to change, possibly with retroactive effect. A "U.S. Holder" is a person that, for U.S. federal income tax purposes, is a beneficial owner of Shares, is eligible for the benefits of the Treaty and is: - an individual who is a citizen or resident of the United States; - a corporation, or other entity taxable as a corporation, created or organised in or under the laws of the United States, any state therein or the District of Columbia; or - an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of Shares in their particular circumstances. Except as described below, this discussion assumes that the Company is not, and will not become, a "passive foreign investment company" ("PFIC"). ## Certain reporting obligations If a U.S. Holder purchases Shares in this offering for a price in excess of US$100,000 (or the equivalent in foreign currency), the U.S. Holder must file Internal Revenue Service Form 926 for the U.S. Holder's taxable year in which the purchase occurs. Failure by a U.S. Holder to timely comply with such reporting requirements may result in substantial penalties. ## Taxation of Distributions Distributions paid on Shares, other than certain pro rata distributions of ordinary shares, will be treated as dividends to the extent paid out of the Company's current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because the Company does not maintain calculations of its earnings and profits under U.S. federal income tax principles, it is expected that any distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be taxable at a rate lower than the rates applicable to ordinary income. Non-corporate U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their particular circumstances. 213 --- The amount of a dividend will include any amounts withheld by the Company in respect of Danish income taxes. Dividends will be treated as foreign-source income to U.S. Holders and will not be eligible for the dividends-received deduction generally allowed to U.S. corporations under the Code. Dividends will generally be included in a U.S. Holder's income on the date of the U.S. Holder's receipt of the dividend. The amount of any dividend paid in Danish kroner will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognise foreign currency gain or loss in respect of the amount received. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt, and any such gain or loss will be U.S.-source ordinary income or loss. U.S. Holders should consult their tax advisers regarding the possible recognition of foreign currency gain or loss in respect of any amount of Danish taxes received as a refund from the Danish tax authorities after the date of distribution (See “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—individuals” and “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—companies”.) Subject to applicable limitations, some of which vary depending upon the U.S. Holder's circumstances, non-refundable Danish income taxes withheld from dividends on Shares at a rate not exceeding the applicable rate provided by the Treaty will be creditable against the U.S. Holder's U.S. federal income tax liability. Danish income taxes withheld in excess of the rate applicable under the Treaty will not be eligible for credit against a U.S. Holder's federal income tax liability. See “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—individuals” and “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—companies” for a discussion of how to obtain the applicable Treaty rate or a refund of Danish taxes withheld in excess of the applicable Treaty rate. Foreign taxes eligible for credit are calculated separately with respect to specific classes of foreign source income. For this purpose, dividends paid by the Company on the Shares generally will constitute “passive category income” or in certain cases “general category income”. The rules governing foreign tax credits are complex, and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct foreign taxes, including the Danish tax, in computing their taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year. ## Sale or Other Taxable Disposition of Shares For U.S. federal income tax purposes, gain or loss realised on the sale or other taxable disposition of Shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the Shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder's tax basis in the Shares disposed of and the amount realised on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. Non-corporate U.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-term capital gains at preferential rates. The deductibility of capital losses is subject to limitations. ## Passive Foreign Investment Company Rules In general, a foreign corporation will be a PFIC for any taxable year in which (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. If a corporation owns at least 25% (by value) of the stock of another corporation, the corporation will be treated, for purposes of the PFIC tests, as owning its proportionate share of the 25%-owned corporation's assets and receiving its proportionate share of the 25%-owned corporation's income. “Passive income” generally includes interest, dividends, rents and royalties (other than certain rents and royalties derived in the active conduct of a trade or business) and certain gains. The Company does not expect to be a PFIC for U.S. federal income tax purposes for its current taxable year or in the foreseeable future. However, because PFIC status depends on the composition of the Company's income and assets and the market value of its assets, including goodwill, from time to time (which may be determined, in part, by reference to the market price of the Shares), there can be no assurance that the Company will not be a PFIC for any taxable year. In general, if the Company were a PFIC for any taxable year during which a U.S. Holder held Shares, gain recognised by the U.S. Holder on a sale or other disposition (including certain pledges) of Shares, and income from certain “excess distributions,” would be allocated ratably over the U.S. Holder's holding period for the 214 --- Shares. The amounts allocated to the taxable year of the sale or other disposition or the receipt of excess distribution and to any year before the Company became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as applicable, for that taxable year, and an interest charge would be imposed on the resulting tax liability with respect to each such taxable year. Certain elections may be available that would result in alternative treatments (such as a mark-to-market treatment) of the Shares. U.S. Holders should consult their tax advisers to determine whether any of these elections would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances. If the Company were a PFIC for any taxable year during which a U.S. Holder owns Shares, the Company will generally continue to be treated as a PFIC with respect to the U.S. Holder for all succeeding years during which the U.S. Holders owns the Shares, even if the Company ceases to meet the threshold requirements for PFIC status. Furthermore, if the Company were a PFIC for the taxable year in which it paid a dividend or the prior taxable year, the reduced rate discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply. If the Company were a PFIC, a U.S. Holder would also be subject to annual information reporting requirements. U.S. Holders should consult their tax advisers regarding the application of the PFIC rules to their investment in the Shares. ## Information Reporting and Backup Withholding Payments of dividends and proceeds from the sale or other taxable disposition of Shares that are made within the United States or through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding, unless (i) the U.S. Holder is a corporation or other "exempt recipient" or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the Internal Revenue Service. ## Foreign Financial Assets Reporting Certain U.S. Holders who are individuals (and certain specified or non-U.S. financial accounts through which the Shares are held) may be required to report information relating to the Shares. U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership and disposition of the Shares. 215 --- 216 # THE OFFERING ## Joint Global Coordinators The Offering is being arranged by Danske Bank A/S, Deutsche Bank AG, London Branch and Morgan Stanley & Co. International plc in their capacity as Joint Global Coordinators and Joint Bookrunners and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as Joint Bookrunner. ## The Offering The Offering consists of: (i) an initial public offering to retail and institutional investors in Denmark; (ii) a private placement in the United States to persons who are “qualified institutional buyers” or “QIBs” (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A; and (iii) private placements to institutional investors in the rest of the world. The Offering outside the United States will be made in compliance with Regulation S under the U.S. Securities Act. The Selling Shareholders are offering 20,000,000 Offer Shares, excluding any Shares subject to the Overallotment Option. The Significant Shareholders have agreed to grant the Joint Global Coordinators, on behalf of the Managers, an Overallotment Option to purchase up to 3,000,000 Option Shares at the Offer Price, exercisable, in whole or in part, from the date of Admission until 30 calendar days thereafter, solely to cover overallotments or short positions, if any, incurred in connection with the Offering. See “Plan of Distribution”. The Significant Shareholders are offering between 8,753,013 and 8,878,762 Offer Shares, excluding any Shares subject to the Overallotment Option and between 11,753,013 and 11,878,762 Offer Shares, including all Shares subject to the Overallotment Option. André Rogaczewski Holding ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Holdingselskabet Claus Jørgensen ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Carsten Gomard Holding ApS is offering between 879,209 and 880,031 Offer Shares, NC NorthCo AB is offering between 1,501,921 and 1,523,498 Offer Shares, Danica Pension, Livsforsikringsaktieselskab is offering between 842,262 and 1,029,431 Offer Shares and the MIP Participants and Employee Shareholders are offering between 4,452,740 and 4,471,735 Offer Shares. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. Each of the Selling Shareholders will sell a number of Shares pro rata to their relative ownership of the Company, following completion of the IPO Reorganisation, but prior to Admission. The exact number of Shares to be held by each Selling Shareholder, following completion of the IPO Reorganisation, will be determined on the basis of the final Offer Price, as part of the IPO Reorganisation. See “Reorganisation”. ## Offer Price The Offer Price will be determined through a book-building process. Book-building is a process in which the Joint Global Coordinators, prior to the final pricing of the Offering, determine the Offer Price by collecting expressions of interest in the Offer Shares from potential institutional investors. Following the book-building process, the Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, the Board of Directors and the Joint Global Coordinators. The Offer Price is expected to be announced through Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. The Offer Price is free of brokerage charges and is expected to be between DKK 135 and DKK 165 per Offer Share. This indicative Offer Price Range has been set by the Significant Shareholders in consultation with the other Selling Shareholders, the Board of Directors and the Joint Global Coordinators, taking into account, among other things, the Company's historic and projected revenue and earnings, the Company's objective to establish an orderly after market in the Offer Shares and prevailing market conditions. It is currently expected that the Offer Price will be set within the Offer Price Range. If the Offer Price Range is adjusted, the Company will make an announcement through Nasdaq Copenhagen and publish a supplement to this Offering Circular. Following publication of such supplement, investors who have submitted orders to --- purchase Offer Shares in the Offering will have two trading days to withdraw their purchase offer. In such an event, the announcement of the final Offer Price will not be published until the period for exercising such withdrawal rights has ended. See also “—Investors’ Withdrawal Rights”. ## Offer Period The Offer Period will commence on 23 May 2018 and will close no later than 6 June 2018 at 11:00 a.m. (CET). The Offer Period may be closed prior to 6 June 2018; however, the Offer Period will not be closed in whole or in part before 1 June 2018 at 00:01 a.m. (CET). If the Offering is closed before 6 June 2018, the announcement of the Offer Price, allocation and the Admission may be moved forward accordingly. The Offer Period in respect of applications for purchases of amounts up to, and including, DKK 3 million may be closed before the remainder of the Offering is closed. Any such earlier closing, in whole or in part, will be announced through Nasdaq Copenhagen. ## Submission of Bids ### Applications to purchase for amounts of up to and including DKK 3 million Applications by Danish investors to purchase for amounts of up to and including DKK 3 million should be made by submitting the application form enclosed in the English Language Prospectus to the investor’s own account holding bank during the Offer Period or such shorter period as may be announced through Nasdaq Copenhagen. Applications are binding and cannot be altered or cancelled. Bids may be made at a maximum price per Offer Share in Danish kroner. If the Offer Price exceeds the maximum price per Offer Share stated in the application form, then no Offer Shares will be allocated to the investor. Where no maximum price per share has been indicated, applications will be deemed to be made at the Offer Price. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. Applications should be made for a number of Offer Shares or for an aggregate amount rounded down to the nearest Danish kroner amount. Only one application will be accepted from each account in VP Securities. For binding orders, the application form must be submitted to the investor’s own account holding bank in complete and executed form in due time to allow the investor’s own account holding bank to process and forward the application to ensure that it is in the possession of Danske Bank A/S, no later than 11:00 a.m. (CET) on 6 June 2018, or such earlier time at which the Offering is closed. ### Applications to purchase for amounts of more than DKK 3 million Investors who wish to apply to purchase for amounts of more than DKK 3 million can indicate their interest to one or more of the Managers during the Offer Period. During the Offer Period, such investors can continuously change or withdraw their declarations of interest, but these declarations of interest become binding applications at the end of the Offer Period. Immediately following the determination of the Offer Price, investors will be allocated a number of Offer Shares at the Offer Price within the limits of the investor’s most recently submitted or adjusted declaration of interest. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. ### Minimum and Maximum Purchase Amounts The minimum purchase amount is one Offer Share. No maximum purchase amount applies to the Offering. However, the number of shares is limited to the number of Offer Shares in the Offering. ### Allocation and Reduction In the event that the total number of Shares applied for in the Offering exceeds the number of Offer Shares, reductions will be made as follows: - With respect to applications for amounts of up to and including DKK 3 million, reductions will be made mathematically. - With respect to applications for amounts of more than DKK 3 million, individual allocations will be made. The Joint Global Coordinators will allocate the Offer Shares after agreement upon such allocations with the Selling Shareholders and the Board of Directors. - Up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) will be reserved for Danske Bank A/S to purchase for the purpose of ensuring delivery to the Company pursuant to the LTIP Equity Swap, see also “The Board of Directors, Executive Management and Key Employees—Incentive Programmes”. 217 --- It is expected that the result of the Offering, the Offer Price and the basis of the allocation will be announced through Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. If the Offer Period is closed before 6 June 2018, announcement of the Offer Price and allocation will be brought forward accordingly. Following the expiration of the Offer Period, investors will receive a statement indicating the number of Offer Shares allocated, if any, and the equivalent value at the Offer Price unless otherwise agreed between the investor and the relevant account holding bank. Orders as well as indications of interest may not result in an allocation of Offer Shares. If the total applications in the Offering exceed the number of Offer Shares, a reduction will be made. In such event, the Joint Global Coordinators reserve the right to require documentation to verify that each application relates to a single account in VP Securities. Further, the Joint Global Coordinators reserve the right to require documentation to verify the authenticity of all orders, to demand the name of each purchaser, to pass on such information to the Company and the Selling Shareholders, and to make individual allocations if there are several orders that are determined to have originated from the same investor. To the extent several orders are determined to have originated from the same investor, only the largest order in Danish kroner will be taken into consideration and all other orders will be rejected. ## Trading and Official Listing on Nasdaq Copenhagen Application has been made for the Shares to be admitted to trading and official listing under the symbol "NETC" on Nasdaq Copenhagen. The Admission is subject to, among other things, completion of the IPO Reorganisation, Nasdaq Copenhagen's approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to the settlement of the Offering and the Company making an announcement to that effect. The Shares are expected to be admitted to trading and official listing on Nasdaq Copenhagen under the permanent ISIN on 7 June 2018. If the Offering is closed before 6 June 2018, the Admission, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. Payment for and settlement of the Offer Shares are expected to take place on or around 11 June 2018. If the Offering is not completed, no Offer Shares will be delivered to investors. Consequently, any trades in the Shares effected on or off the market before settlement of the Offering may subject investors to liability for not being able to deliver the Shares sold and investors who have sold or acquired Shares on or off the market may incur a loss. Any such dealings will be at the sole risk of the parties concerned. If the Offering is terminated or withdrawn prior to settlement, the Offering and any associated arrangements will lapse, all submitted orders will be automatically cancelled, any monies received in respect of the Offering will be returned to the investors without interest (less any transaction costs) and admission to trading and official listing of the Shares on Nasdaq Copenhagen will be cancelled. Consequently, any trades in the Shares effected on or off the market before settlement of the Offering may subject investors to liability for not being able to deliver the Shares sold, and investors who have sold or acquired Shares on or off the market may incur a loss. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. ## Identification Permanent ISIN for the Shares: DK0060952919. Nasdaq Copenhagen Symbol for the Shares: "NETC". ## Share Lending Agreement The Significant Shareholders have, pursuant to a Share Lending Agreement, agreed with the Joint Global Coordinators to make available up to 3,000,000 Shares for purposes of delivery of the Offer Shares to investors in connection with the Overallotment Option. The Shares made available by the Significant Shareholders shall be redelivered by the Joint Global Coordinators, no later than following the expiry of the Overallotment Option. No costs, interest or other payments shall be made by the Group as a result of the Share Lending Agreement or the Overallotment Option, if exercised. 218 --- 219 # Registration and Settlement The Offer Shares will be registered in book-entry form electronically with VP Securities, Weidekampsgade 14, P.O. Box 4040, 2300 Copenhagen S, Denmark. All Shares are registered on accounts with account holding banks in VP Securities. Investors that are not residents of Denmark may use a Danish bank directly or their own bank's Danish correspondent bank as their account holding bank or arrange for registration and settlement through Clearstream, 42 Avenue JF Kennedy, L-1855 Luxembourg, Luxembourg, or Euroclear, 1, Boulevard du Roi Albert II, B-1210 Brussels, Belgium. Payment for and settlement of the Offer Shares are expected to take place on 11 June 2018 (i.e. the Settlement Date), by way of delivery of Shares against payment in immediately available funds in Danish kroner in book-entry form to investors' accounts with VP Securities and through the facilities of Euroclear and Clearstream. If the Offering is closed before 6 June 2018, the Settlement Date, the delivery of Shares and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. The account holding bank will normally send a statement to the name and address registered in VP Securities showing the number of Offer Shares purchased for by the investor unless otherwise agreed between the investor and the relevant account holding bank. This statement also constitutes evidence of the investor's holding. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. # Withdrawal of the Offering Completion of the Offering is conditional upon the Offering not being withdrawn. The Offering may be withdrawn by the Company, the Selling Shareholders and the Joint Global Coordinators at any time before pricing and allocation of the Offering and first day of trading and official listing of the Shares on Nasdaq Copenhagen take place. The Offering may also be withdrawn if Nasdaq Copenhagen is not satisfied that there will be a sufficiently broad distribution of the Shares to investors or if, for other reasons, the Shares cannot be admitted for trading and/or official listing on Nasdaq Copenhagen. In addition, the Underwriting Agreements contain a provision entitling the Joint Global Coordinators, but not the Company, to terminate the Offering (and the arrangements associated with it) at any time prior to settlement of the Offering by delivery, and payment for the Offer Shares expected on or around 11 June 2018 (including after Admission) in certain circumstances, including force majeure and material changes in the financial condition of the Group's business. The termination rights of the parties to the Underwriting Agreements will lapse upon settlement of the Offering, currently expected to take place on 11 June 2018, except in respect of the Option Shares. The termination rights of the parties to the Underwriting Agreements shall lapse, in respect of the Option Shares, upon settlement of the sale of the Option Shares, if the Overallotment Option is exercised. Nasdaq Copenhagen's approval of the Admission on Nasdaq Copenhagen is subject to such termination rights not being exercised after pricing and prior to settlement of the Offering (excluding any termination rights in respect of the Overallotment Option). The Underwriting Agreements contain closing conditions which the Company believes are customary for offerings such as the Offering. In addition, the Company and the Selling Shareholders have given usual representations and warranties to the Managers. The completion of the Offering is dependent on compliance with all of the closing conditions set forth in the Underwriting Agreements. If one or more closing conditions are not met, the Managers may, at their discretion, withdraw the Offering. If the Offering is terminated or withdrawn prior to settlement: the Offering and any associated arrangements will lapse, all submitted orders will be automatically cancelled, any monies received in respect of the Offering will be returned to the investors without interest (less any transaction costs) and admission to trading and official listing of the Shares on Nasdaq Copenhagen will be cancelled. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. Any withdrawal of the Offering will be announced immediately through Nasdaq Copenhagen. --- 220 # Investors' Withdrawal Rights In the event that the Company is required to publish a supplement to this Offering Circular, between the date of publication of this Offering Circular and Admission, investors who have submitted orders to purchase Offer Shares in the Offering shall have two trading days following the publication of the relevant supplement within which the investors can withdraw their offer to purchase Offer Shares in the Offering in its entirety. The right to withdraw an application to purchase Offer Shares in the Offering in these circumstances will be available to all investors in the Offering, provided the obligation to publish a supplement to this Offering Circular was triggered before the Admission and provided no Offer Shares have been delivered. If the order is not withdrawn within the stipulated period any order to purchase Offer Shares in the Offering will remain valid and binding. # Costs of the Offering The total expenses in relation to the Offering payable by the Group to the Managers, other advisor fees and expenses and fees related to the Refinancing, are estimated to be approximately DKK 50 million, of which 17.5 million were expensed in the financial year ended 2017. In addition, certain expenses in relation to the Offering, including commissions and fees (fixed and discretionary) to be paid to the Managers, are payable by the Selling Shareholders based proportionately on the numbers of Offer Shares that are sold in the Offering. Further, the Selling Shareholders have agreed to pay a selling commission to account holding banks (unless such account holding bank is a Manager) equivalent to 0.25% of the Offer Price of the Offer Shares that are allocated in respect of orders of up to and including DKK 3 million submitted through the account holding banks (except for the Managers) to be paid proportionally by the Selling Shareholders based on the number of Offer Shares, respectively, that are sold. None of the Company, the Selling Shareholders or the Managers will charge expenses to investors. Investors will have to bear customary transaction and handling fees charged by their account holding banks. # Selling Agents for the Danish Offering Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark A request for copies of the English Language Prospectus may be submitted by persons who satisfy the requirements of the applicable selling restrictions from: Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark E-mail: [email protected] Tel.: +45 70 23 08 34 In addition, the English Language Prospectus is available, subject to certain restrictions, on the Company's website (www.netcompany.com). Information included on the Company's website does not form part of and is not incorporated into this Offering Circular. The distribution of this Offering Circular and the offer or sale of the Offer Shares in certain jurisdictions are restricted by law. Persons possessing this Offering Circular are required by the Company, the Selling Shareholders and the Managers to inform themselves about and to observe any restrictions. This Offering Circular does not constitute an offer to sell or a solicitation of an offer to buy any of the Offer Shares in any jurisdiction to any person to whom it would be unlawful to make such an offer in such jurisdiction. # Interests of Natural and Legal Persons Involved in the Offering As described in "Board of Directors, Executive Management and Key Employees—Statement on Conflicts of Interest" and in "Ownership Structure and Selling Shareholders", certain members of the Board of Directors as well as the Executive Management and the Key Employee will be shareholders, directly or indirectly, in the Company following completion of the IPO Reorganisation or hold economic interests therein and therefore have an interest in the Offering. The Executive Management and the Key Employee will, subject to completion of the --- Offering, participate in certain share-based incentive programmes as described in “Board of Directors, Executive Management and Key Employees—Incentive programmes” and therefore have a direct economic interest in the Offering. No member of the Board of Directors or Executive Management, directly or indirectly, hold more than 5% of the Company’s share capital except for André Rogaczewski, CEO and Claus Jørgensen, COO, who will, through their respective holding companies, own 8.5% and 8.5% respectively of the share capital in the Company (assuming an Offer Price at the midpoint of the Offer Price Range), following completion of the IPO Reorganisation, but prior to Admission. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation and will be governed by a shareholders’ agreement. In addition, the Key Employee will, through his holding company, own 7.6%, of the share capital in the Company, following completion of the IPO Reorganisation. See also “Plan of Distribution” for a description of certain interests of the Managers in the Offering. The Company is not aware of any other potential interest of natural or legal persons involved in the Offering who may have a material interest in the Offering. ## Governing Law The Shares are issued in accordance with Danish law. 221 --- 222 # THE DANISH SECURITIES MARKET Set forth below is a summary of certain information concerning the Danish securities market including information on certain provisions of Danish law and Danish securities market regulations in effect on the date of this Offering Circular. Such summary is qualified in its entirety by reference to the applicable Danish law and securities market regulations. ## Nasdaq Copenhagen Nasdaq Copenhagen is a company incorporated and organised under the laws of Denmark. Trading on Nasdaq Copenhagen is conducted by authorised firms, which include major Danish banks and other securities brokers, as well as certain mortgage credit institutions and the Danish Central Bank. The trading system for equities trading in Denmark on Nasdaq Copenhagen operates between 9:00 a.m. and 4:55 p.m. (CET) on weekdays. After the end of the continuous trading there is a pre-closing call between 4:55 p.m. to 5:00 p.m. (CET). An after trade "post trade" session exists from 5:00 p.m. to 5:20 p.m. (CET). Before the continuous trading begins, there is a second after trade "pre-open" session from 8:00 a.m. to 9:00 a.m. (CET) and a morning call session from 8:45 a.m. to 9:00 a.m. (CET) for the purpose of establishing fair opening prices. After the opening prices have been presented, the continuous trading begins. ## Registration Process In connection with an initial public offering, a company's shares are registered in book-entry form on accounts maintained in the computer system of VP Securities, which acts as an electronic central record of ownership and as the clearing centre for all transactions in Denmark. The address of VP Securities is Weidekampsgade 14, P.O. Box 4040, 2300 Copenhagen S, Denmark. Danish financial institutions, such as banks, are authorised to keep accounts for each specific investor with VP Securities, including for Euroclear and Clearstream. All Danish shares listed on Nasdaq Copenhagen are dematerialised, "non-certificated" and registered at VP Securities. The account is maintained through an account holding bank. The account holding bank has the exclusive right to make transactions and registrations on these accounts on behalf of its customers. Shares shall be registered in the name of the holder through the account holding bank. ## Nominees An account may be kept on behalf of one or more owners, meaning that a shareholder may appoint a nominee. A nominee shareholder is entitled to receive dividends and to exercise all subscription and other financial and administrative rights attached to the shares held in its name with VP Securities. The relationship between the nominee shareholder and the beneficial owner is regulated solely by an agreement between the parties, and the beneficial owner must disclose its identity if any of the aforementioned rights are to be exercised directly by the beneficial owner. The right to appoint a nominee does not eliminate a shareholder's obligation to notify the Company and the Danish Financial Supervisory Authority (the "Danish FSA") of a major shareholding. See "Disclosure of Major Shareholdings" below. ## Settlement Process Settlement in connection with trading on Nasdaq Copenhagen normally takes place on the second business day after effecting a sale or purchase transaction. On behalf of VP Securities, the account holding bank sends a statement to the name and address recorded in VP Securities, showing the amount of shares held in that name, which provides the holder with evidence of its rights. Settlement can also take place through the clearing facilities of Euroclear and Clearstream. --- # Disclosure of Major Shareholdings Shareholders in Danish companies with shares admitted to trading and official listing on Nasdaq Copenhagen are, pursuant to Section 38 of the Danish Capital Markets Act, required to give simultaneous notice to the company and the Danish FSA of the shareholding in the company, when the shareholding reaches, exceeds or falls below thresholds of 5%, 10%, 15%, 20%, 25%, 50% or 90% and limits of one-third or two-thirds of the voting rights or nominal value of the total share capital. A shareholder in a company means a natural or legal person who, directly or indirectly, holds: (i) shares in the company on behalf of himself and for his own account; (ii) shares in the company on behalf of himself, but for the account of another natural or legal person; or (iii) depository receipts, where such holder is considered a shareholder in relation to the underlying shares represented by the depository receipts. The duty to notify set forth above further applies to natural and legal persons who are entitled to acquire, sell or exercise voting rights which are: (i) held by a third party with whom that natural or legal person has concluded an agreement, which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the issuer in question (common duty to inform for all parties to the agreement); (ii) held by a third party under an agreement concluded with that natural or legal person providing for the temporary transfer of the voting rights in question in return for consideration; (iii) attached to shares which are lodged as collateral for that natural or legal person, provided the person controls the voting rights and declares an intention of exercising them; (iv) attached to shares in which that natural or legal person has a lifelong right of disposal; (v) held, or may be exercised within the meaning of (i) to (iv), by an undertaking controlled by that person or entity; (vi) attached to shares deposited with that natural or legal person and which the person can exercise at his own discretion in the absence of specific instructions from the shareholders; (vii) held by a third party in its own name on behalf of that person; or (viii) exercisable by that person through a proxy where that person may exercise the voting rights at his discretion in the absence of specific instructions of the shareholder. The duty to notify set forth above also applies to anyone, who directly or indirectly holds (a) financial instruments that afford the holder either an unconditional right to acquire or the discretion as to his right to acquire existing shares (e.g., share options); and/or (b) financial instruments based on existing shares and with an economic effect equal to that of the financial instruments mentioned in (a), regardless of them not affording the right to purchase existing shares (e.g., cash-settled derivatives linked to the value of the shares in question). Holding these kinds of financial instruments counts towards the thresholds mentioned above and may thus trigger a duty to notify by themselves or when accumulated with a shareholding. The notification shall be made promptly but not later than four weekdays after the shareholder was aware or should have become aware of the completion of the transaction, and in accordance with the provisions of Danish Executive Order no. 1172 of 31 October 2017 on Major Shareholders (the "Danish Executive Order on Major Shareholders"). The shareholder is deemed to have become aware of the completion of the transaction two weekdays after the completion of the transaction. The shareholder shall disclose the change in voting rights and shares, including the number of voting rights (and the division of voting rights between share classes, if applicable) and shares held directly or indirectly by the shareholder following the transaction. The notification shall further state the transaction date on which the threshold was reached or no longer reached and the identity of the shareholder as well as the identity of any natural or legal person with the right to vote on behalf of the shareholder and in the case of a group structure, the chain of controlled undertakings through which voting rights are effectively held. The information shall be notified to the company and simultaneously submitted electronically to the Danish FSA. Failure to comply with the notification requirements is punishable by fine or suspension of voting rights in instances of gross or repeated non-compliance. When an obligation to notify rests on more than one natural or legal person, the notification may be made through a joint notification. However, use of a joint notification does not exempt the individual shareholders or natural or legal persons from their responsibilities in connection with the obligation to notify or the contents of the notification. After receipt of the notification, but not later than three weekdays thereafter, the company shall publish the contents of the notification. 223 --- A similar duty, as set forth above, to publish major shareholdings also applies to a company's holding of treasury shares. A Danish company with shares admitted to trading and official listing on Nasdaq Copenhagen is required to promptly, but not later than four weekdays thereafter, publish an announcement specifying the company's, direct or indirect, holding of treasury shares, when the holding reaches, exceeds or falls below the thresholds of 5% or 10% of the voting rights or the nominal value of the share capital. This duty applies regardless of whether the company holds the treasury shares itself or through a person acting in his own name but on the company's behalf. Furthermore, the general duty of notification under Section 55 of the Danish Companies Act in respect of notification of significant holdings (similar to the thresholds set out in the Danish Capital Markets Act Section 38) applies, including when the limit of 100% of the share capital's voting rights or nominal value of the company is reached or are no longer reached. Section 58 of the Danish Companies Act provides that a company shall publish information related to major shareholdings received pursuant to Section 55 of the Danish Companies Act in an electronic public register of shareholders which is kept by the Danish Business Authority. ## Short Selling The Short Selling Regulation (236/2012/EU) includes certain notification requirements in connection with short selling and imposes restrictions on uncovered short selling of shares admitted to trading on a trading venue (including Nasdaq Copenhagen). When a natural or legal person reaches or falls below a net short position of 0.2% of the issued share capital of a company that has shares admitted to trading on a trading venue, such person shall notify the relevant competent authority, which in Denmark is the Danish FSA. The obligation to notify, moreover, applies in each case where the net short position reaches or falls below each 0.1% threshold above the 0.2% threshold. In addition, when a natural or legal person reaches or falls below a net short position of 0.5% of the issued share capital of a company that has shares admitted to trading on a trading venue and each 0.1% threshold above that, such person shall make a public announcement of its net short position. A natural or legal person is prohibited from entering into a short sale of shares admitted to trading on a trading venue unless one of the following conditions is satisfied: (i) the natural or legal person has borrowed the share or has made alternative provisions resulting in a similar legal effect; (ii) the natural or legal person has entered into an agreement to borrow the share or has another absolutely enforceable claim under contract or property law to be transferred ownership of a corresponding number of securities of the same class so that settlement can be effected when it is due; or (iii) the natural or legal person has an arrangement with third party under which that third party has confirmed that the share has been located and has taken measures vis-à-vis third parties necessary for the natural or legal person to have a reasonable expectation that settlement can be effected when it is due. Certain exemptions apply to the prohibition, such as in the case of market-makers or in connection with stabilisation in accordance with the Commission Delegated Regulation (EU) 2016/1052 (the "Safe Harbour Regulation"). ## Mandatory Tender Offers The Danish Capital Markets Act (Part 8) and the Danish Executive Order no. 1171 of 31 October 2017 on Takeover Bids (the "Danish Executive Order on Takeover Bids"). Includes rules concerning public offers for the acquisition of shares admitted to trading on a regulated market (including Nasdaq Copenhagen). If a shareholding is transferred, directly or indirectly, in a company with one or more share classes admitted to trading on a regulated market, to an acquirer or to persons acting in concert with such acquirer, the acquirer and the persons acting in concert with such acquirer, if applicable, shall give all shareholders of the company the option to dispose of their shares on identical terms, if the acquirer or the persons acting in concert with such acquirer gains control over the company as a result of the transfer. Control as mentioned above exists if the acquirer or persons acting in concert with such acquirer, directly or indirectly, holds at least one-third of the voting rights in the company, unless it can be clearly proven in special cases that such ownership does not constitute control. An acquirer or persons acting in concert with such acquirer who does not hold at least one-third of the voting rights in a company, nevertheless has control when the acquirer has or persons acting in concert with such acquirer have: - the right to control at least one-third of the voting rights in the company according to an agreement with other investors; or - the right to appoint or dismiss a majority of the members of the central governing body. 224 --- Voting rights attached to treasury shares shall be included in the calculation of voting rights. The Danish Capital Markets Act contains specific exemptions from the obligation to submit a mandatory takeover offer, including transfers of shares by inheritance or transfer within the same group and as a result of a creditor's debt enforcement proceedings Exemptions from the mandatory tender offer rules may be granted under special circumstances by the Danish FSA. ## Mandatory Redemption of Shares Where a shareholder holds more than 90% of the shares in a company and a corresponding proportion of the voting rights, such shareholder may, pursuant to the Danish Companies Act, Section 70, decide that the other shareholders have their shares redeemed by that shareholder. In this case, the other shareholders must be requested, under the rules governing notices for general meeting, to transfer their shares to the shareholder within four weeks after the request to transfer their shares. In addition, the other shareholders shall through the Danish Business Authority's IT system be requested to transfer their shares within the same four-week period. Specific requirements apply to the contents of the notices to the other shareholders regarding the redemption. If the redemption price cannot be agreed upon, the redemption price must be determined by an independent expert appointed by the court in the jurisdiction of the company's registered office in accordance with the provisions of the Danish Companies Act. However, the redemption price will be deemed fair under any circumstances, provided that (i) the redemption takes place in continuation of a voluntary tender offer by which the bidder obtained at least 90% of the voting rights, or (ii) the redemption takes place after a mandatory tender offer. To the extent any minority shareholders have not transferred their shares to the acquiring shareholder before the expiry of the four-week period, the redeeming shareholder shall, as soon as possible thereafter, deposit the amount required for redemption for the benefit of such minority shareholders. Upon the deposit, such minority shareholders will have been redeemed and the minority shareholders shall in such case through the Danish Business Authority's IT system be notified that the right to require determination of the redemption price by the independent expert expires at the end of a period, which cannot be less than three months pursuant to the Danish Companies Act, Section 72. Furthermore, where a shareholder holds more than 90% of the shares in a company and a corresponding proportion of the voting rights, the other shareholders may require such shareholder to acquire their shares pursuant to Section 73 of the Danish Companies Act. If the redemption price cannot be agreed upon, the redemption price must be determined by an independent expert appointed by the court in the jurisdiction of the company's registered office in accordance with the provisions of the Danish Companies Act. Expenses relating to the determination of the redemption price must be paid by the shareholder requesting such determination. If the valuation is higher than that offered by the redeeming shareholder, the court may order the redeeming shareholder to pay the expenses relating to determination of the redemption price in full or in part. ## Disclosure Requirements for Companies Admitted to Trading and Official Listing on Nasdaq Copenhagen As a company with its securities admitted to trading on a regulated market, the Company will under Regulation (EU) no. 596/2014 on Market Abuse (the "Market Abuse Regulation") and the Issuer Rules of Nasdaq Copenhagen be obliged to inform the public and the Danish FSA of inside information, as defined in Article 7 of the Market Abuse Regulation, as soon as possible if such information directly concerns the Company. Inside information must be disclosed as soon as possible unless the Company is in a position to delay such disclosure to the public with reference to Article 17(4) of the Market Abuse Regulation. In addition, the Company will be obliged to disclose certain other information to the public pursuant to the Danish Capital Markets Act, the Danish Executive Order no. 1173 of 31 October 2017 on an Issuers' Duty to Provide Information (the "Danish Executive Order on Issuers' Duty to Provide Information") and the Issuer Rules of Nasdaq Copenhagen, regardless of whether this information amounts to inside information. Information which would have to be disclosed under these rules includes, for example: (i) changes to the Board of Directors, Executive Management and auditors; (ii) decisions to introduce incentive schemes; (iii) substantial changes in business activities; (iv) material acquisitions and divestments; (v) unexpected and significant deviations in the Company's financial result or position; (vi) proposed changes in the capital structure; and (vii) annual and interim reports and accounts. Furthermore, the Company will be required to make sure that no unauthorised person gains access to inside information prior to its publication to the market. 225 --- PLAN OF DISTRIBUTION ## The Offering In connection with the Offering, two separate underwriting agreements are expected to be entered into, between respectively (i) the Company, certain of the Selling Shareholders and the Managers and (ii) the Company, certain of the Selling Shareholders and Danske Bank A/S. Each such underwriting agreement are expected to be entered into immediately prior to Admission which is expected to occur on 7 June 2018 (the “Underwriting Agreements”). Subject to certain conditions set forth in the Underwriting Agreements, the Selling Shareholders will agree to sell to the purchasers procured by the Managers or, failing which, to the Managers themselves; and each of the Managers, severally but not jointly, will agree to procure purchasers for, or failing such procurement, to purchase from the Selling Shareholders the percentage of total number of Offer Shares, excluding the LTIP Equity Swap, offered listed opposite such Manager’s name below. \| Managers \| Percentage of Offer Shares \| \| --- \| --- \| \| Danske Bank A/S \| 30% \| \| Deutsche Bank AG, London Branch \| 30% \| \| Morgan Stanley & Co. International Plc \| 30% \| \| Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige \| 10% \| \| Total \| 100% \| The Underwriting Agreements provide that the obligations of the Managers are subject to: (i) receipt of opinions on certain legal matters from counsel; and (ii) certain other conditions, including receipt of auditor letters and reports and officer certificates. Both the Company and the Selling Shareholders have agreed to indemnify the Managers against certain losses and liabilities arising out of or in connection with the Offering, including liabilities under the U.S. Securities Act. The Managers are not required to take or pay for the Option Shares covered by the Managers’ Overallotment Option described below. The Underwriting Agreements provide that, upon the occurrence of certain events, such as the general suspension of all trading on Nasdaq Copenhagen, a material adverse change in the Group’s business, results of operations or financial condition or in the financial markets and under certain other conditions, the Managers may elect to terminate their several commitments and have the right to withdraw from the Offering before settlement of the Offering (i.e. payment for and settlement of the Offer Shares). If the Managers elect to terminate their several commitments, the Offering may be cancelled, and if it is cancelled, no Offer Shares will be delivered. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. Pursuant to the Underwriting Agreements, the Joint Global Coordinators, on behalf of the Managers, have been granted an option to purchase an aggregate of up to an additional 3,000,000 Option Shares from the Significant Shareholders, solely to cover overallotments or short positions, if any, exercisable for a period of 30 calendar days after Admission. If any Option Shares are agreed to be purchased under this option, each Manager will be obligated, subject to certain conditions contained in the Underwriting Agreements, to purchase a number of additional Option Shares proportionate to that Manager’s initial percentage of Offer Shares reflected in the table above, and the Significant Shareholders will be obligated to sell a number of Shares proportionate to the additional Option Shares over which they have granted this option. Purchasers of the Offer Shares may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the Offer Price. Application has been made for the Shares to be admitted to trading and official listing on Nasdaq Copenhagen. The Admission is subject to, among other things, completion of the IPO Reorganisation, Nasdaq Copenhagen’s approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to settlement of the Offering and the Company making an announcement to that effect. The Offer Shares are expected to be delivered on or around 11 June 2018 against payment in immediately available funds in Danish kroner to investors’ accounts with VP Securities and through the facilities of Euroclear and Clearstream. The first day of trading and official listing of the Shares on Nasdaq Copenhagen is expected to be 7 June 2018 provided that the announcement of the Offer Price and allocation has been published through 226 --- Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. As of the date of this Offering Circular, the Company does not hold any treasury shares, but for the purpose of meeting further obligations to deliver Shares under the Company's incentives programmes, the Company may buy Shares in the market at prevailing market price from time to time, see "Board of Directors, Executive Management and Key Employees—Incentive Programmes". For the purpose of delivering Shares to the participants in the Post-IPO LTIP upon vesting of the grant of restricted share units after the first vesting period, the Group has entered into an equity swap allowing the Company, on 15 April 2019, to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) at the Offer Price from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap. The number of Shares which may be purchased by the Company from Danske Banks A/S under the LTIP Equity Swap, will be reserved for Danske Bank A/S to purchase in the Offering. The costs related to the LTIP Equity Swap is expected to be approximately DKK 1 million, which will be expensed over the duration of the LTIP Equity Swap. See also "The Offering—Allocation and Reduction". In connection with the Offering, the Managers and any affiliates acting as investors for their own account may take up the Shares and in that capacity may retain, purchase or sell the Shares, for their own account and may offer or sell such securities otherwise than in connection with the Offering, in each case, in accordance with applicable law. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. No action has been or will be taken in any jurisdiction other than Denmark that would permit a public offering of the Offer Shares, or the possession, circulation or distribution of this Offering Circular or any other material relating to the Company or the Offer Shares, in any jurisdiction where action for that purpose is required. Accordingly, the Offer Shares may not be offered or sold, directly or indirectly, and neither this Offering Circular nor any other offering material or advertisements in connection with the Offer Shares may be distributed or published, in or from any country or jurisdiction, except in compliance with any applicable rules and regulations of such country or jurisdiction. Prior to the Offering, the Shares have never been listed, and there is currently no public market for the Shares. The Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, the Board of Directors and the Joint Global Coordinators, on the basis of a number of factors, including the following: - the orders, in terms of price and quantity, received from potential institutional and retail investors; - prevailing market conditions; - the Group's historical, operational and financial performance; - estimates of the Group's business potential and earning prospects; and - the market valuation of publicly traded common stock of comparable companies. The Offer Price is expected to be announced no later than at 7:30 a.m. (CET) on 7 June 2018. The indicative Offer Price Range set forth on the cover page of this Offering Circular is subject to change as a result of market conditions and other factors. See also "The Offering—Offer Price". There can be no assurance that an active trading market will develop for the Shares or that the Shares will trade in the public market after the Offering at, or above, the Offer Price. See also "Risk Factors—Risks Relating to the Offering". ## Lock-up Arrangements The Company has agreed with the Managers that it will not, except as set forth below, for a period of 180 days from Admission, without the prior written consent of the Managers: (i) issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce such action), directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or otherwise; or (iii) submit to the Company's shareholders a proposal to effect any of the foregoing. 227 --- The foregoing shall not apply to (i) Shares issued in connection with IPO Reorganisation, and (ii) the grant of restricted share units and Shares to the Executive Management and employees of the Company and its subsidiaries in accordance with the terms of the Company’s Post-IPO LTIP. The Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab, have agreed with the Managers that they will not, except as set forth below, for a period of 180 days after Admission, without the prior written consent of the Managers: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce such action), directly or indirectly, any of their Shares, or any securities convertible into or exercisable or exchangeable for such Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Shares, whether any such transactions described in clause (i) or (ii) above are to be settled by delivery of such Shares or such other securities, in cash or otherwise; or (iii) propose any general meeting of the Company, or convene or take action to convene any general meeting for the purpose of proposing, any resolution of the Company authorising the issue of any Shares or warrants to subscribe for Shares. Further, the Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab have agreed with the Managers that they will not publicly announce any intention to enter into any of the transactions mentioned in (i) and (ii). The foregoing shall not apply to: (i) disposal of Shares to their respective related parties, provided that such persons agree to adhere to identical restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) with respect to the Significant Shareholders, the lending of Shares under the Share Lending Agreement (see “The Offering—Share Lending Agreement”); (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of the relevant Selling Shareholder, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such Selling Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the Selling Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; or (viii) sale of subscription rights received in connection with a rights issue. The members of the Board of Directors, Executive Management, the Key Employee and the MIP Participants and Employee Shareholders have agreed with the Managers that, for a period of 360 days from Admission of the Shares, they will be subject to substantially the same restrictions as those of the Company and Selling Shareholders as set forth above. The foregoing shall not apply to: (i) the disposal to their respective (a) spouse, (b) child or (c) any legal entity over which they alone (or together with any other of their respective related parties) have a controlling influence, provided that such persons agree to adhere to similar restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) disposal of Shares in connection with the IPO Reorganisation and/or the Post-IPO Reorganisation, including any disposal required to be made for the purpose of implementing, directly or indirectly, the IPO Reorganisation and/or the Post-IPO Reorganisation; (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of an entity controlled by a member of the Board of Directors, the Executive Management, the Key Employee or the MIP Participants and Employee Shareholders, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such obliged Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the obliged Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) disposal occurring after death, permanent disability or interruption in employment for a continuous period of not less than 16 weeks due to disability or illness; (viii) disposal occurring after termination of employment by the Company (or the relevant employer company in the Group) or resignation from the Board of Directors; (ix) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; (x) sale of subscription rights received in connection with a rights issue; (xi) the transfer of Shares to a personal pension scheme; (xii) with respect to persons comprised by the Post-IPO LTIP, the cancellation of restricted share units, in the event that, the employment relationship with the Group, under certain circumstances, is terminated; and (xiii) with respect to certain of the MIP Participants and Employee Shareholders (holding in the aggregate less than 5% of the total 228 --- outstanding Shares of the Company following completion of the IPO Reorganisation and the Offering) having undertaken to sell their Shares to the Significant Shareholders in the event they are leaving the Group within the first three years after Admission, such sale and transfer to the Significant Shareholders or any transferee appointed by the Significant Shareholders. In addition to the above, each of the Selling Shareholders and the members of the Board of Directors, Executive Management, the Key Employee and MIP Participants and Employee Shareholders shall be entitled to grant security over any Shares held on Admission, subject to the condition that (i) the beneficiary of such security, or (ii) in the event of and enforcement of such security interest, any transferee (whether the beneficiary or a third party) of such shares, shall execute and deliver an adherence to the lock-up undertaking. Further, certain of the MIP Participants and Employee Shareholders have agreed with the Company that, for a period of up to three years from Admission, the Shares they receive as part of the IPO Reorganisation and/or the Post-IPO Reorganisation (which corresponds with all shares in NC TopCo A/S they hold prior to such events) will be subject to certain restrictions and exceptions. Further, these MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders' material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders' employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be held by the MIP Participants and Employee Shareholders comprised by this undertaking. ## Price Stabilisation and Short Positions In connection with the Offering, Danske Bank A/S, as the stabilising manager, or its agents, on behalf of the Managers, may engage in transactions that stabilise, maintain or otherwise affect the price of the Shares for up to 30 days from the Admission. Specifically, the Managers, the Selling Shareholders and the Company have agreed that the stabilising manager on behalf of the Managers may overallot Offer Shares by accepting offers to purchase a greater number of Offer Shares than for which they are obligated to procure purchasers under the Underwriting Agreements, creating a short position. A short sale is covered if the short position is no greater than the number of Offer Shares available for purchase by the stabilising manager on behalf of the Managers under the Overallotment Option. The Managers can close out a covered short sale by exercising the Overallotment Option or purchasing Shares in the open market. In determining the source of Shares to close out a covered short sale, the Managers will consider, among other things, the open market price of Shares compared to the price available under the Overallotment Option. As an additional means of facilitating the Offering, the stabilising manager or its agents may effect transactions to stabilise the price of the Shares. These activities may support the market price of the Offer Shares at a level higher than that which might otherwise prevail. Such transactions may be effected on Nasdaq Copenhagen, in the over-the-counter markets or otherwise. The stabilising manager and its agents are not required to engage in any of these activities, and, as such, there is no assurance that these activities will be undertaken; if undertaken, the stabilising manager or its agents may end any of these activities at any time, and they must be brought to an end at the end of the 30-day period mentioned above. Save as required by law or regulation, the stabilising manager does not intend to disclose the extent of any stabilisation transactions under the Offering. ## Other Relationships The Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities 229 --- related to or issued by the Company, its affiliates or other parties involved in or related to the Offering. Certain of the Managers and their respective affiliates have from time to time engaged in, and may in the future engage in, commercial banking, investment banking and financial advisory transactions and services in the ordinary course of their business with the Company or the Selling Shareholders or any of the Company's or their respective related parties. With respect to certain of these transactions and services, the sharing of information is generally restricted for reasons of confidentiality, internal procedures or applicable rules and regulations. The Managers have received and will receive customary fees and commissions for these transactions and services and may come to have interests that may not be aligned or could potentially conflict with potential investors' and the Company's interests. In particular, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates are lenders under the Group's existing indebtedness. In addition, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates will be a lender under the New Facilities. Furthermore, Danske Bank A/S, Skandinaviska Enskilda Banken AB (publ), Sverige and/or their respective affiliates, have previously received and may in the future receive services provided by the Company. In addition, Danica Pension, Livsforsikringsaktieselskab, one of the Selling Shareholders, is a wholly-owned subsidiary of Danske Bank A/S. Danske Bank A/S is a party to the LTIP Equity Swap, see also "The Board of Directors, Executive Management and Key Employees—Incentive Programmes". In addition, in the ordinary course of business, the Managers and their respective affiliates may make or hold a broad array of investments including serving as counterparties to certain derivative and hedging arrangements and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of the Company. Some of the Managers and/or their respective affiliates may from time to time hold certain direct or indirect minority interests in the Significant Shareholders. The Managers and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. 230 --- 231 # SELLING RESTRICTIONS ## United States The Offer Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States for offer or sale as part of their distribution and may not be offered or sold within the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act. The Offer Shares may only be resold (i) in the United States only to QIBs in reliance on Rule 144A under the U.S. Securities Act; and (ii) outside the United States in offshore transactions in compliance with Regulation S under the U.S. Securities Act and in accordance with applicable law. Any offer or sale of Offer Shares in reliance on Rule 144A will be made by broker-dealers who are registered as such under the U.S. Exchange Act. Terms used above shall have the meanings given to them by Regulation S and Rule 144A under the U.S. Securities Act. ## European Economic Area In relation to each Relevant Member State, no offer of the Offer Shares may be made to the public in that Relevant Member State, except that offers of the Offer Shares may be made under the following exemptions under the Prospectus Directive as implemented in that Relevant Member State: - to any qualified investor as defined in the Prospectus Directive; - to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Joint Global Coordinators for any such offer; or - in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of Offer Shares shall result in a requirement for the publication by the Company or any Manager of a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this paragraph, the expression an “offer of the Offer Shares may be made to the public” in relation to any of the Offer Shares in any Relevant Member State, means the communication in any form and by any means of sufficient information on the terms of the Offering and the Offer Shares to be offered so as to enable an investor to decide to purchase the Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. ## United Kingdom Any offer or sale of the Offer Shares may only be made to persons in the United Kingdom who are “qualified investors” or otherwise in circumstances which do not require publication by the Company of a prospectus pursuant to section 85(1) of the UK Financial Services and Markets Act 2000. This Offering Circular is only being distributed to, and is only directed at, and any investment or investment activity to which this Offering Circular relates is available only to, and will be engaged in only with, persons who: (i) have professional experience in matters relating to investments falling within the definition of “investment professionals” in Article 19(5) of the Order 2005; (ii) are high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts, as described in Article 49(2) of the Order 2005; (iii) the Company believes on reasonable grounds to be persons to whom Article 43(2) of the Order 2005 applies for these purposes; or (iv) other persons to whom such investment or investment activity may lawfully be made available (all such persons referred to in (i), (ii), (iii) and (iv) together, “Relevant Persons”). Any other persons who are not Relevant Persons should not take any action on the basis of this offering memorandum and should not act or rely on it. ## Canada The Offer Shares are not being offered and may not be sold to any purchaser in a province or territory of Canada other than the provinces of Alberta, British Columbia, Ontario and Quebec. --- The Offer Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Offer Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this Offering Circular (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts ("NI 33-105"), the Managers are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the Offering. ## General No action has been or will be taken in any country or jurisdiction other than Denmark that would, or is intended to, permit a public offering of the Offer Shares, or the possession or distribution of this Offering Circular or any other offering material, in any country or jurisdiction where action for that purpose is required. Persons into whose hands this Offering Circular comes are required by the Company, the Selling Shareholders and the Managers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Offer Shares or have in their possession or distribute such offering material, in all cases at their own expense. Neither the Company, the Selling Shareholders nor the Managers accept any legal responsibility for any violation by any person, whether or not a prospective purchaser of any of the Offer Shares, of any such restrictions. 232 --- 233 # TRANSFER RESTRICTIONS The Offer Shares have not been, and will not be, registered under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. Each purchaser of the Offer Shares outside the United States in compliance with Regulation S will be deemed to have represented and agreed that it has received a copy of this Offering Circular and such other information as it deems necessary to make an informed investment decision and that: (1) the purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all applicable laws and regulations; (2) the purchaser acknowledges that the Offer Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority of any state of the United States, and, subject to certain exceptions, may not be offered or sold within the United States; (3) the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Offer Shares, was located outside the United States at the time the buy order for the Offer Shares was originated and continues to be located outside the United States and has not purchased the Offer Shares for the account or benefit of any person in the United States or entered into any arrangement for the transfer of the Offer Shares or any economic interest therein to any person in the United States; (4) the purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate; (5) the Offer Shares have not been offered to it by means of any “directed selling efforts” as defined in Regulation S; (6) the purchaser is aware of the restrictions on the offer, sale and transfer of the Offer Shares pursuant to Regulation S and acknowledges that the Company shall not recognise any offer, sale, pledge or other transfer of the Offer Shares made other than in compliance with the above stated restrictions; (7) if it is acquiring any of the Offer Shares as a fiduciary or agent for one or more accounts, the purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account; and (8) the purchaser acknowledges that the Company, the Managers and their respective affiliates will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Each purchaser of the Offer Shares within the United States purchasing pursuant to an exemption from the registration requirements of the U.S. Securities Act will be deemed to have represented and agreed that it has received a copy of this Offering Circular and such other information as it deems necessary to make an informed investment decision and that: (1) the purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all applicable laws and regulations; (2) the purchaser acknowledges that the Offer Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States and are subject to restrictions on transfer; (3) the purchaser: (i) is a qualified institutional buyer (as defined in Rule 144A under the U.S. Securities Act); (ii) is aware that the sale to it is being made in reliance on Rule 144A under the U.S. Securities Act or pursuant to another exemption from, or a transaction not subject to, the registration requirements of the U.S. Securities Act; and (iii) is acquiring such Offer Shares for its own account or for the account of a qualified institutional buyer; (4) the purchaser is aware that the Offer Shares are being offered in the United States in a transaction not involving any public offering in the United States within the meaning of the U.S. Securities Act; (5) if in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Offer Shares, or any economic interest therein, such Offer Shares or any economic interest therein may be offered, sold, pledged or otherwise transferred only: (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A under the U.S. Securities Act; (ii) in compliance with Regulation S under the U.S. Securities Act; or (iii) in accordance with Rule 144 under the U.S. Securities Act (if available), in each case in accordance with any applicable securities laws of any state of the United States or any other jurisdiction; --- (6) the purchaser acknowledges that the Offer Shares are restricted securities within the meaning of Rule 144(a)(3) under the U.S. Securities Act and no representation is made as to the availability of the exemption provided by Rule 144 under the U.S. Securities Act for resale of any Offer Shares; (7) the purchaser will not deposit or cause to be deposited such Offer Shares into any depositary receipt facility established or maintained by a depositary bank other than a Rule 144A restricted depositary receipt facility, so long as such Offer Shares are restricted securities within the meaning of Rule 144(a)(3) under the U.S. Securities Act; (8) the purchaser acknowledges that the Company shall not recognise any offer, sale, pledge or other transfer of the Offer Shares made other than in compliance with the above stated restrictions; (9) if it is acquiring any of the Offer Shares as a fiduciary or agent for one or more accounts, the purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of such account; and (10) the purchaser acknowledges that the Company, the Managers and their respective affiliates will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Each person in a Relevant Member State, other than persons receiving offers contemplated in the English Language Prospectus in Denmark, who receives any communication in respect of, or who acquires any Offer Shares under, the offers contemplated hereby will be deemed to have represented, warranted and agreed to and with each of the Managers, the Selling Shareholders and the Company that: (1) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)I of the Prospectus Directive; and (2) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (i) the Offer Shares acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive and the prior consent of the Joint Global Coordinators has been given to the offer or resale; or (ii) where Offer Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Offer Shares to it is not treated under the Prospectus Directive as having been made to such persons. For the purposes of this provision, the expression an "offer" in relation to any of the Offer Shares in any Relevant Member States means the communication in any form and by any means of sufficient information on the terms of the offer and any Offer Shares to be offered so as to enable an investor to decide to purchase the Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. 234 --- 235 # LEGAL MATTERS Certain legal matters in connection with the Offering will be passed upon for the Company by Davis Polk & Wardwell London LLP, United States legal counsel to the Company, and by Plesner Advokatpartnerselskab, Danish legal counsel to the Company. Certain legal matters in connection with the Offering will be passed upon for the Managers by Latham & Watkins (London) LLP, United States legal counsel to the Managers, and by Kromann Reumert, Danish legal counsel to the Managers. --- 236 # STATE AUTHORISED PUBLIC ACCOUNTANTS The name and address of Netcompany Group A/S and NC TopCo A/S' independent auditors are as follows: Deloitte Statsautoriseret Revisionspartnerselskab Weidekampsgade 6 DK-2300 Copenhagen S Denmark Deloitte Statsautoriseret Revisionspartnerselskab ("Deloitte") is represented by Kim Takata Mücke, State Authorised Public Accountant, and Brian Schmit Jensen, State Authorised Public Accountant, both members of FSR—Danish Auditors (FSR—danske revisorer). # Netcompany Group A/S As the Company, Netcompany Group A/S, was incorporated on 16 April 2018, no accounting history exists for the Company and, consequently, the Company has a complex financial history. Once the IPO Reorganisation is completed (see the section on "Reorganisation" in this Offering Circular), the Company will be the parent company of the Group. Therefore, the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015, which have been audited by the Group's independent auditors, Deloitte, as stated in their report appearing therein, have been included in this Offering Circular. Further, the unaudited condensed consolidated interim financial statements of the Group as of and for the three months ended 31 March 2018 and 2017, which have been reviewed by the Group's independent auditors, Deloitte, as stated in their report appearing therein, are included in this Offering Circular. --- ADDITIONAL INFORMATION Name, Registered Office and Date of Incorporation Netcompany Group A/S Grønningen 17, 1st floor DK-1270 Copenhagen K Denmark Telephone: +45 70 13 14 40 Website: www.netcompany.com The Company was incorporated in Denmark as a public limited liability company under the laws of Denmark on 16 April 2018. The Company does not have any secondary names. The registered office is located in the municipality of Copenhagen at Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. Information on the Group’s website does not form part of and is not incorporated by reference into this Offering Circular. Registration The Company is registered with the Danish Business Authority under registration (CVR) no. 39 48 89 14. Objectives of the Company According to article 2.1 of the Articles of Association, the objects of the Company are to invest in and own shareholdings in other companies and to carry on IT-business and thereto related business. Material Subsidiaries The following table sets forth the Group’s material subsidiaries which are, directly or indirectly, held by NC TopCo A/S, as at the date of this Offering Circular: \| Entity Name \| Country of Incorporation \| Currency \| Nominal Share Capital \| Percentage of (Direct or Indirect) Ownership Interest and Voting Rights \| \| --- \| --- \| --- \| --- \| --- \| \| NC NewCo A/S \| Denmark \| DKK \| 10,000,000 \| 100% \| \| Netcompany Holding I A/S (formerly Netcompany A/S) \| Denmark \| DKK \| 553,000 \| 100% \| \| Netcompany UK Ltd (formerly Hunter Macdonald Ltd) \| United Kingdom \| GBP \| 10,869 \| 100% \| \| Netcompany UK Holding Ltd \| United Kingdom \| GBP \| 200 \| 100% \| \| Netcompany Norway AS (formerly Mesan AS) \| Norway \| NOK \| 3,209,486 \| 100% \| \| Netcompany A/S (formerly Netcompany IT and Business Consulting A/S) \| Denmark \| DKK \| 16,000,000 \| 100% \| \| Netcompany Poland Sp. Z o.o. (formerly Netcompany Solutions Sp. Z o.o.) \| Poland \| PLN \| 50,000 \| 100% \| The Group has selected the material subsidiaries on the basis of a commercial materiality assessment, primarily focusing on (i) where revenue is generated and (ii) where a substantial part of the Group’s assets are held. The material subsidiaries represented 100% of the Group’s total revenue and 99.4% of the Group’s total EBITDA for the three months ended 31 March 2018 and 99.9% of the Group’s total assets as of 31 March 2018. Information Incorporated by Reference No documents are incorporated herein by reference. 237 --- 238 ## General Meetings The general meeting is the ultimate authority in all matters relating to the Company, subject to the limitations in Danish law and the Articles of Association. See “Description of the Shares and Share Capital—General Meetings and Voting Rights”. ## Principal Bankers After completion of the Offering and the Refinancing, the Group’s principal bankers will be Danske Bank A/S, Nordea Danmark, filial of Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial of Skandinaviska Enskilda Banken AB (publ.), Sverige. ## Share Issuing Agent The Company’s share issuing agent is: Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen Denmark --- 239 # GLOSSARY The following explanations are not intended as technical definitions and are provided purely for assistance in understanding certain terms as used in this Offering Circular. "Accordion Option" ... an option under the New Facilities Agreement for the Group to request that the lenders make available additional term loan facilities by up to DKK 400 million "Admission" ... admission of the Shares to trading and official listing on Nasdaq Copenhagen "AICPA" ... American Institute of Certified Public Accountants "Arbejdstilsynet" ... Arbejdstilsynet (Danish Working Environment Authority) "Articles of Association" ... the articles of association of the Company "ATP" ... Arbejdsmarkedets Tillægspension (Danish Pension and Benefits Provider and Administrator) "Audit Committee" ... the audit committee of the Board of Directors, described in “Board of Directors, Executive Management and Key Employees—Board of Directors—Board practices and committees” "Board of Directors" ... the Board of Directors of the Company at any given date "British pound sterling", "GBP" or "£" ... British pound sterling, the lawful currency of the United Kingdom "CAGR" ... compound annual growth rate "CET" ... Central European Time "Chairman" ... the Chairman of the Board of Directors of the Company, Pekka Ala-Pietilä "Clearstream" ... Clearstream Banking, S.A. "Closing Date" ... the date of first utilisation of the Term Loan Facility "Code" ... Internal Revenue Code of 1986, as amended "Combined Financial Statements" ... the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015 "Company" ... Netcompany Group A/S "Condensed Consolidated Interim Financial Statements" ... unaudited condensed interim consolidated financial statements of NC TopCo A/S as of and for the three months ended 31 March 2018, respectively, as included in this Offering Circular "Corporate Governance Recommendations" ... the Recommendations on Corporate Governance of the Danish Committee on Corporate Governance issued on 23 November 2017 "CPH" ... Copenhagen Airports "CRM" ... customer relationship management --- "CSR" Corporate Social Responsibility "Danish Central Bank" Danmarks Nationalbank "Danish Capital Markets Act" Consolidated Act no. 12 of 8 January 2018 on Capital Markets "Danish Companies Act" the Danish Consolidated Act no. 1089 of 14 September 2015 on limited liability companies, as amended "Danish Executive Order on Issuers' Duty to Provide Information" Executive Order no. 1173 of 31 October 2017 on issuers' duty to provide information "Danish Executive Order on Major Shareholders" Executive Order no. 1172 of 31 October 2017 on major shareholders "Danish Executive Order on Prospectuses" Executive Order no. 1176 of 31 October 2017 on prospectuses "Danish Executive Order on Takeover Bids" Executive Order no. 1171 of 31 October 2017 on takeover bids "Danish FSA" Danish Financial Supervisory Authority "Danish Offering" an initial public offering to retail and institutional investors in Denmark "DDoS" distributed denial-of-services, cyber attacks, where the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host connected to the Internet "Deloitte" Deloitte Statsautoriseret Revisionspartnerselskab "Deputy Chairman" the Deputy Chairman of the Board of Directors of the Company, Thomas Broe-Andersen "DESI" Digital Economy and Society Index "DKK" or "Danish kroner" Danish kroner, the lawful currency of Denmark "EBITA" as calculated by the Group, EBITA represents earnings before interest, taxes and amortisation "EBITDA" as calculated by the Group, EBITDA represents earnings before interest, tax, depreciations, amortisations and impairment losses "EEA" European Economic Area "EFI" Et Fælles Inddrivelsessystem, the debt collection system preceding the ICI debt collection system being developed by the Group "English Language Prospectus" a prospectus in English for the purpose of the Danish Offering "ERM" enterprise risk management "ERP" enterprise resource planning "EU" European Union 240 --- "euro", "EUR" or "€" ... euro, the lawful currency of the participating member states in the Third Stage of the European and Monetary Union of the Treaty Establishing the European Community "Euroclear" ... Euroclear Bank S.A./N.A. "Executive Management" ... the executive management of the Company as registered with the Danish Business Authority "Existing Group Shareholders" ... the Significant Shareholders and the other existing shareholders of NC TopCo A/S, including NC ShareCo ApS, the joint holding of certain of the MIP Participants and Employee Shareholders "FLIS" ... Danish municipalities information management system "FSN Capital Partners" ... FSN Capital Partners ApS, acting in its capacity as sub-investment advisor to FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of the Significant Shareholders "FTE" ... full time employees "GDPR" ... the EU General Data Protection Regulation (Regulation (EU) 2016/679) "Group" ... Netcompany Group A/S together with its consolidated subsidiaries, or otherwise as the context may require, for the period from completion of the IPO Reorganisation; and (ii) NC TopCo A/S together with its consolidated subsidiaries, or otherwise as the context may require, for the period prior to completion of the IPO Reorganisation "ICI" ... Integreret Centralt Inddrivelse (Centrally Integrated Collection), a new debt collection system for all debt by citizens to Danish governmental authorities "IFRS" ... International Financial Reporting Standards "International Offering" ... the private placement in the United States only to persons who are "qualified institutional buyers" or "QIBs" (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A and the private placements to institutional investors in the rest of the world "International Offering Circular" ... an Offering Circular in English for use of the international private placement outside of Denmark and the United States "IPO" ... Initial Public Offering "IPO Reorganisation" ... the Company is expected to acquire NC TopCo A/S pursuant to a reorganisation which will result in the Selling Shareholders together with the MIP Participants and Employee Shareholders becoming the owners of the Company, and which will be carried out in connection with pricing and prior to Admission "ISAE" ... International Standard on Assurance Engagements "Issuer Rules of Nasdaq Copenhagen" ... the rules for issuers of shares on Nasdaq Copenhagen of 3 January 2018 "Joint Bookrunner" ... Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige 241 --- "Joint Global Coordinators" Danske Bank A/S, Deutsche Bank AG, London Branch, Morgan Stanley & Co. International plc. "Key Employee" Gustaf Lofberg, Country Manager, Denmark "KOMBIT" Kombit A/S "LTIP Equity Swap" the equity swap entered into by the Group allowing the Company to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap "Managers" the Joint Global Coordinators and the Joint Bookrunner "Market Abuse Regulation" Regulation (EU) no. 596/2014 on Market Abuse "MiFID II" Directive 2014/65/EU on markets in financial instruments, as amended "MiFID II Product Governance Requirements" the product governance requirements contained within MiFID II, Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and local implementing measures "MIP" the previous management incentive programme as described in "Board of Directors, Management and Key Employees—Incentive Programmes—Offering related programmes—Management investment programme (the "MIP")" "MIP Participants and Employee Shareholders" participants in the MIP (including four members of the Board of Directors, a member of the Executive Management and certain other employees, including certain of the previous owners of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018)), who have invested directly or indirectly through individual holding companies or through NC ShareCo ApS, the joint holding company for certain of the MIP participants, and certain other employees, a total of 81 individuals "Motorregistret" Motorregistret (the Danish Register of Motor Vehicles) "Nasdaq Copenhagen" Nasdaq Copenhagen A/S, CVR no. 19 04 26 77 "New Facilities" the facilities made available to the Group by the New Facilities Agreement "New Facilities Agreement" the facilities agreement entered into between the Company, NC TopCo A/S, NC NewCo A/S, Netcompany Holding I A/S and Netcompany A/S and Danske Bank A/S, Nordea Danmark, filial af Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as mandated lead arrangers, and Danske Bank A/S as agent "NI 33-105" National Instrument 33-105 Underwriting Conflicts "Nomination Committee" the nomination committee of the Board of Directors, described in "Board of Directors, Executive Management and Key Employees—Board of Directors—Board practices and committees" 242 --- 243 "NOPLAT" ... net operating profit less adjusted taxes "NPS" ... net promoter score "Offer Period" ... 23 May 2018 to 6 June 2018 at 11:00 a.m. (CET) unless the Offering is closed earlier "Offer Price" ... the price per Offer Share at which the Offer Shares will be sold "Offer Price Range" ... the Offer Price is expected to be between DKK 135 and DKK 165 per Offer Share "Offer Shares" ... 23,000,000 Shares offered by the Selling Shareholders, including any Option Shares (unless the context indicates otherwise) "Offering" ... offering of 20,000,000 Offer Shares of DKK 1 nominal value each "Offering Circular" ... the U.S. Offering Circular, the English Language Prospectus and the International Offering Circular "Option Shares" ... option granted by the Significant Shareholders to the Joint Global Coordinators, on behalf of the Managers, to purchase up to 3,000,000 additional Shares in the aggregate at the Offer Price "Order 2005" ... the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended "OSS" ... open source software "Overallotment Option" ... the option granted the Joint Global Coordinators, on behalf of the Managers, by the Significant Shareholders to purchase additional Shares at the Offer Price "PFIC" ... passive foreign investment company "Post-IPO Reorganisation" ... following Admission and completion of the Offering, and in accordance with the terms of the Reorganisation Agreements, the Company anticipates to procure the completion of certain steps to simplify the corporate structure of the Group "Post-IPO LTIP" ... the post-offering long-term incentive programme as described in "Board of Directors, Executive Management and Key Employees—Incentive programmes" "Matching Shares" ... the Shares granted to the persons participating in the Group's matching shares incentive programme "Prospectus Directive" ... Directive 2003/71/EC of 4 November 2003 (together with any applicable implementing measures in any member state) "Prospectus Regulation" ... Commission Regulation (EC) no. 809/2004 of 29 April 2004, as amended "QIBs" ... qualified institutional buyers "Refinancing" ... the Group's refinancing of certain of its existing indebtedness using a combination of the following facilities: (i) the Term Loan Facility; and (ii) the Revolving Facility, to which drawdowns or funding are subject to the Settlement Date. The New Facilities include an Accordion Option for the Group to request that the lenders make --- available term loan facilities by up to DKK 400 million. The New Facilities are provided for pursuant to the New Facilities Agreement entered into on 7 May 2018, by inter alios the Company, Netcompany A/S and Danske Bank A/S, Nordea Danmark, filial af Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as mandated lead arrangers, and Danske Bank A/S as agent "Regulation S" ... Regulation S under the U.S. Securities Act "Relevant Member State" ... any Member State of the European Economic Area that has implemented the Prospectus Directive, excluding Denmark "Relevant Persons" ... persons who: (i) are investment professionals falling within Article 19(5); or (ii) falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc."), of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or other persons to whom such investment or investment activity may lawfully be made available "Remuneration Committee" ... the remuneration committee of the Board of Directors, described in "Board of Directors, Executive Management and Key Employees—Board of Directors—Board practices and committees" "Reorganisation Agreements" ... certain reorganisation agreements entered into between the Existing Group Shareholders as well as the shareholders of NC ShareCo ApS and the shareholders of NC ManCo AS in connection with the IPO Reorganisation "Revolving Facility" ... DKK 750 million multicurrency revolving credit facility with a final maturity date of five years after the Settlement Date, which may be utilised in DKK, EUR and any other currency readily available and freely convertible into DKK made available to the Group by the New Facilities Agreement "Rule 144A" ... Rule 144A under the U.S. Securities Act "Safe Harbour Regulation" ... Commission Delegated Regulation (EU) 2016/1052 "Selling Shareholders" ... The Significant Shareholders, André Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB, and Danica Pension, Livsforsikringsaktieselskab, and the MIP Participants and Employee Shareholders "Settlement Date" ... the date of payment for and settlement of the Offer Shares is expected to take place on or around 11 June 2018 "Shares" ... the outstanding ordinary shares of the Company "Short Selling Regulation" ... Regulation (EU) 236/2012 of 14 March 2012 on short selling "Significant Shareholders" ... FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. "Skatteministeriet" ... Skatteministeriet (Danish Ministry of Taxation) "SLA" ... service level agreement "STIL" ... Styrelsen for IT og Læring (National Agency for IT and Learning) 244 --- "STIP" The short-term incentive programme as described in "Board of Directors, Executive Management and Key Employees—Incentive programmes" "Target Market Assessment" The product approval process conducted for the purposes of the MiFID II Product Governance Requirements, which has determined that the Offer Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II "Term Loan Facility" a DKK 750 million term facility with a final maturity date of five years after the Closing Date made available to the Group by the New Facilities Agreement "Treaty" the income tax treaty between Denmark and the United States "U.S." or "United States" United States of America "U.S. dollar" or "$" United States dollar, the lawful currency of the United States of America "U.S. Exchange Act" U.S. Securities Exchange Act of 1934, as amended "U.S. Offering Circular" an Offering Circular in English in connection with the private placement in the United States "U.S. Securities Act" U.S. Securities Act of 1933, as amended "Underwriting Agreements" the two separate underwriting agreements entered into between respectively (i) the Company, certain of the Selling Shareholders and the Managers named below, and (ii) the Company, certain of the Selling Shareholders and Danske Bank A/S, expected to be entered into on 7 June 2018 "VP Securities" VP SECURITIES A/S, CVR no. 21 59 93 36 "VPN" virtual private network 245 --- [THIS PAGE INTENTIONALLY LEFT BLANK] --- FINANCIAL INFORMATION Index of Financial Information Consolidated Interim Financial Statements of NC TopCo A/S and subsidiaries for the three months ended 31 March 2018: Management statement ... F-2 Independent auditors’ review report ... F-3 Statement of comprehensive income for the three months ended 31 March 2018 and 2017 ... F-4 Balance sheets as at 31 March 2018 and 2017 ... F-5 Statement of changes in equity as at 31 March 2018 and 2017 ... F-7 Statement of cash flows for the three months ended 31 March 2018 and 2017 ... F-8 Notes to the consolidated interim financial statements ... F-9 Combined Financial Statements for the financial years ended 31 December 2017, 2016 and 2015: Introduction ... F-14 Management statement ... F-17 Independent auditors’ report ... F-18 Statement of comprehensive income for the years ended 31 December 2017, 2016 and 2015 ... F-20 Balance sheets as at 31 December 2017, 2016 and 2015 ... F-21 Statement of changes in equity as at 31 December 2017, 2016 and 2015 ... F-23 Statement of cash flows for the years ended 31 December 2017, 2016 and 2015 ... F-24 Notes to the combined financial statements ... F-25 F-1 --- Statement by the Board of Directors and Executive Management on the Consolidated Interim Financial Statements of NC TopCo A/S and Subsidiaries for the Three Months period ended 31 March 2018 The Board of Directors and Executive Management have today reviewed and approved the Consolidated Interim Financial Statements of NC TopCo A/S and subsidiaries (the "Group") for the period 1 January – 31 March 2018. The Consolidated Interim Financial Statements for the period 1 January – 31 March 2018 have been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union and the accounting policies set out in the Annual Report 2017 of NC TopCo A/S. In our opinion, the Consolidated Interim Financial Statements give a true and fair view of the Group’s financial position at 31 March 2018 and of the results of the Group’s operations and cash flows for the period 1 January – 31 March 2018 in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union. Copenhagen, 23 May 2018 NC TopCo A/S Board of Directors Pekka Ala-Pietilä Chairman Thomas Broe-Andersen Deputy Chairman Pernille Fabricius Board Member Juha Christensen Board Member Bo Rygaard Board Member Carsten Gomard Board Member Executive Management André Rogaczewski CEO Claus Jørgensen COO Thomas Johansen CFO F-2 --- Independent Auditors' review Report on the Consolidated Interim Financial Statements of NC TopCo A/S and Subsidiaries for the Three Months period ended 31 March 2018 To shareholders and prospective investors We have reviewed the interim consolidated financial statements of NC TopCo A/S and subsidiaries (the "Group") for the period 1 January – 31 March 2018 comprising consolidated statements of income, comprehensive income, cash flows and changes in equity for the period then ended, balance sheet as of 31 March 2018 and selected notes, prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. Management's Responsibility Management of NC TopCo A/S is responsible for the preparation of the interim consolidated financial statements in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union and for such internal control as Management determines is necessary to enable the preparation of the interim consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibilities for the audit of the Consolidated Interim Financial Statements Our responsibility is to express a conclusion on the interim consolidated financial statements based on our review. We conducted our review in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity and additional requirements under Danish audit regulation. This requires us to conclude whether anything has come to our attention that causes us to believe that the interim consolidated financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This also requires us to comply with ethical requirements. A review of interim consolidated financial statements in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity is a limited assurance engagement. The auditor performs procedures, primarily consisting of making inquiries of management and others within the Group, as appropriate, and applying analytical procedures, and evaluates the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on the interim consolidated financial statements. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim consolidated financial statements are not prepared in all material respects in accordance with IAS 34 "Interim Financial Reporting" as adopted in the European Union. Copenhagen, 23 May 2018 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No 33 96 35 56 Kim Takata Mücke State-Authorised Public Accountant mne10944 Brian Schmit Jensen State-Authorised Public Accountant mne40050 F-3 --- STATEMENT OF COMPREHENSIVE INCOME \| \| Notes \| 1 January – 31 March \| \| \| --- \| --- \| --- \| --- \| \| \| \| 2018 \| 2017 \| \| \| \| DKK million \| \| \| Revenue \| \| 517.0 \| 332.9 \| \| Cost of services \| 5 \| (318.8) \| (192.3) \| \| Gross profit \| \| 198.2 \| 140.6 \| \| Sales and marketing costs \| 6 \| (2.7) \| (2.0) \| \| Administrative costs \| 7 \| (67.7) \| (42.8) \| \| Special items \| 8 \| (7.7) \| (0.0) \| \| Earnings before interest, tax and amortisation (EBITA) (non-IFRS) \| \| 120.1 \| 95.7 \| \| Amortisation \| \| (28.8) \| (23.9) \| \| Operating profit (EBIT) \| \| 91.2 \| 71.8 \| \| Financial income \| \| 7.1 \| 0.4 \| \| Financial expenses \| \| (31.8) \| (24.2) \| \| Profit before tax \| \| 66.5 \| 48.0 \| \| Tax on profit for the period \| \| (15.3) \| (12.1) \| \| Profit for the period \| \| 51.2 \| 35.9 \| \| Basic earnings per share (DKK) \| \| 0.71 \| 0.52 \| \| Diluted earnings per share (DKK) \| \| 0.71 \| 0.52 \| \| Other comprehensive income \| \| \| \| \| Items that may be reclassified subsequently to profit or loss \| \| \| \| \| Cash flow hedging, net fair value gain / (loss) \| \| 0.3 \| (1.4) \| \| Foreign currency translation subsidiaries \| \| (2.3) \| (2.0) \| \| Change in deferred cost of hedging \| \| 3.5 \| 3.7 \| \| Tax on other comprehensive income \| \| (0.8) \| (1.1) \| \| Other comprehensive income \| \| 0.6 \| 2.1 \| \| Comprehensive income for the period \| \| 51.8 \| 38.0 \| F-4 --- BALANCE SHEET \| \| Notes \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| --- \| \| \| \| DKK million \| \| \| \| Goodwill \| \| 2,108.7 \| 1,883.9 \| 2,108.7 \| \| Other intangible assets \| \| 465.2 \| 463.6 \| 495.2 \| \| Intangible assets \| \| 2,573.9 \| 2,347.5 \| 2,603.9 \| \| Leasehold improvements \| \| 4.3 \| 3.1 \| 3.9 \| \| Equipment \| \| 20.8 \| 15.4 \| 20.0 \| \| Right of use assets \| \| 26.9 \| 25.2 \| 30.5 \| \| Property, plant and equipment \| \| 52.0 \| 43.8 \| 54.5 \| \| Other receivables \| \| 9.9 \| 6.4 \| 8.8 \| \| Deferred tax assets \| \| 0.7 \| 0.2 \| 0.0 \| \| Financial assets \| \| 10.6 \| 6.6 \| 8.8 \| \| Non-current assets \| \| 2,636.4 \| 2,397.9 \| 2,667.2 \| \| Trade receivables \| 10 \| 318.7 \| 193.6 \| 445.4 \| \| Contract work in progress \| \| 301.6 \| 170.7 \| 139.2 \| \| Other receivables \| \| 9.3 \| 2.2 \| 11.0 \| \| Prepayments \| \| 6.6 \| 6.0 \| 12.3 \| \| Receivables \| \| 636.1 \| 372.4 \| 607.8 \| \| Cash \| \| 154.2 \| 71.2 \| 194.5 \| \| Current assets \| \| 790.4 \| 443.7 \| 802.3 \| \| Assets \| \| 3,426.8 \| 2,841.5 \| 3,469.5 \| F-5 --- BALANCE SHEET \| \| Notes \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| --- \| \| \| \| DKK million \| \| \| \| Share capital \| \| 71.7 \| 69.4 \| 71.6 \| \| Cash flow hedging reserve \| \| (29.8) \| (38.7) \| (30.0) \| \| Foreign currency translation reserve \| \| (5.2) \| (2.1) \| (2.9) \| \| Deferred cost of hedging reserve \| \| 13.1 \| 20.9 \| 10.4 \| \| Retained earnings \| \| 1,652.8 \| 1,252.8 \| 1,594.8 \| \| Equity \| \| 1,702.6 \| 1,302.3 \| 1,643.9 \| \| Borrowings \| 11 \| 1,167.3 \| 1,175.7 \| 1,264.9 \| \| Leasing \| \| 15.0 \| 13.6 \| 17.6 \| \| Deferred tax liability \| \| 116.9 \| 106.1 \| 112.4 \| \| Non-current liabilities \| \| 1,299.2 \| 1,295.4 \| 1,394.9 \| \| Borrowings \| 11 \| 0.0 \| 0.6 \| 0.0 \| \| Leasing \| \| 12.8 \| 11.7 \| 13.6 \| \| Prepayments received from customers \| \| 46.2 \| 19.5 \| 36.2 \| \| Trade payables \| \| 54.3 \| 16.9 \| 50.6 \| \| Other payables \| 12 \| 199.9 \| 157.7 \| 223.1 \| \| Provisions \| 13 \| 30.4 \| 2.5 \| 30.4 \| \| Income tax payable \| \| 81.4 \| 34.8 \| 76.8 \| \| Current liabilities \| \| 425.0 \| 243.8 \| 430.7 \| \| Liabilities \| \| 1,724.2 \| 1,539.2 \| 1,825.6 \| \| Equity and liabilities \| \| 3,426.8 \| 2,841.5 \| 3,469.5 \| F-6 --- STATEMENT OF CHANGES IN EQUITY \| \| Share capital \| Fair value adjustment of interest rate swap \| Exchange differences on translating foreign subsidiaries \| Deferred cost of hedging reserve \| Retained earnings \| Total \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| DKK million \| \| \| \| \| Equity at 1 January 2017 \| 69.3 \| (39.8) \| (0.1) \| 18.0 \| 1,213.1 \| 1,260.5 \| \| Capital increase \| 0.1 \| 0.0 \| 0.0 \| 0.0 \| 3.8 \| 3.9 \| \| Profit for the period \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 35.9 \| 35.9 \| \| Other comprehensive income for the period \| 0.0 \| 1.1 \| (2.0) \| 2.9 \| 0.0 \| 2.1 \| \| Equity at 31 March 2017 \| 69.4 \| (38.7) \| (2.1) \| 20.9 \| 1,252.8 \| 1,302.3 \| \| Equity at 1 January 2018 \| 71.6 \| (30.0) \| (2.9) \| 10.4 \| 1,594.8 \| 1,643.9 \| \| Capital increase \| 0.1 \| 0.0 \| 0.0 \| 0.0 \| 6.8 \| 6.9 \| \| Profit for the period \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 51.2 \| 51.2 \| \| Other comprehensive income for the period \| 0.0 \| 0.2 \| (2.3) \| 2.7 \| 0.0 \| 0.6 \| \| Equity at 31 March 2018 \| 71.7 \| (29.8) \| (5.2) \| 13.1 \| 1,652.8 \| 1,702.6 \| \| Equity at 1 January 2017 \| 69.3 \| (39.8) \| (0.1) \| 18.0 \| 1,213.1 \| 1,260.5 \| \| Capital increase \| 2.3 \| 0.0 \| 0.0 \| 0.0 \| 240.0 \| 242.4 \| \| Profit for the year \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 141.6 \| 141.6 \| \| Other comprehensive income/(loss) for the year \| 0.0 \| 9.8 \| (2.8) \| (7.6) \| 0.0 \| (0.6) \| \| Equity at 31 December 2017 \| 71.6 \| (30.0) \| (2.9) \| 10.4 \| 1,594.8 \| 1,643.9 \| F-7 --- CASH FLOW STATEMENT \| \| Notes \| 1 January – 31 March \| \| \| --- \| --- \| --- \| --- \| \| \| \| 2018 \| 2017 \| \| \| \| DKK million \| \| \| Operating profit (EBIT) \| \| 91.2 \| 71.8 \| \| Depreciation and amortisation \| \| 38.5 \| 27.7 \| \| Working capital changes \| \| (35.0) \| (20.7) \| \| Free cash flow \| \| 94.7 \| 78.9 \| \| Income taxes paid \| \| (10.4) \| (19.4) \| \| Financial income received \| \| 1.1 \| 0.3 \| \| Financial expenses paid \| \| (14.3) \| (15.9) \| \| Cash flows from operating activities \| \| 71.1 \| 43.8 \| \| Acquisition of property, plant and equipment \| \| (3.5) \| (4.9) \| \| Other receivables (deposits) \| \| (1.1) \| 0.0 \| \| Cash flows from investing activities \| \| (4.6) \| (4.9) \| \| Cash proceeds from issue of share capital \| \| 6.9 \| 3.9 \| \| Repayment of borrowings \| 11 \| (114.7) \| (3.9) \| \| Cash flows from financing activities \| \| (107.7) \| 0.0 \| \| Increase in cash and cash equivalents \| \| (41.2) \| 38.9 \| \| Cash and cash equivalents at 1 January \| \| 194.5 \| 32.0 \| \| Effect of exchange rate changes on the balance of cash held in foreign currencies \| \| 1.0 \| (0.2) \| \| Cash and cash equivalents at 31 March \| \| 154.2 \| 70.7 \| Reconciliation of liabilities arising from financing activities \| \| 1 January – 31 March 2018 \| \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| Borrowings \| Leasing \| Interest rate and currency swaps fair value \| Total \| \| \| DKK million \| \| \| \| \| Opening balance 1 January 2018 \| 1,264.9 \| 31.2 \| 28.0 \| 1,324.1 \| \| Financing obtained \| — \| — \| — \| — \| \| Repayment \| (108.9) \| (5.8) \| — \| (114.7) \| \| Fair value adjustments (non-cash) \| — \| — \| (2.8) \| (2.8) \| \| Leasing (non-cash) \| — \| 2.4 \| — \| 2.4 \| \| Amortisation loan costs (non-cash) \| 6.6 \| — \| — \| 6.6 \| \| Acquired entities (non-cash) \| — \| — \| — \| — \| \| Exchange rate adjustments (non-cash) \| 4.6 \| — \| — \| 4.6 \| \| Closing balance 31 March 2018 \| 1,167.3 \| 27.8 \| 25.2 \| 1,220.3 \| F-8 --- NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Accounting policies The interim consolidated financial statements for the period 1 January – 31 March has been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union. The accounting policies applied for period 1 January – 31 March 2018 are consistent with those applied in the consolidated annual financial statements for 2017. Please refer to F-pages covering the combined financial statements for 2015, 2016 & 2017, pages F-25 to F-26. 2. Significant accounting estimates, assumptions and uncertainties Please refer to F-pages covering the combined financial statements for 2015, 2016 & 2017, pages F-27 to F-30. 3. Effect of the change in accounting policies No changes in accounting policies has been adopted during the period. 4. Segment information 1 January – 31 March \| Strategic business areas \| Description \| Operating segments \| Geographic segments \| \| --- \| --- \| --- \| --- \| \| Public \| Public companies or companies acting as a public company seen from a business aspect. \| Denmark, Norway & United Kingdom \| Denmark, Norway, United Kingdom, Poland & Vietnam \| \| Private \| All other companies \| Denmark, Norway & United Kingdom \| Denmark, Norway, United Kingdom, Poland & Vietnam \| \| Strategic business area \| Public 2018 \| Private 2018 \| Total 2018 \| \| \| \| DKK million \| \| \| Development Revenue \| 128.0 \| 95.2 \| 223.2 \| \| Maintenance Revenue \| 157.8 \| 136.1 \| 293.8 \| \| Total Revenue \| 285.8 \| 231.2 \| 517.0 \| \| EBITA (non-IFRS) \| 60.5 \| 59.6 \| 120.1 \| \| Strategic business area \| Public 2017 \| Private 2017 \| Total 2017 \| \| \| \| DKK million \| \| \| Development Revenue \| 87.6 \| 53.1 \| 140.6 \| \| Maintenance Revenue \| 65.0 \| 127.2 \| 192.3 \| \| Total Revenue \| 152.6 \| 180.3 \| 332.9 \| \| EBITA (non-IFRS) \| 32.8 \| 62.9 \| 95.7 \| F-9 --- 1 January – 31 March \| Segment information related to operating entities \| Denmark 2018 \| Norway 2018 \| United Kingdom 2018 \| Other 2018 \| Total 2018 \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| \| \| Revenue from external customers \| 397.3 \| 42.6 \| 77.1 \| — \| 517.0 \| \| EBITA, operating entities (non-IFRS) \| 106.0 \| 9.0 \| 5.1 \| — \| 120.1 \| \| Allocated cost \| 0.4 \| (1.5) \| (0.0) \| 1.2 \| 0.0 \| \| EBITA, reported in legal entities (non-IFRS) \| 106.3 \| 7.5 \| 5.1 \| 1.2 \| 120.1 \| \| Segment information related to operating entities \| Denmark 2017 \| Norway 2017 \| United Kingdom 2017 \| Other 2017 \| Total 2017 \| \| \| DKK million \| \| \| \| \| \| Revenue from external customers \| 297.8 \| 35.1 \| — \| — \| 332.9 \| \| EBITA, operating entities (non-IFRS) \| 87.9 \| 7.8 \| — \| — \| 95.7 \| \| Allocated cost \| (11.9) \| 1.5 \| — \| 10.4 \| — \| \| EBITA, reported in legal entities (non-IFRS) \| 76.0 \| 9.3 \| — \| 10.4 \| 95.7 \| 1 January – 31 March \| Segment information related to geographical areas \| Denmark 2018 \| Norway 2018 \| Poland 2018 \| United Kingdom 2018 \| Vietnam 2018 \| Total 2018 \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| \| \| \| Revenue from external customers \| 396.6 \| 42.9 \| — \| 77.5 \| — \| 517.0 \| \| Revenue from internal sales \| 8.1 \| — \| 36.2 \| — \| 5.0 \| 0.0 \| \| Revenue, geographical areas (non-IFRS) \| 404.7 \| 42.9 \| 36.2 \| 77.5 \| 5.0 \| 517.0 \| \| EBITA, geographical areas (non-IFRS) \| 95.0 \| 7.5 \| 12.1 \| 5.1 \| 0.4 \| 120.1 \| \| Allocated cost \| 11.0 \| 1.5 \| (12.1) \| 0.0 \| (0.4) \| 0.0 \| \| EBITA, geographical areas (non-IFRS) \| 106.0 \| 9.0 \| — \| 5.1 \| — \| 120.1 \| \| Segment information related to geographical areas \| Denmark 2017 \| Norway 2017 \| Poland 2017 \| United Kingdom 2017 \| Vietnam 2017 \| Total 2017 \| \| \| DKK million \| \| \| \| \| \| \| Revenue from external customers \| 297.8 \| 35.1 \| — \| — \| — \| 332.9 \| \| Revenue from internal sales \| 1.6 \| — \| 24.3 \| — \| — \| 0.0 \| \| Revenue, geographical areas (non-IFRS) \| 299.4 \| 35.1 \| 24.3 \| — \| — \| 332.9 \| \| EBITA, geographical areas (non-IFRS) \| 75.5 \| 9.3 \| 10.9 \| — \| — \| 95.7 \| \| Allocated cost \| 12.4 \| (1.5) \| (10.9) \| — \| — \| 0.0 \| \| EBITA, geographical areas (non-IFRS) \| 87.9 \| 7.8 \| — \| — \| — \| 95.7 \| 5. Costs of services \| \| 1 January – 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million \| \| \| Project costs \| 102.4 \| 31.1 \| \| Staff costs \| 213.5 \| 158.5 \| \| Depreciation \| 2.8 \| 2.7 \| \| Total costs of services \| 318.8 \| 192.3 \| F-10 --- F-11 # 6. Sales and marketing costs \| \| 1 January – 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million \| \| \| Sales and marketing costs \| 1.7 \| 1.5 \| \| Staff costs \| 1.0 \| 0.5 \| \| Total sales and marketing costs \| 2.7 \| 2.0 \| # 7. Administrative costs \| \| 1 January – 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million \| \| \| Administrative costs \| 37.9 \| 28.4 \| \| Staff costs \| 23.0 \| 13.2 \| \| Depreciation \| 6.8 \| 1.2 \| \| Total administrative costs excl. amortisation \| 67.7 \| 42.8 \| # 8. Special items \| \| 1 January – 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million \| \| \| Acquisition related costs \| 1.0 \| 0.0 \| \| Offer-related costs \| 6.7 \| 0.0 \| \| Total special items \| 7.7 \| 0.0 \| # 9. Income Statement classified by function \| \| 1 January – 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million \| \| \| Revenue \| 517.0 \| 332.9 \| \| Cost of services, including depreciation and amortisation \| (318.8) \| (192.3) \| \| Gross profit \| 198.2 \| 140.6 \| \| Sales and marketing costs, including depreciation and amortisation \| (2.7) \| (2.0) \| \| Administrative costs, including depreciation and amortisation \| (104.2) \| (66.7) \| \| Operating profit (EBIT) \| 91.2 \| 71.8 \| \| Financial income \| 7.1 \| 0.4 \| \| Financial expenses \| (31.8) \| (24.2) \| \| Profit before tax \| 66.5 \| 48.0 \| \| Tax on profit for the period \| (15.3) \| (12.1) \| \| Profit for the period \| 51.2 \| 35.9 \| \| Depreciation and Amortisation have been presented as follows in the income statement: \| \| \| \| Cost of services \| 2.8 \| 2.7 \| \| Sales and marketing costs \| 0.0 \| 0.0 \| \| Administrative costs \| 35.6 \| 25.1 \| \| Depreciation and amortisation \| 38.4 \| 27.8 \| --- F-12 # 10. Trade receivables \| \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| Trade receivables \| 318.7 \| 193.6 \| 445.4 \| The carrying amount of trade receivables is assumed to be equal to the fair value: \| \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| Aging of receivables that are not impaired \| \| \| \| \| Not due \| 197.5 \| 148.0 \| 314.9 \| \| Until 30 days \| 80.6 \| 26.4 \| 75.0 \| \| Between 30 and 90 days \| 16.1 \| 3.9 \| 34.7 \| \| More than 90 days \| 24.5 \| 15.3 \| 20.8 \| \| Total trade receivables \| 318.7 \| 193.6 \| 445.4 \| The Group is continuously conducting individual assessment of potential bad debts. Historically, credit losses experienced by the Group has been insignificant, and no indications of changes in the level of credit losses in the future have been identified. Consequently, allowances for credit losses at 31 March 2018 (31 March 2017 and 31 December 2017) are insignificant. # 11. Borrowings Borrowings has been presented as follows in the balance sheet: \| \| \| \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| DKK million \| \| \| \| Non-current liability \| \| \| 1,167.3 \| 1,175.7 \| 1,264.9 \| \| Current liability \| \| \| 0.0 \| 0.6 \| 0.0 \| \| Total borrowings \| \| \| 1,167.3 \| 1,176.3 \| 1,264.9 \| \| \| Currency \| Maturity \| Fixed or floating interest \| Loan costs \| Nominal value \| Fair value \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| \| \| DKK million \| \| \| Bank loan \| EUR \| 2023 \| Floating \| 26.4 \| 1,106.1 \| 1,079.7 \| \| Bank loan \| DKK \| 2023 \| Floating \| 4.4 \| 92.0 \| 87.6 \| \| Total borrowings 31 March 2018 \| \| \| \| 30.8 \| 1,198.1 \| 1,167.3 \| \| Bank loan \| EUR \| 2023 \| Floating \| 31.0 \| 1,104.1 \| 1,073.1 \| \| Bank loan \| NOK \| 2023 \| Floating \| 11.3 \| 114.0 \| 102.7 \| \| Total borrowings 31 March 2017 \| \| \| \| 42.3 \| 1,218.0 \| 1,175.7 \| \| Bank loan \| EUR \| 2023 \| Floating \| 27.6 \| 1.105.1 \| 1,077.6 \| \| Bank loan \| NOK \| 2023 \| Floating \| 5.2 \| 105.2 \| 100.0 \| \| Bank loan \| DKK \| 2023 \| Floating \| 4.6 \| 92.0 \| 87.4 \| \| Total borrowings 31 December 2017 \| \| \| \| 37.4 \| 1,302.3 \| 1,264.9 \| The fair value of bank loans is deemed to approximate the nominal value of the loans. The carrying value of the loans is based on the amortised cost method and upon initial recognition recognised at the loan proceeds received less cost to obtain the loans. The loan costs are amortised over the life of the loans based on the effective interest rate method. The repayment profile for the bank debt is conditional on the Group complying with certain financial ratios (covenants). For the period 1 January – 31 March 2018 the Group complied with the covenants defined. According to the loan agreement, all distribution of dividends has to be approved by the lender. --- F-13 # 12. Other payables \| \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| Interest and currency rate swaps stated at fair value \| 25.2 \| 26.7 \| 28.0 \| \| Wages and salaries, payroll taxes, social security costs, etc. payable \| 14.1 \| 17.7 \| 39.3 \| \| Holiday pay obligation \| 89.7 \| 65.9 \| 70.6 \| \| VAT and duties \| 42.1 \| 26.8 \| 57.6 \| \| Other costs payable \| 28.8 \| 20.4 \| 27.6 \| \| Total other payables \| 199.9 \| 157.7 \| 223.1 \| # 13. Provisions \| \| 31 March 2018 \| 31 March 2017 \| 31 December 2017 \| \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| Onerous contracts and warranty obligations at 1 January \| 30.4 \| 8.9 \| 8.9 \| \| Used in the period \| 0.0 \| (6.4) \| (6.4) \| \| Provisions for the period \| 0.0 \| 0.0 \| 27.9 \| \| Onerous contracts and warranty obligations at end of period \| 30.4 \| 2.5 \| 30.4 \| # 14. Collateral provided and contingent liabilities There have been no changes in collateral provided and contingent liabilities during 1 January – 31 March 2018 compared to the combined financial statements as of 31 December 2017. # 15. Related party transactions - Related parties with a controlling interest FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP (jointly referred to as the "Significant Shareholders"). - Transactions with related parties The Group has had the following transactions with other companies controlled by the Significant Shareholders: \| \| 1 January – 31 March \| \| \| --- \| --- \| --- \| \| \| 2018 \| 2017 \| \| \| DKK million \| \| \| Revenue \| 2.5 \| 0.3 \| --- # Introduction The Company was formed on 16 April 2018 for the purpose of acquiring NC TopCo A/S (the ultimate parent holding company of the Group prior to the effectiveness of the IPO Reorganisation) in connection with the IPO Reorganisation, pursuant to which the Existing Group Shareholders will become shareholders in the Company, through a series of share exchanges. The Company does not have any material assets or liabilities and will not conduct any operating activities prior to the effectiveness of the IPO Reorganisation and have a financial history. NC TopCo A/S was formed on 14 December 2015 and prepared stand-alone financial statements for the period 14 – 31 December 2015 without any activities. On 1 February 2016, NC TopCo A/S acquired the entire share capital of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) (through the intermediary holding company; NC NewCo A/S), hence the published consolidated financial statements for 2016 for NC TopCo A/S and subsidiaries, cover operations for the period 1 February – 31 December 2016. In addition, NC TopCo A/S has published consolidated financial statements for 2017. Also NC TopCo A/S is as such not able to present a meaningful full three-year financial history. Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) has existed for a number of years and a full three-year financial history exist for Netcompany A/S and its subsidiaries. # Combined financial statements To present a full meaningful three-year financial history, the Group presents the financial information set out on pages F-20-F-49 as combined financial statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as of and for the years ended 31 December 2017, 2016 and 2015, prepared as follows: ## 2015 The audited consolidated financial statements for 2015 for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries was prepared in accordance with the Danish Financial Statements Act and approved by the executive management and board of directors of Netcompany A/S on 29 January 2016. The consolidated figures for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) used in the combined financial statements derive from the consolidated financial statements for 2016 where Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) prepared its consolidated financial statements in accordance with IFRS as adopted by the EU including restated figures for 2015. The audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) for 2016 was approved by the executive management and board of directors of Netcompany A/S on 23 February 2017. In the income statement for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries for 2015, cost items were presented based on their nature. In the combined financial statements, cost item are presented based on their function. Comparative figures have been changed accordingly. ## 2016 In the statement of comprehensive income and in the cash flow statement for 2016, the financial figures for January 2016 have been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries, whereas for the period 1 February to 31 December 2016 the financial figures have been derived from the audited consolidated financial statements for NC TopCo A/S. The consolidated balance sheet as of 31 December 2016 is identical with the audited consolidated balance sheet for NC TopCo A/S. The Statement of Changes in Equity for 2016 has been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries and combined with NC TopCo A/S as of 1 February 2016. The consolidated financial statements of NC TopCo A/S for 2016 was prepared and approved by the executive management and board of directors of NC TopCo A/S on 23 February 2017, and the consolidated financial statements of Netcompany A/S was prepared and approved by the executive management and board of directors of Netcompany A/S on 23 February 2017. F-14 --- The compilation of the statement of comprehensive income and the cash flow statement for 2016 can be summarized as follows: \| Statement of Comprehensive income \| 2016 \| \| \| \| --- \| --- \| --- \| --- \| \| \| Netcompany A/S January \| NC TopCo A/S Feb.-Dec. \| Combined Full year \| \| \| DKK million \| \| \| \| Revenue \| 71.1 \| 828.5 \| 899.6 \| \| Cost of services \| (34.6) \| (492.4) \| (527.0) \| \| Gross profit \| 36.5 \| 336.1 \| 372.6 \| \| Sales and marketing costs \| (0.4) \| (3.3) \| (3.7) \| \| Administrative costs \| (19.7) \| (101.2) \| (120.9) \| \| Special items \| 0.0 \| (35.1) \| (35.1) \| \| Earnings before interest, taxes and amortisation (EBITA) (non-IFRS) \| 16.4 \| 196.5 \| 212.9 \| \| Amortisation \| 0.0 \| (73.8) \| (73.8) \| \| Operating profit (EBIT) \| 16.4 \| 122.7 \| 139.1 \| \| Financial income \| 0.1 \| 1.3 \| 1.4 \| \| Financial expenses \| (0.4) \| (63.7) \| (64.1) \| \| Profit before tax \| 16.1 \| 60.3 \| 76.4 \| \| Tax on profit for the year \| (0.1) \| (43.6) \| (43.6) \| \| Profit for the year \| 16.0 \| 16.7 \| 32.8 \| \| Other comprehensive income \| \| \| \| \| Items that may be reclassified subsequently to profit or loss \| \| \| \| \| Cash flow hedging, net fair value gain / (loss) \| 0.0 \| (51.0) \| (51.0) \| \| Foreign currency translation subsidiaries \| 0.0 \| (0.1) \| (0.1) \| \| Change in deferred cost of hedging \| 0.0 \| 23.1 \| 23.1 \| \| Tax on other comprehensive income \| 0.0 \| 6.2 \| 6.2 \| \| Other comprehensive income / (loss) \| 0.0 \| (21.9) \| (21.9) \| \| Comprehensive income for the year / (loss) \| 16.0 \| (5.1) \| 10.8 \| \| Cash flow statement \| 2016 \| \| \| \| \| Netcompany A/S January \| NC TopCo A/S Feb.-Dec. \| Combined Full year \| \| \| DKK million \| \| \| \| Operating profit (EBIT) \| 16.4 \| 122.7 \| 139.1 \| \| Depreciation and amortisation \| 0.0 \| 94.2 \| 94.2 \| \| Working capital changes \| 32.9 \| (52.6) \| (19.6) \| \| Free cash flow \| 49.3 \| 164.3 \| 213.6 \| \| Financial income received \| 0 \| 1.3 \| 1.3 \| \| Financial expenses paid \| (0.4) \| (63.7) \| (64.1) \| \| Income taxes paid \| (0.1) \| (33.9) \| (34.0) \| \| Cash flows from operating activities \| 48.8 \| 68.1 \| 116.9 \| \| Net cash outflow on acquisition of subsidiaries \| 0.0 \| (2,516.1) \| (2,516.1) \| \| Acquisition of property, plant and equipment \| 0.6 \| (13.5) \| (13.0) \| \| Acquisition of intangible assets \| (0.9) \| (8.3) \| (9.2) \| \| Other receivables (deposits) \| 0.0 \| (1.5) \| (1.5) \| \| Cash flows from investing activities \| (0.3) \| (2,539.4) \| (2,539.7) \| \| Cash proceeds from issue of share capital \| 0.0 \| 1,265.1 \| 1,265.1 \| \| Cash proceeds from borrowings \| 0.0 \| 1,178.0 \| 1,178.0 \| \| Repayment of borrowings \| 0.6 \| (11.6) \| (11.0) \| \| Dividend paid to previous shareholder of Netcompany A/S \| (116.4) \| 0.0 \| (116.4) \| \| Cash flows from financing activities \| (115.8) \| 2,431.5 \| 2,315.7 \| \| Increase/(decrease) in cash and cash equivalents \| (67.3) \| (39.7) \| (107.0) \| \| Cash and cash equivalents at 1 January \| 111.5 \| 0.0 \| 111.5 \| \| Cash and cash equivalents balances acquired \| 0.0 \| 27.6 \| 27.6 \| \| Effect of exchange rate changes on the balance of cash held in foreign currencies \| 0.0 \| (0.1) \| (0.1) \| \| Cash and cash equivalents at 31 December \| 44.2 \| (12.2) \| 32.0 \| --- 2017 The financial information for 2017 represents the audited consolidated figures for NC TopCo A/S and subsidiaries, which was prepared and approved by the executive management and board of directors of NC TopCo A/S on 5 March 2018. ## Basis of preparation of combined financial statements The combined financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements. The combined financial statements have been prepared in the same format as the consolidated financial statements for 2017 for NC TopCo A/S. The combined financial statements was prepared and approved by the Executive Management and the Board of Directors on 23 May 2018. Deloitte Statsautoriseret Revisionspartnerselskab has audited all underlying financial statements forming basis for the combined financial statements and provided them all with unmodified opinions dated 29 January 2016 for the consolidated financial statements of Netcompany A/S for 2015, dated 23 February 2017 for the consolidated financial statements for 2016 for NC TopCo A/S and dated 23 February 2017 for the consolidated financial statements for 2016 for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and dated 5 March 2018 for the consolidated financial statements for 2017 for NC TopCo A/S, respectively. In addition, Deloitte Statsautoriseret Revisionspartnerselskab has provided the combined financial statements with an unmodified opinion dated 23 May 2018. The combined financial statements in 2016 reflect a change in accounting entity from Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) to NC TopCo A/S in connection with NC TopCo A/S acquiring Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as of 1 February 2016. The acquisition has been accounted for in accordance with IFRS 3 "Business combinations", which among other things resulted in the recognition of intangible assets, which are subject to annual amortization beginning from 1 February 2016. In addition, part of the purchase price was financed with bank borrowings, whereby the income statement is also impacted by increased financing costs from 1 February 2016. These matters should be noted when comparing the 2015 figures with 2016 and 2017. F-16 --- F-17 # Statement by the Board of Directors and Executive Management on the Combined Financial Statements The Executive Management and the Board of Directors have today reviewed and approved the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) (“the Group”) for 2017, 2016 and 2015 prepared solely for the purposes of this Offering Circular as further outlined in the introduction to “Financial Information” on page F-14 and Note 1 on page F-25, which describes the background and basis for preparing Combined Financial Statements. The Combined Financial Statements comprise statement of comprehensive income, balance sheet, statements of changes in equity and cash flows and notes, prepared in accordance with International Financial Reporting Standards as adopted by the EU. In our opinion, the accounting policies applied are appropriate and the Combined Financial Statements give a true and fair view of the Group’s financial position at 31 December 2017, 2016 and 2015 and of the results of their operations and cash flows for 2017, 2016 and 2015 in accordance with International Financial Reporting Standards as adopted by the EU. Copenhagen, 23 May 2018 NC TopCo A/S Board of Directors Pekka Ala-Pietilä Chairman Thomas Broe-Andersen Deputy Chairman Pernille Fabricius Board Member Juha Christensen Board Member Bo Rygaard Board Member Carsten Gomard Board Member Executive Management André Rogaczewski CEO Claus Jørgensen COO Thomas Johansen CFO --- Independent Auditors' Report on the Combined Financial Statements To shareholders and prospective investors We have audited the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) ("the Group") as outlined in Note 1, which describes the background and basis for preparing Combined Financial Statements. The Combined Financial Statements of the Group comprise the combined balance sheets as at 31 December 2017, 2016 and 2015, the combined statements of comprehensive income, changes in cash flows and equity for the years then ended, and notes, comprising a summary of significant accounting policies and disclosure notes. The Combined Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act. In our opinion, the Combined Financial Statements give a true and fair view of the Group's financial position at 31 December 2017, 2016 and 2015 and of the results of the Group's operations and cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's responsibilities for the audit of the Combined Financial Statements. We are independent of the Group in accordance with the International Ethics Standards Board of Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Basis of preparation Without modifying our opinion, we draw attention to note 1, which describe the basis for preparing the Combined Financial Statements in connection with an initial public offering. As a result, the Combined Financial Statements may not be suitable for another purpose. Management's Responsibility Management of NC TopCo A/S is responsible for the preparation of the Combined Financial Statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of the Combined Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Combined Financial Statements, Management is responsible for assessing the Group's ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the Combined Financial Statements unless Management either intends to liquidate the Group or to cease operations or has no realistic alternative but to do so. Auditor's responsibilities for the audit of the Combined Financial Statements Our objectives are to obtain reasonable assurance about whether the Combined Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Combined Financial Statements. F-18 --- As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the Combined Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. - Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the Combined Financial Statements, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Combined Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the Combined Financial Statements, including the disclosures in the notes, and whether the Combined Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Combined Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Copenhagen, 23 May 2018 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No 33 96 35 56 Kim Takata Mücke State-Authorised Public Accountant mne10944 Brian Schmit Jensen State-Authorised Public Accountant mne40050 F-19 --- STATEMENT OF COMPREHENSIVE INCOME \| \| Notes \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| \| 2017 \| 2016 \| 2015 \| \| \| \| DKK million \| \| \| \| Revenue \| \| 1,416.1 \| 899.6 \| 758.1 \| \| Cost of services \| 5 \| (803.4) \| (527.0) \| (446.8) \| \| Gross profit \| \| 612.7 \| 372.6 \| 311.3 \| \| Sales and marketing costs \| 6 \| (9.7) \| (3.7) \| (3.8) \| \| Administrative costs \| 7 \| (201.0) \| (120.9) \| (100.1) \| \| Special items \| 9 \| (32.9) \| (35.1) \| 0.0 \| \| Earnings before interest, tax and amortisation (EBITA) (non-IFRS) \| \| 369.0 \| 212.9 \| 207.4 \| \| Amortisation \| 10 \| (95.9) \| (73.8) \| 0.0 \| \| Operating profit (EBIT) \| \| 273.2 \| 139.1 \| 207.4 \| \| Financial income \| 11 \| 10.2 \| 1.4 \| 3.4 \| \| Financial expenses \| 11 \| (82.3) \| (64.1) \| (3.2) \| \| Profit before tax \| \| 201.0 \| 76.4 \| 207.6 \| \| Tax on profit for the year \| 12 \| (59.4) \| (43.6) \| (19.8) \| \| Profit for the year \| \| 141.6 \| 32.8 \| 187.8 \| \| Basic earnings per share (DKK) \| \| 2.03 \| 0.25 \| \| \| Diluted earnings per share (DKK)* \| \| 2.03 \| 0.25 \| \| \| Other comprehensive income \| \| \| \| \| \| Items that may be reclassified subsequently to profit or loss \| \| \| \| \| \| Cash flow hedging, net fair value gain / (loss) \| \| 12.5 \| (51.0) \| 0.0 \| \| Foreign currency translation subsidiaries \| \| (2.9) \| (0.1) \| 0.0 \| \| Change in deferred cost of hedging \| \| (9.7) \| 23.1 \| 0.0 \| \| Tax on other comprehensive income \| \| (0.6) \| 6.2 \| 0.0 \| \| Other comprehensive income / (loss) \| \| (0.7) \| (21.9) \| 0.0 \| \| Comprehensive income for the year \| \| 141.0 \| 10.8 \| 187.8 \| * Basic and diluted earnings per share have been presented only for the periods where NC TopCo A/S has been the majority shareholder of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) starting from 1 February 2016. Hence the calculation for 2016 only includes the period 1 February – 31 December. The share capital structure of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) was substantially different from the share capital structure of NC TopCo A/S and basic and diluted earnings per share for the periods prior to 1 February 2016 are not comparable to the basic and diluted earnings per share for the periods starting from 1 February 2016. F-20 --- BALANCE SHEET \| \| Notes \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| \| 2017 \| 2016 \| 2015 \| \| \| \| DKK million \| \| \| \| Goodwill \| 14 \| 2,108.7 \| 1,883.9 \| 0.0 \| \| Other intangible assets \| 14 \| 495.2 \| 488.7 \| 4.1 \| \| Intangible assets \| \| 2,603.9 \| 2,372.5 \| 4.1 \| \| Leasehold improvements \| 15 \| 3.9 \| 2.2 \| 2.1 \| \| Equipment \| 15 \| 20.0 \| 14.0 \| 6.4 \| \| Right of use assets \| 15 \| 30.5 \| 25.2 \| 11.9 \| \| Property, plant and equipment \| \| 54.5 \| 41.5 \| 20.4 \| \| Other receivables \| \| 8.8 \| 5.4 \| 4.0 \| \| Deferred tax assets \| 12 \| 0.0 \| 0.2 \| 11.0 \| \| Financial assets \| \| 8.8 \| 5.6 \| 15.0 \| \| Non-current assets \| \| 2,667.2 \| 2,419.6 \| 39.5 \| \| Trade receivables \| 16 \| 445.4 \| 258.2 \| 180.3 \| \| Contract work in progress \| 17 \| 139.2 \| 110.5 \| 80.9 \| \| Receivables from group enterprises \| \| 0.0 \| 0.0 \| 97.7 \| \| Other receivables \| \| 11.0 \| 6.8 \| 1.0 \| \| Prepayments \| \| 12.3 \| 5.3 \| 5.2 \| \| Receivables \| \| 607.8 \| 380.8 \| 365.1 \| \| Cash \| 18 \| 194.5 \| 60.0 \| 111.5 \| \| Current assets \| \| 802.3 \| 440.8 \| 476.6 \| \| Assets \| \| 3,469.5 \| 2,860.4 \| 516.1 \| F-21 --- BALANCE SHEET \| \| Notes \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| \| 2017 \| 2016 \| 2015 \| \| \| \| DKK million \| \| \| \| Share capital \| 19 \| 71.6 \| 69.3 \| 0.6 \| \| Cash flow hedging reserve \| \| (30.0) \| (39.8) \| 0.0 \| \| Foreign currency translation reserve \| \| (2.9) \| (0.1) \| 0.0 \| \| Deferred cost of hedging reserve \| \| 10.4 \| 18.0 \| 0.0 \| \| Retained earnings \| \| 1,594.8 \| 1,213.1 \| 299.8 \| \| Equity \| \| 1,643.9 \| 1,260.5 \| 300.4 \| \| Borrowings \| 20 \| 1,264.9 \| 1,178.0 \| 0.0 \| \| Leasing \| 20 \| 17.6 \| 13.6 \| 6.1 \| \| Deferred tax liability \| 12 \| 112.4 \| 111.2 \| 0.0 \| \| Non-current liabilities \| \| 1,394.9 \| 1,302.8 \| 6.1 \| \| Borrowings \| 20 \| 0.0 \| 28.0 \| 0.0 \| \| Leasing \| 20 \| 13.6 \| 11.7 \| 5.8 \| \| Prepayments received from customers \| 17 \| 36.2 \| 27.5 \| 27.2 \| \| Trade payables \| \| 50.6 \| 26.8 \| 18.6 \| \| Payables to group enterprises \| \| 0.0 \| 0.0 \| 52.1 \| \| Other payables \| 21 \| 223.1 \| 163.3 \| 80.0 \| \| Provisions \| 22 \| 30.4 \| 8.9 \| 5.0 \| \| Income tax payable \| 12 \| 76.8 \| 31.0 \| 20.9 \| \| Current liabilities \| \| 430.7 \| 297.1 \| 209.6 \| \| Liabilities \| \| 1,825.6 \| 1,599.9 \| 215.7 \| \| Equity and liabilities \| \| 3,469.5 \| 2,860.4 \| 516.1 \| F-22 --- STATEMENT OF CHANGES IN EQUITY \| \| Share capital \| Fair value adjustment of interest rate swap \| Exchange differences on translating foreign subsidiaries \| Deferred cost of hedging reserve \| Retained earnings \| Total \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| DKK million \| \| \| \| \| Equity at 1 January 2015 \| 0.6 \| 0.0 \| 0.0 \| 0.0 \| 212.0 \| 212.6 \| \| Profit for the year \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 187.8 \| 187.8 \| \| Other comprehensive income for the year \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| \| Dividend paid \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| (100.0) \| (100.0) \| \| Equity at 31 December 2015 \| 0.6 \| 0.0 \| 0.0 \| 0.0 \| 299.8 \| 300.4 \| \| Equity at 1 January 2016 \| 0.6 \| 0.0 \| 0.0 \| 0.0 \| 299.8 \| 300.4 \| \| Effect of combining Netcompany A/S and NC TopCo A/S equities as of 1 February 2016 (see explanation in note 1) \| (0.1) \| 0.0 \| 0.0 \| 0.0 \| (315.8) \| (315.8) \| \| Capital increase \| 68.8 \| 0.0 \| 0.0 \| 0.0 \| 1,196.3 \| 1,265.1 \| \| Profit for the year \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 32.8 \| 32.8 \| \| Other comprehensive income for the year / (loss) \| 0.0 \| (39.8) \| (0.1) \| 18.0 \| 0.0 \| (21.9) \| \| Equity at 31 December 2016 \| 69.3 \| (39.8) \| (0.1) \| 18.0 \| 1,213.1 \| 1,260.5 \| \| Equity at 1 January 2017 \| 69.3 \| (39.8) \| (0.1) \| 18.0 \| 1,213.1 \| 1,260.5 \| \| Capital increase \| 2.3 \| 0.0 \| 0.0 \| 0.0 \| 240.0 \| 242.4 \| \| Profit for the year \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 141.7 \| 141.7 \| \| Other comprehensive income for the year / (loss) \| 0.0 \| 9.8 \| (2.8) \| (7.6) \| 0.0 \| (0.6) \| \| Equity at 31 December 2017 \| 71.6 \| (30.0) \| (2.9) \| 10.4 \| 1,594.8 \| 1,643.9 \| F-23 --- CASH FLOW STATEMENT \| \| Notes \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| \| \| \| 2017 \| 2016 \| 2015 \| \| \| \| DKK million \| \| \| \| Operating profit (EBIT) \| \| 273.2 \| 139.1 \| 207.4 \| \| Depreciation and amortisation \| 10 \| 129.2 \| 94.2 \| 20.6 \| \| Working capital changes \| 23 \| (95.0) \| (19.6) \| 9.1 \| \| Free cash flow \| \| 307.3 \| 213.6 \| 257.2 \| \| Income taxes paid \| 12 \| (35.4) \| (34.0) \| (20.6) \| \| Financial income received \| 11 \| 1.2 \| 1.3 \| 3.4 \| \| Financial expenses paid \| 11 \| (77.8) \| (64.1) \| (3.2) \| \| Cash flows from operating activities \| \| 195.3 \| 116.9 \| 216.8 \| \| Net cash outflow on acquisition of subsidiaries \| 25 \| (120.3) \| (2,516.1) \| 0.0 \| \| Acquisition of property, plant and equipment \| 15 \| (16.7) \| (13.0) \| (3.0) \| \| Acquisition of intangible assets \| 14 \| (11.1) \| (9.2) \| (5.9) \| \| Other receivables (deposits) \| \| (2.3) \| (1.5) \| (0.6) \| \| Cash flows from investing activities \| \| (150.5) \| (2,539.7) \| (9.6) \| \| Cash proceeds from issue of share capital \| \| 16.7 \| 1,265.1 \| 0.0 \| \| Cash proceeds from borrowings \| 20 \| 92.0 \| 1,178.0 \| 0.0 \| \| Repayment of borrowings \| 20 \| (16.6) \| (11.0) \| (8.6) \| \| Dividend paid to previous shareholder of Netcompany A/S \| \| 0.0 \| (116.4) \| (100.0) \| \| Cash flows from financing activities \| \| 92.2 \| 2,315.7 \| (108.6) \| \| Increase in cash and cash equivalents \| \| 137.0 \| (107.0) \| 98.6 \| \| Cash and cash equivalents at 1 January \| 18 \| 32.0 \| 111.5 \| 12.9 \| \| Cash and cash equivalents balances acquired \| \| 26.3 \| 27.6 \| 0.0 \| \| Effect of exchange rate changes on the balance of cash held in foreign currencies \| \| (0.8) \| (0.1) \| 0.0 \| \| Cash and cash equivalents at 31 December \| 18 \| 194.5 \| 32.0 \| 111.5 \| F-24 --- NOTES TO THE COMBINED FINANCIAL STATEMENTS ## 1. Accounting policies The combined financial statements consist of the activities of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries for the period 1 January 2016 to 31 January 2016, and from 1 February 2016, the combined financial statements consist of the activities of NC TopCo A/S and subsidiaries, including Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and its subsidiaries, with 1 February 2016 being the date where the Significant Shareholders acquired a majority stake in the Group. ## 2015 The financial information for 2015 represents the audited consolidated figures for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries as presented as comparative figures in the 2016 consolidated financial statements prepared in accordance with IFRS as adopted by the EU. In the income statement for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries for 2015, cost items were presented based on their nature. In the combined financial statements, cost item are presented based on their function. Comparative figures have been changed accordingly. ## 2016 In the statement of comprehensive income and in the cash flow statement for 2016, the financial figures for January 2016 have been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries, whereas for the period 1 February to 31 December 2016 the financial figures have been derived from the audited consolidated financial statements for NC TopCo A/S. The balance sheet as of 31 December 2016 is identical with the audited consolidated balance sheet for NC TopCo A/S. The Statement of Changes in Equity for 2016 has been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries and combined with NC TopCo A/S as of 1 February 2016. In order to avoid double counting of equities as of 1 February 2016 where the Significant Shareholders acquired a majority stake in the Group, an elimination adjustment have been included in the Statement of Changes in Equity as of 1 February 2016. ## 2017 The financial information for 2017 represents the audited consolidated figures for NC TopCo A/S and subsidiaries. The combined financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements. The combined financial statements are presented in DKK, which is considered the functional currency of the Group's activities. The figures are prepared in accordance with IFRS standards and interpretations applicable to the 2017 financial year. Please refer to note 3 for a discussion of the impact from implementing IFRS 9, 15 and 16 with effect for the 2017 financial year. ## Combination principles The combined financial statements are prepared by adding together financial statement items of a uniform nature. The financial statements used for combination purposes have been prepared applying the Group's accounting policies. Upon combining the financial information for NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S), respectively, for the periods described above, with their respective subsidiaries, intra-group income and expenses, intragroup accounts and dividends as well as profits and losses on transactions between the combined entities are eliminated. ## Foreign currency translation On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have not F-25 --- been settled at the balance sheet date are translated using the exchange rate at the balance sheet date. Exchange differences that arise between the rate at the transaction date and the one in effect at the payment date or the rate at the balance sheet date are recognised in the income statement of comprehensive income as financial income or financial expenses. Property, plant and equipment, intangible assets, and other non-monetary assets that have been purchased in foreign currencies and are measured based on historical costs are translated using historical rates. When subsidiaries, which present their financial statements in a functional currency different from DKK are included in the combined financial statements, the items of the income statement are translated at the average exchange rates. Exchange differences arising out of the translation of foreign subsidiaries' balance sheet items at the beginning of the year using the balance sheet date exchange rates as well as out of the translation of income statements from average rates to the exchange rates at the balance sheet date are recognised in other comprehensive income. ## Statement of comprehensive income ### Revenue The Group's primary service offerings include information technology consulting services and operations solutions. Consulting services are generally provided on either a time-and-material basis or as fixed-price contract basis. Revenue from time-and-material contracts is recognised as hours are delivered and direct expenses are incurred. Revenue from fixed-price contracts is recognised under the percentage-of-completion method. whereby revenue is recognised based on hours incurred to date as a percentage of the total estimated costs of hours to fulfil the contract. Revenue from operations solutions is recognised in the period the solutions are provided, which will either be based on output measures or using the straight-line method over the term of the contracts. ### Special items Special items are non-recurring costs or income recorded in the income statement which cannot directly be attributed to Groups ordinary activities. Such costs and income comprises expenses for restructuring, fundamental structural changes in the business, M&A and strategic considerations regarding the future of the group. They are therefore presented separately to provide a more comparable basis for assessing the underlying performance. Key assumptions involve judgment from Management in identifying and separating special income or expense items from other items in the income statement. These items are carefully considered in order to ensure correct presentation. See note 9. ## Cash flow statement The cash flow statement shows cash flows from operating, investing and financing activities as well as cash and cash equivalents at the beginning and the end of the financial year. Cash flows from operating activities are presented using the indirect method and calculated as the operating profit/ loss adjusted for non-cash operating items, working capital changes as well as financial income, financial expenses and income taxes paid. Cash flows from investing activities comprise payments in connection with acquisition of subsidiaries, activities and fixed asset investments and proceeds from sale of property, plant and equipment. Cash flows from financing activities comprise cash changes in the size or composition of the Group's share capital and related costs as well as the raising of loans, installments on interest-bearing debt payment relating to leasing obligations and dividend payments to shareholders. Cash and cash equivalents comprise cash. F-26 --- 2. Significant accounting estimates, assumptions and uncertainties When applying the accounting policies, Management has to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that cannot be directly derived from other sources. Such estimates and assumptions are based on historical experience and other relevant factors. The actual results may deviate from such estimates. Estimates and the underlying assumptions are reassessed on a regular basis. Any changes in the accounting estimates are recognised in the accounting period in which the change was made as well as in future accounting periods if the change affects the period in which it was made as well as subsequent accounting periods. In the financial statements for 2017, it is particularly important to note the following assumptions and uncertainties: A. Contract work in progress Contract work in progress for fixed-priced-contracts is measured at the selling price of work completed at the balance sheet date, and the selling price is calculated on the basis of contracted income and the determined stage of completion. Stage of completion is determined making estimates of future hours and other project costs. The Group reviews its contract portfolio on a regular basis. If circumstances arise that change the original estimates of the selling price of the contracts or costs, revisions to estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in the income statement in the period in which the circumstances giving rise to the revisions become known by the Group. See note 17. B. Provisions for onerous contracts and warranty obligations As part of its regular review of the contract portfolio, the Group may identify contracts where the completion of a contract most likely will result in a negative contribution. In these circumstances, the Group will record a provision to cover the unavoidable loss. Provision for warranty obligations are based on past history and provisions for specific customer cases. The estimates of the provision may be subject to significant management judgement and uncertainty depending on project complexity and on whether there are any disputes with customers in relation to project performance, claims and counter claims, contract interpretation and alike. See note 22. C. Business combinations Acquisitions of businesses are accounted for using the acquisition method. The cost of an acquisition is measured as the consideration transferred for assets acquired and liabilities assumed in the business combination measured at fair value on acquisition date. 2017 On the 25 October 2017, the Group acquired the entire share capital of Hunter Macdonald Ltd at a price of DKK 345.9m, of which DKK 120.3m was paid in cash and DKK 225.6m was settled by the issue of share capital in NC Topco A/S. Accounting for a business combination requires Management to estimate the fair value of the assets, such as goodwill, customer relationships and order backlog. Key assumptions for the methods applied in determining the fair value are based on the present value of future cash flows, churn rates or the expected cash flows related to the specific asset. Estimates and methodologies used, can have a material impact on the respective values and ultimately the amount of the fair values recognised. IFRS 3 “Business Combinations” requires that the Group recognize, separately from goodwill, the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The recognised goodwill amount is allocated to the activities of the Group generating separate payments (cash generating units). Determination of cash generating units complies with the management structure and management accounting and reporting of the Group. Goodwill is not amortised, but tested at least once a year for impairment. F-27 --- The Group has performed a review of the balance sheet of Hunter Macdonald Ltd at the acquisition date 25 October 2017, for the purposes of identifying non-recognised assets and liabilities, and for identifying any fair value adjustments to the assets and liabilities already recognised in the balance sheet of Hunter Macdonald Ltd at the acquisition date. As part of this process the following unrecognised assets and liabilities were identified in connection with the acquisition in 2017: - Order back-log, DKK 31.5m Fair value of order back-log has been determined on basis of Net Operating Profit Less Adjusted Taxes (NOPLAT) from the order back-log at the acquisition date, adjusted for amounts already included in the recognition of fair value of other identified intangible assets, and discounted with the internal required rate of return of 13.2% p.a. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. - Customer relationships, DKK 75.9m Fair value of customer relationships has been determined on basis of forecasted NOPLAT from acquisition date in October 2017 to 2024 adjusted for expected churn-rate and discounted with the internal required rate of return of 13.2% p.a. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. - Deferred tax liability, DKK 20.4m Deferred tax on the remeasurement of order back-log and customer relationships reflects and is equal to the total increase in the fair value of the order back-log and customer relationships as a result of increasing the fair values with the tax amortisation benefit factor. - Goodwill arising on acquisition, DKK 214.7m Based on the measurement of identifiable assets and liabilities at their fair values, the difference between the cash consideration and the fair value of the identified net assets equals DKK 214.7m, which amount represents the goodwill from the acquisition of Hunter Macdonald Ltd. In addition, the consideration paid for the business combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of Hunter Macdonald Ltd. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. Goodwill is also not deductible for tax purposes. For all other identified assets and liabilities Management determined that the book values in the balance sheet of Hunter Macdonald Ltd at 25 October 2017 were equal to their fair values. - Summary of acquired balance sheet of Hunter Macdonald at the take-over date: \| \| 2017 Hunter Macdonald \| \| \| --- \| --- \| --- \| \| \| Book value on acquisition date \| Opening balance sheet \| \| \| DKK million \| DKK million \| \| Cash and cash equivalents \| 26.3 \| 26.3 \| \| Trade and other receivables \| 51.7 \| 51.7 \| \| Work in progress \| 3.3 \| 3.3 \| \| Right of use assets \| 1.0 \| 1.0 \| \| Plant and equipment \| 0.6 \| 0.6 \| \| Goodwill \| 0.0 \| 214.7 \| \| Customer Relationships \| 0.0 \| 75.9 \| \| Order back-log \| 0.0 \| 31.5 \| \| Deferred tax of the transaction \| 0.0 \| (20.4) \| \| Trade and other payables \| (38.7) \| (38.7) \| \| Consideration transferred \| \| 345.9 \| --- - Revenue and profit contribution: The acquisition of Hunter Macdonald Ltd contributed revenues of DKK 61.9m and net profit of DKK 12.4m to the Group for the period from 25 October to 31 December 2017. Had the acquisition occurred on 1 January 2017 consolidated pro-forma revenue and profit for the year ended 31 December 2017 would have been increased by DKK 286.3m and DKK 21.0m, respectively. These amounts have been calculated using the subsidiary's results and adjusting them for: - differences in the accounting policies between the Group and the subsidiary and - the additional depreciation that would have been charged assuming the fair value adjustments to identifiable intangible assets had applied from 1 January 2017 together with the consequential tax effects. 2016 On 1 February 2016, the Group acquired the entire share capital of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and its subsidiaries at a price of DKK 2,320.4m in cash. Furthermore, on 22 November 2016, the Group acquired the entire share capital of Mesan AS (subsequently renamed to Netcompany AS) which is located in Norway. The consideration amounted to DKK 195.6m in cash. After the acquisition Mesan AS has changed its name to Netcompany AS. Assets acquired and liabilities recognised at the dates of acquisition are summarised above. The acquisitions have strengthened the Group's position on the European market and added a strong partner for Group. Goodwill represents the value of the current workforce and potential synergies expected from integration within the Group. \| \| 2016 Netcompany A/S* (Denmark) \| \| \| 2016 Netcompany AS (Norway) \| \| --- \| --- \| --- \| --- \| --- \| \| \| Book value on acquisition date \| Opening balance sheet \| Book value on acquisition date \| Opening balance sheet \| \| \| DKK million \| DKK million \| DKK million \| DKK million \| \| Cash and cash equivalents \| 44.4 \| 44.4 \| 27.4 \| 27.4 \| \| Software \| 4.5 \| 4.5 \| 0.0 \| 0.0 \| \| Trade and other receivables \| 182.8 \| 182.8 \| 26.8 \| 26.8 \| \| Work in progress \| 78.7 \| 78.7 \| 0.0 \| 0.0 \| \| Deferred tax asset \| 0.9 \| 0.9 \| 0.1 \| 0.1 \| \| Plant and equipment \| 12.3 \| 12.3 \| 0.5 \| 0.5 \| \| Goodwill \| 0.0 \| 1,765.2 \| 0.0 \| 118.7 \| \| Customer Relationships \| 0.0 \| 205.5 \| 0.0 \| 63.0 \| \| Order back-log \| 0.0 \| 57.5 \| 0.0 \| 7.0 \| \| Technology \| 0.0 \| 52.9 \| 0.0 \| 0.0 \| \| Brand \| 0.0 \| 167.8 \| 0.0 \| 0.0 \| \| Corporate tax \| (20.8) \| (20.8) \| (4.1) \| (4.1) \| \| Deferred tax of the transaction \| 0.0 \| (106.4) \| 0.0 \| (17.5) \| \| Prepayments from costumers \| (25.2) \| (25.2) \| 0.0 \| 0.0 \| \| Trade and other payables \| (99.7) \| (99.7) \| (26.2) \| (26.1) \| \| Consideration transferred \| \| 2,320.4 \| \| 195.6 \| * subsequently renamed to Netcompany Holding I A/S In 2017, the Group has made an additional payment of DKK 10.1m, which has been added to goodwill for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S). - Revenue and profit contribution The acquisition of Mesan AS (subsequently renamed to Netcompany AS) contributed revenues of DKK 11.7m and net profit of DKK (2.6)m to the Group for the period from 22 November to 31 December 2016. F-29 --- Had the acquisition occurred on 1 January 2016 consolidated pro-forma revenue and profit for the year ended 31 December 2016 would have been increased by DKK 106.6m and DKK 20.9m respectively. These amounts have been calculated using the subsidiary’s results and adjusting them for: - differences in the accounting policies between the Group and the subsidiary and - the additional depreciation that would have been charged assuming the fair value adjustments to identifiable intangible assets had applied from 1 January 2016 together with the consequential tax effects. ## D. Impairment assessment of goodwill and other intangible assets relating to business acquisitions The Group has recognised goodwill and certain other intangible assets from the acquisitions of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) (1 February 2016), Netcompany AS (22 November 2016) and Hunter Macdonald Ltd (25 October 2017), as further outlined in Notes 14 and 25. Since the acquisition of Hunter Macdonald Ltd (subsequently renamed to Netcompany UK Ltd) took place in the last quarter of 2017, Management has determined that the carrying value of goodwill and the other identified intangible assets is at least equal to their fair values. Management has therefore concluded that goodwill and related intangible assets are not impaired, and no detailed impairment test has been deemed necessary at 31 December 2017 for Hunter Macdonald Ltd In 2018 the goodwill and the other identified intangibles assets will be tested at least once a year. For impairment test of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and Netcompany AS, see note 14. ## E. Share based payment A number of key employees of the Group hold shares directly or indirectly in NC TopCo A/S. The key employees participate as shareholders on the same terms and at the same price as the other shareholders of NC TopCo A/S. On this basis Management has concluded that NC TopCo A/S is not subject to the requirements of IFRS 2 “Share-based Payment” and since the key employees have acquired shares at the same price as other shareholders, there are no deemed service cost to be recognized relating to the key employees holding shares in NC TopCo A/S. ## 3. Effect of the change in accounting policies In 2017 certain new standards or amendments and revised accounting standards and interpretations issued by IASB have been early adopted by the Group. The following standards have been fully implemented in 2017 and comparative figures for 2016 and 2015 have been adjusted accordingly. ### IFRS 9 “Financial instruments” The date of initial application (i.e. the date on which the Group has assessed its existing financial assets and financial liabilities in terms of the requirements of IFRS 9) is 1 January 2015. Accordingly, the Group has applied the requirements of IFRS 9. The implementation of IFRS 9 has not affected the classification and measurement of the Group’s financial instruments compared to classification and measurement applied in the past financial statements. Financial assets and liabilities classified as held-to-maturity and loans and receivables under IAS 39 that were measured at amortised cost continue to be measured at amortised cost under IFRS 9 as they are held within a business model to collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal amount outstanding. The Group has entered into a currency swap and an interest swap to hedge currency and interest rate risks, respectively. Both swap contracts are measured at fair value. For the currency swap, the fair value of the difference between EUR and DKK has been reflected in financial income, whereas the fair value relating to the time value has been reflected in other comprehensive income and are shown as “Deferred cost of hedging reserve” in equity. The interest swap has been valued at fair value with fair value changes reflected in other comprehensive income and as “Cash flow hedging reserve” in equity. The application of IFRS 9 has not changed the measurement or classification of swaps. F-30 --- The effect of the change from the 'incurred loss' model in IAS 39 to the 'expected credit loss' model in IFRS 9 is immaterial due to the low credit risk in the Group. Therefore, the implementation of IFRS 9 has not had material impact on the financial position or performance of Group. Credit risk is described in note 24 as well. ## IFRS 15 "Revenue from Contracts with Customers" IASB has issued IFRS 15 "Revenue from Contracts with Customers". This standard replaces IAS 11 and IAS 18 and sets out the principles for recognition, measurement, presentation and disclosure of revenue from contracts with customers. The Group has decided to early adopt IFRS 15 from 1 January 2017 with change of comparative figures for 2016 and 2015. The transition to IFRS 15 have not had any significant impact on revenue, cash-flows or equity for 2017, 2016 or 2015, since under the past practice the Group recognised revenue in accordance with the same principles as set out by IFRS 15. IFRS 15 introduces a single model to deal with revenue from contracts with customers. Its core principle is that an entity should recognise revenue based on the transfer of promised goods or services to customers with an amount that reflects the consideration to which the entity expects to be entitled to for those goods or services provided to customers. Only when it comes to subscriptions, which is considered to be an insignificant type of revenue, the implementation of IFRS 15 has changed the recognition of income. Subscriptions were previously recognised on the date of invoicing. They are now recognized over the subscription period. The effect of this is a total of DKK 1.7m of revenue now being recognised in 2018 instead of 2017. There was no effect in 2016 or 2015, and therefore no recognition of revenue in 2017 related to 2016 and in 2016 related to 2015, respectively. ## IFRS 16 "Leases" This standard replaces IAS 17 and sets out the principles for recognition, measurement, presentation and disclosure of leases. IFRS 16 uses a single lessee accounting model and requires recognition of assets and liabilities for almost all leases which results in an increase of fixed assets and total financial debt. The Group decided to implement IFRS 16 in 2017 applying the "full retrospective" approach, which means restating opening retained earnings as if IFRS 16 had always been applied and preparing comparative figures according to IFRS 16. The Lease liability is determined as present value of the remaining payments using the borrowing rate of the entities. The right of use assets are recognised with an amount equal to the initial amount of the lease liability less depreciation. Accounting for leases is further described in note 15. ## 4. Segment information \| Strategic business areas \| Description \| Operating segments \| Geographic segments \| \| \| --- \| --- \| --- \| --- \| --- \| \| Public \| Public companies or companies acting as a public company seen from a business aspect. \| Denmark, Norway & United Kingdom \| Denmark, Norway, United Kingdom, Poland & Vietnam \| \| \| Private \| All other companies \| Denmark, Norway & United Kingdom \| Denmark, Norway, United Kingdom, Poland & Vietnam \| \| \| Strategic business area \| \| \| Public 2017 \| Private 2017 \| \| \| \| \| DKK million \| \| \| Development Revenue \| \| \| 440.4 \| 206.5 \| \| Maintenance Revenue \| \| \| 289.8 \| 479.4 \| \| Total Revenue \| \| \| 730.2 \| 685.9 \| \| EBITA (non-IFRS) \| \| \| 137.2 \| 231.9 \| --- F-32 \| Strategic business area \| \| \| Public 2016 \| Private 2016 \| Total 2016 \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| DKK million \| \| \| \| Development Revenue \| \| \| 166.7 \| 271.8 \| 438.4 \| \| Maintenance Revenue \| \| \| 201.7 \| 259.5 \| 461.2 \| \| Total Revenue \| \| \| 368.3 \| 531.3 \| 899.6 \| \| EBITA (non-IFRS) \| \| \| 65.5 \| 147.4 \| 212.9 \| \| Strategic business area \| \| \| Public 2015 \| Private 2015 \| Total 2015 \| \| \| \| \| DKK million \| \| \| \| Development Revenue \| \| \| 136.8 \| 210.2 \| 347.0 \| \| Maintenance Revenue \| \| \| 174.7 \| 236.4 \| 411.1 \| \| Total Revenue \| \| \| 311.5 \| 446.6 \| 758.1 \| \| EBITA (non-IFRS) \| \| \| 80.7 \| 126.7 \| 207.4 \| \| Segment information related to operating entities \| Denmark 2017 \| Norway 2017 \| United Kingdom 2017 \| Other 2017 \| \| \| \| \| DKK million \| \| \| \| \| Revenue from external customers \| \| 1,220.3 \| 133.9 \| 61.9 \| 0.0 \| \| EBITA, operating entities (non-IFRS) \| \| 329.0 \| 27.8 \| 12.4 \| 0.0 \| \| Allocated cost \| \| 3.7 \| 3.2 \| 0.0 \| (6.9) \| \| EBITA, reported in legal entities (non-IFRS) \| \| 332.6 \| 31.0 \| 12.4 \| (6.9) \| \| Segment information related to operating entities \| Denmark 2016 \| Norway 2016 \| United Kingdom 2016 \| Other 2016 \| \| \| \| \| DKK million \| \| \| \| \| Revenue from external customers \| \| 887.9 \| 11.7 \| 0.0 \| 0.0 \| \| EBITA, operating entities (non-IFRS) \| \| 210.9 \| 2.0 \| 0.0 \| 0.0 \| \| Allocated cost \| \| (25.5) \| 0.0 \| 0.0 \| 25.5 \| \| EBITA, reported in legal entities (non-IFRS) \| \| 185.5 \| 2.0 \| 0.0 \| 25.5 \| \| Segment information related to operating entities \| Denmark 2015 \| Norway 2015 \| United Kingdom 2015 \| Other 2015 \| \| \| \| \| DKK million \| \| \| \| \| Revenue from external customers \| \| 758.1 \| 0.0 \| 0.0 \| 0.0 \| \| EBITA, operating entities (non-IFRS) \| \| 207.4 \| 0.0 \| 0.0 \| 0.0 \| \| Allocated cost \| \| (22.7) \| 0.0 \| 0.0 \| 22.7 \| \| EBITA, reported in legal entities (non-IFRS) \| \| 184.7 \| 0.0 \| 0.0 \| 22.7 \| \| Segment information related to geographical areas \| Denmark 2017 \| Norway 2017 \| Poland 2017 \| United Kingdom 2017 \| Vietnam 2017 \| \| \| \| DKK million \| \| \| \| \| Revenue from external customers \| \| 1,220.3 \| 133.9 \| 0.0 \| 61.9 \| \| Revenue from internal sales \| \| 15.6 \| 0.0 \| 114.2 \| 0.0 \| \| Revenue, geographical areas (non-IFRS) \| \| 1,235.9 \| 133.9 \| 114.2 \| 61.9 \| \| EBITA, geographical areas (non-IFRS) \| \| 278.7 \| 30.9 \| 47.1 \| 12.1 \| \| Allocated cost \| \| 50.3 \| (3.2) \| (47.1) \| 0.3 \| \| EBITA, geographical areas (non-IFRS) \| \| 329.0 \| 27.7 \| 0.0 \| 12.4 \| --- F-33 \| Segment information related to geographical areas \| Denmark 2016 \| Norway 2016 \| Poland 2016 \| United Kingdom 2016 \| Vietnam 2016 \| Total 2016 \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| Revenue from external customers \| 887.9 \| 11.7 \| 0.0 \| 0.0 \| 0.0 \| 899.6 \| \| Revenue from internal sales \| 0.1 \| 0.0 \| 59.0 \| 0.0 \| 0.0 \| 59.1 \| \| Revenue, geographical areas (non-IFRS) \| 888.0 \| 11.7 \| 59.0 \| 0.0 \| 0.0 \| 958.7 \| \| EBITA, geographical areas (non-IFRS) \| 178.8 \| 2.0 \| 32.2 \| 0.0 \| 0.0 \| 212.9 \| \| Allocated cost \| 32.2 \| 0.0 \| (32.2) \| 0.0 \| 0.0 \| 0.0 \| \| EBITA, geographical areas (non-IFRS) \| 210.9 \| 2.0 \| 0.0 \| 0.0 \| 0.0 \| 212.9 \| \| Segment information related to geographical areas \| Denmark 2015 \| Norway 2015 \| Poland 2015 \| United Kingdom 2015 \| Vietnam 2015 \| Total 2015 \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| Revenue from external customers \| 758.1 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 758.1 \| \| Revenue from internal sales \| 0.3 \| 0.0 \| 33.4 \| 0.0 \| 0.0 \| 33.7 \| \| Revenue, geographical areas \| 758.4 \| 0.0 \| 33.4 \| 0.0 \| 0.0 \| 791.8 \| \| EBITA, geographical areas (non-IFRS) \| 184.4 \| 0.0 \| 23.0 \| 0.0 \| 0.0 \| 207.4 \| \| Allocated cost \| 23.0 \| 0.0 \| (23.0) \| 0.0 \| 0.0 \| 0.0 \| \| EBITA, geographical areas (non-IFRS) \| 207.4 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 207.4 \| ## 5. Costs of services \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Project costs \| 166.9 \| 80.0 \| 60.8 \| \| Staff costs, see note 8 \| 624.1 \| 438.5 \| 376.5 \| \| Depreciation, see note 10 \| 10.7 \| 7.5 \| 9.3 \| \| Guarantee fees \| 1.7 \| 1.0 \| 0.1 \| \| Total costs of services \| 803.4 \| 527.0 \| 446.8 \| ## Accounting principles Project costs comprise external consultants, subscriptions etc. Staff costs comprise wages and salaries for consultants incurred to achieve revenue. Depreciation comprise depreciation and impairment losses relating to Property, plant and equipment used for projects of the Group that are directly incurred to achieve revenue for the year. Costs of services are recognized income as the projects progresses. ## 6. Sales and marketing costs \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Sales and marketing costs \| 7.1 \| 2.9 \| 3.2 \| \| Staff costs, see note 8 \| 2.6 \| 0.8 \| 0.6 \| \| Total sales and marketing costs \| 9.7 \| 3.7 \| 3.8 \| ## Accounting principles Sales and marketing costs comprise expenses incurred for sale of the Group’s projects. Staff costs comprise wages and salaries for sales staff. In addition, sales and marketing costs comprise advertising costs, travelling and entertainment expenses, etc. as well as depreciation and impairment losses relating to property, plant and equipment attached to the sales and marketing function. --- 7. Administrative costs \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Administrative costs \| 113.4 \| 77.7 \| 65.4 \| \| Staff costs, see note 8 \| 65.0 \| 30.4 \| 23.4 \| \| Depreciation, see note 10 \| 22.6 \| 12.8 \| 11.3 \| \| Total administrative costs excl. amortisation \| 201.0 \| 120.9 \| 100.1 \| 8. Staff costs and remuneration \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Salary and wages \| 664.6 \| 456.1 \| 390.8 \| \| Pension contributions \| 10.1 \| 2.1 \| 2.2 \| \| Other social security costs \| 14.3 \| 5.9 \| 3.9 \| \| Other staff costs \| 2.7 \| 5.6 \| 3.6 \| \| Total staff costs \| 691.7 \| 469.7 \| 400.5 \| \| Staff costs presented under following Income Statement items: \| \| \| \| \| Costs of services \| 624.1 \| 438.5 \| 376.5 \| \| Sales and marketing costs \| 2.6 \| 0.8 \| 0.6 \| \| Administrative costs \| 65.0 \| 30.4 \| 23.4 \| \| Total staff costs \| 691.7 \| 469.7 \| 400.5 \| \| Average number of employees \| 1,256 \| 876 \| 598 \| \| Remuneration to the Executive Management Salaries \| 7.3 \| 9.1 \| 9.1 \| \| Total \| 7.3 \| 9.1 \| 9.1 \| \| Remuneration to the Board of Directors Board fees \| 1.7 \| 0.0 \| 0.0 \| \| Total \| 1.7 \| 0.0 \| 0.0 \| \| Remuneration to Key Personnel Salaries \| 4.1 \| 2.5 \| 0.0 \| \| Total \| 4.1 \| 2.5 \| 0.0 \| For the years ended 31 December 2017, 2016 and 2015, the Group does not have post-employment benefits or share-based payments. Accounting principles Staff costs comprise salaries and wages as well as social security costs, pension contributions, etc for the Group's staff. 9. Special items \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Acquisition related costs \| 15.4 \| 35.1 \| 0.0 \| \| Offer-related costs \| 17.5 \| 0.0 \| 0.0 \| \| Total special items \| 32.9 \| 35.1 \| 0.0 \| F-34 --- # 10. Amortisation and depreciation \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Amortisation \| \| \| \| \| Technology and software \| 10.6 \| 9.7 \| 0.0 \| \| Trademark \| 8.4 \| 7.7 \| 0.0 \| \| Order back-log \| 23.4 \| 17.8 \| 0.0 \| \| Customer relationships \| 53.5 \| 38.6 \| 0.0 \| \| Total amortisation \| 95.9 \| 73.8 \| 0.0 \| \| Depreciation \| \| \| \| \| Technology and software* \| 4.9 \| 3.8 \| 2.9 \| \| Leasehold improvements \| 1.2 \| 0.8 \| 0.8 \| \| Equipment \| 8.5 \| 5.4 \| 8.3 \| \| Right of use assets \| 19.0 \| 10.3 \| 8.6 \| \| Total depreciation \| 33.6 \| 20.3 \| 20.6 \| * Amortisation of technology and software derives from amortisation of assets identified in business acquisitions, whereas depreciation of technology and software derives from purchases of assets as part of the ongoing business Depreciation and amortisation have been presented as follows in the income statement: \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Costs of services \| 10.7 \| 7.5 \| 9.3 \| \| Administrative costs \| 22.6 \| 12.8 \| 11.3 \| \| Amortisation \| 95.9 \| 73.8 \| 0.0 \| \| Total depreciation and amortisation \| 129.2 \| 94.2 \| 20.6 \| ## Accounting principles Please refer to notes 14 & 15. # 11. Financial income and expenses \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Financial income \| \| \| \| \| Interest on corporate income tax \| 0.2 \| 0.0 \| 0.8 \| \| Exchange rate adjustments \| 8.8 \| 0.0 \| 2.5 \| \| Other interest income \| 1.2 \| 1.4 \| 0.1 \| \| Total financial income \| 10.2 \| 1.4 \| 3.4 \| \| Financial expenses \| \| \| \| \| Income tax surcharge \| 2.4 \| 1.3 \| 0.8 \| \| Interest expense, bank loan \| 62.4 \| 53.1 \| 0.0 \| \| Interest expense, leasing \| 0.8 \| 0.7 \| 0.3 \| \| Exchange rate adjustments \| 7.7 \| 1.3 \| 0.0 \| \| Other financial costs \| 9.0 \| 7.7 \| 2.1 \| \| Total financial costs \| 82.3 \| 64.1 \| 3.2 \| ## Accounting principles These items comprise interest income and expenses, currency gains and losses and tax surcharge and tax relief under the Danish Tax Prepayment Scheme. F-35 --- 12. Tax \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Current tax \| 78.4 \| 45.3 \| 20.6 \| \| Adjustment regarding previous years \| 0.0 \| 0.0 \| (0.8) \| \| Change in deferred tax \| (19.0) \| (1.6) \| 0.0 \| \| \| 59.4 \| 43.6 \| 19.8 \| \| Profit/loss before tax \| 201.0 \| 76.4 \| 207.6 \| \| Tax at a rate of 22% (2016: 22%, 2015: 23.5%) \| 44.2 \| 16.8 \| 48.8 \| \| Tax-based value of non-deductible expenses \| 16.0 \| 27.8 \| 1.1 \| \| Adjustment regarding previous years \| 0.0 \| 0.0 \| (0.8) \| \| Tax-based value of utilization of non-capitalised tax loss and unrecognized temporary differences \| 0.0 \| 0.0 \| (26.6) \| \| Effect of different tax rates of subsidiaries \| (0.8) \| (0.9) \| (2.7) \| \| \| 59.4 \| 43.6 \| 19.8 \| \| Effective tax rate \| 29.6% \| 57.2% \| 9.6% \| \| Deferred tax has been presented as follows in the balance sheet: \| \| \| \| \| Deferred tax asset \| 0.0 \| 0.2 \| 11.0 \| \| Deferred tax liability \| (112.4) \| (111.2) \| 0.0 \| \| \| (112.4) \| (111.0) \| 11.0 \| \| Deferred tax: \| \| \| \| \| Non-current assets \| (102.2) \| (102.7) \| 8.1 \| \| Work in progress \| (10.8) \| (8.4) \| (3.4) \| \| Other payables \| 0.6 \| 0.1 \| 0.0 \| \| Tax losses \| 0.0 \| 0.0 \| 6.3 \| \| \| (112.4) \| (111.0) \| 11.0 \| \| Tax payable and tax receivable \| 31 December \| \| \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Tax payable at January 1, net \| 31.0 \| 20.9 \| 22.7 \| \| Foreign exchange adjustments \| (0.6) \| (0.5) \| 0.0 \| \| Addition, acquisition of subsidiaries \| 0.7 \| 4.1 \| 0.0 \| \| Payment relating to prior years \| (4.4) \| (20.8) \| (22.7) \| \| Current tax for the year \| 78.4 \| 45.3 \| 20.6 \| \| Current tax interest for the year \| 2.0 \| 1.3 \| 0.3 \| \| Current tax for the year recognised in other comprehensive income for the year \| 0.7 \| (6.2) \| 0.0 \| \| Payments relating to the current year \| (31.0) \| (13.1) \| 0.0 \| \| Tax payable at December 31, net \| 76.8 \| 31.0 \| 20.9 \| \| Current tax is recognised as follows in the balance sheet: \| \| \| \| \| Tax receivable (assets) \| 0.0 \| 0.0 \| 0.0 \| \| Tax payable (liabilities) \| 76.8 \| 31.0 \| 20.9 \| \| Tax payable at December 31, net \| 76.8 \| 31.0 \| 20.9 \| 2017 \| Deferred tax (liabilities)/assets in relation to: \| Property, plant & equipment \| Intangible assets \| Work in progress \| Other payables \| Tax losses \| Total \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| DKK million \| \| \| \| \| Opening balance 1 January 2017 \| 4.1 \| (106.8) \| (8.4) \| 0.1 \| 0.0 \| (111.0) \| \| Recognised in income \| (0.9) \| 21.7 \| (2.3) \| 0.5 \| 0.0 \| 19.0 \| \| Acquisitions \| 0.0 \| (20.4) \| 0.0 \| 0.0 \| 0.0 \| (20.4) \| \| Exchange difference \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| \| Closing balance 31 December 2017 \| 3.2 \| (105.5) \| (10.7) \| 0.6 \| 0.0 \| (112.4) \| F-36 --- 2016 \| Deferred tax (liabilities)/assets in relation to: \| Property, plant & equipment \| Intangible assets \| Work in progress DKK million \| Other payables \| Tax losses \| Total \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| Opening balance 1 January 2016 \| 5.2 \| 2.9 \| (3.4) \| 0.0 \| 6.3 \| 11.0 \| \| Recognised in income \| (1.3) \| 14.2 \| (5.0) \| 0.0 \| (6.3) \| (1.6) \| \| Acquisitions \| 0.2 \| (123.9) \| 0.0 \| 0.1 \| 0.0 \| (123.6) \| \| Closing balance 31 December 2016 \| 4.1 \| (106.8) \| (8.4) \| 0.1 \| 0.0 \| (111.0) \| 2015 \| Deferred tax (liabilities)/assets in relation to: \| Property, plant & equipment \| Intangible assets \| Work in progress DKK million \| Other payables \| Tax losses \| Total \| \| --- \| --- \| --- \| --- \| --- \| --- \| --- \| \| Opening balance 1 January 2015 \| 5.2 \| 2.9 \| (3.4) \| 0.0 \| 6.3 \| 11.0 \| \| Recognised in income \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| \| Acquisitions \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| \| Closing balance 31 December 2015 \| 5.2 \| 2.9 \| (3.4) \| 0.0 \| 6.3 \| 11.0 \| # Accounting principles Tax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in profit/loss for the year by portion attributable to the profit for the year and recognised directly in other comprehensive income and equity by the portion attributable to entries recognised directly in other comprehensive income and equity. Current tax payable and current tax receivable are recognised in the balance sheet, calculated as tax on taxable income for the year, adjusted for prepaid tax. On calculation of current tax, the tax rates and rules applicable at the balance sheet date are used. Deferred tax is recognised on all temporary differences between the carrying amounts and tax-based values of assets and liabilities using the balance sheet liability method. Deferred tax is calculated on the basis of the planned use of each asset and the settlement of each liability, respectively. Deferred tax is measured using the tax rates and tax rules which — based on acts in force or acts actually in force at the balance sheet date — are expected to apply when the deferred tax is expected to crystallise as current tax. Changes in deferred tax resulting from changed tax rates or tax rules are recognised in profit/loss unless the deferred tax is attributable to transactions previously recognised directly in equity or other comprehensive income. In the latter case, such changes are also recognised directly in equity or other comprehensive income. Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised in the balance sheet at their estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets to be set off against future positive taxable income. At each balance sheet date, it is considered whether sufficient taxable income is likely to arise in the future for the deferred tax asset to be used. # 13. Income Statement classified by function \| \| 1 January – 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Revenue \| 1,416.1 \| 899.6 \| 758.1 \| \| Cost of services, including amortisation \| (803.4) \| (527.0) \| (446.8) \| \| Gross profit \| 612.7 \| 372.6 \| 311.3 \| \| Sales and marketing costs, including amortisation \| (9.7) \| (3.7) \| (3.8) \| \| Administrative costs, including amortisation \| (329.8) \| (229.8) \| (100.1) \| \| Operating profit (EBIT) \| 273.2 \| 139.1 \| 207.4 \| \| Financial income \| 10.2 \| 1.4 \| 3.4 \| \| Financial expenses \| (82.3) \| (64.1) \| (3.2) \| \| Profit before tax \| 201.0 \| 76.4 \| 207.6 \| \| Tax on profit for the year \| (59.4) \| (43.6) \| (19.8) \| \| Profit for the year \| 141.6 \| 32.8 \| 187.8 \| F-37 --- Depreciation and amortisation have been presented as follows in the income statement: \| Costs of services \| 10.7 \| 7.5 \| 9.3 \| \| --- \| --- \| --- \| --- \| \| Sales and marketing costs \| 0.0 \| 0.0 \| 0.0 \| \| Administrative costs \| 118.5 \| 86.6 \| 11.3 \| \| Depreciation and amortisation \| 129.2 \| 94.2 \| 20.6 \| ## 14. Intangible assets \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Goodwill \| \| \| \| \| Cost at 1 January \| 1,883.9 \| 0.0 \| 0.0 \| \| Additional payment \| 10.1 \| 0.0 \| 0.0 \| \| Additions, acquisition of subsidiaries \| 214.7 \| 1,883.9 \| 0.0 \| \| Cost at 31 December \| 2,108.7 \| 1,883.9 \| 0.0 \| \| Carrying amount at 31 December \| 2,108.7 \| 1,883.9 \| 0.0 \| \| Technology and software 2017 \| Trademark 2017 \| Order back-log 2017 \| Customer relationships 2017 \| \| Other intangible assets \| DKK million \| \| \| \| Other intangible assets \| \| \| \| \| Cost at 1 January \| 65.7 \| 167.8 \| 64.4 \| \| Addition \| 0.0 \| 0.0 \| 0.0 \| \| Addition, acquisition of subsidiaries \| 0.0 \| 0.0 \| 31.5 \| \| Cost at 31 December \| 65.7 \| 167.8 \| 95.9 \| \| Amortisation at 1 January \| (13.5) \| (7.7) \| (17.8) \| \| Amortisation for the year \| (15.5) \| (8.4) \| (23.4) \| \| Amortisation at 31 December \| (29.0) \| (16.1) \| (41.2) \| \| Carrying amount at 31 December \| 36.7 \| 151.7 \| 54.7 \| \| Technology and software 2016 \| Trademark 2016 \| Order back-log 2016 \| Customer relationships 2016 \| \| Other intangible assets \| DKK million \| \| \| \| Cost at 1 January \| 14.2 \| 0.0 \| 0.0 \| \| Addition \| 9.2 \| 0.0 \| 0.0 \| \| Addition, acquisition of subsidiaries \| 56.5 \| 167.8 \| 64.4 \| \| Elimination upon acquisition of subsidiaries \| (14.2) \| 0.0 \| 0.0 \| \| Cost at 31 December \| 65.7 \| 167.8 \| 64.4 \| \| Amortisation at 1 January \| (10.1) \| 0.0 \| 0.0 \| \| Amortisation for the year \| (13.5) \| (7.7) \| (17.8) \| \| Elimination upon acquisition of subsidiaries \| 10.1 \| 0.0 \| 0.0 \| \| Amortisation at 31 December \| (13.5) \| (7.7) \| (17.8) \| \| Carrying amount at 31 December \| 52.2 \| 160.1 \| 46.6 \| --- F-39 \| Other intangible assets \| Technology and software 2015 \| Trademark 2015 \| Order back-log 2015 \| Customer relationships 2015 \| \| --- \| --- \| --- \| --- \| --- \| \| Cost at 1 January \| 8.3 \| 0.0 \| 0.0 \| 0.0 \| \| Addition \| 5.9 \| 0.0 \| 0.0 \| 0.0 \| \| Addition, acquisition of subsidiaries \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| \| Cost at 31 December \| 14.2 \| 0.0 \| 0.0 \| 0.0 \| \| Amortisation at 1 January \| (7.2) \| 0.0 \| 0.0 \| 0.0 \| \| Amortisation for the year \| (2.9) \| 0.0 \| 0.0 \| 0.0 \| \| Amortisation at 31 December \| (10.1) \| 0.0 \| 0.0 \| 0.0 \| \| Carrying amount at 31 December \| 4.1 \| 0.0 \| 0.0 \| 0.0 \| ## Accounting principles - Goodwill On initial recognition, goodwill is recognised and measured as the difference between, on one hand, the cost of the acquired subsidiary and, on the other hand, the fair value of the acquired identifiable assets, liabilities and contingent liabilities. The recognised goodwill amount is allocated to the activities of the Group generating separate payments (cash generating units). Determination of cash generating units complies with the management structure and management accounting and reporting of the Group. Goodwill is not amortised, but tested at least once a year for impairment. ## Intangible assets acquired in a business combination Intangible assets acquired in a business combination consists of technology, order back-log, customer relationships and trademark. Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Amortisation is recognised on a straight-line basis over their estimated useful lives: - Technology: 5 years - Order back-log: 3 years - Customer relationships: 5 - 7 years - Trademark: 20 years - Intangible assets acquired separately Intangible assets acquired separately with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. The cost of developed software comprises costs such as salaries and amortisation that are directly attributable to the development projects and are needed to complete the project, recognised from the time at which the development project first qualifies for recognition as an asset. Amortisation is recognised on a straight-line basis over their estimated useful lives: - Software: 3-5 years The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. - Impairment testing Goodwill and other intangibles which are acquired through business combinations are annually tested for impairment. The tests are performed at the end of each reporting period. --- Goodwill is allocated to each of the Group's cash generating unit, and impairment test was performed at the lowest level of the cash generating units representing different business acquisitions. Goodwill specified by cash generating unit appears from note 2 and note 25. The tests show that the recoverable amounts were estimated to be higher than the carrying amounts and therefore no impairment loss has been recognised. In the event that the recoverable amount of the cash generating unit is lower than the carrying amount, the carrying amount is written down to the recoverable amount. For cash generating units, the write-down for impairment is allocated so that any goodwill is written down first, and then any remaining impairment loss is allocated on the other assets of the unit. However, the individual asset may not be written down to an amount below its fair value net of any expected selling costs. The determination of the recoverable amount of a cash generating unit to which goodwill is allocated requires significant Management judgement in determining the various assumptions, such as cash-flow projections, discount rate and terminal growth rates. The sensitivity of the estimated measurement to these assumptions, combined or individually, can be significant. Furthermore, the use of different estimates or assumptions when determining the fair value of such assets may result in different values and could result in impairment changes in future periods. For the purposes of determining the recoverable amount of a terminal growth rate of $2\%$ has been used and a discount rate based on the weighted average cost of capital (WACC) between $13.7\%$ to $15.4\%$ . # 15. Property, plant and equipment \| \| Leasehold improvements 2017 \| Equipment 2017 \| Right of use assets 2017 \| \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| Cost 1 January \| 3.1 \| 19.3 \| 36.3 \| \| Additions \| 2.2 \| 14.5 \| 23.4 \| \| Correction to prior years \| 0.7 \| (0.6) \| 0.0 \| \| Additions, acquisitions of subsidiaries \| 0.0 \| 0.6 \| 1.0 \| \| Disposals \| 0.0 \| (0.6) \| 0.0 \| \| Cost at 31 December \| 5.9 \| 33.3 \| 60.7 \| \| Depreciation 1 January \| (0.8) \| (5.4) \| (11.1) \| \| Depreciation for the year \| (1.2) \| (8.5) \| (19.1) \| \| Disposals \| 0.0 \| 0.6 \| 0.0 \| \| Depreciation at 31 December \| (2.0) \| (13.3) \| (30.2) \| \| Carrying amount at 31 December \| 3.9 \| 20.0 \| 30.5 \| \| \| Leasehold Improvements 2016 \| Equipment 2016 \| Right of use assets 2016 \| \| \| DKK million \| \| \| \| Cost 1 January \| 4.5 \| 38.6 \| 12.7 \| \| Additions \| 0.9 \| 12.1 \| 14.9 \| \| Additions, acquisitions of subsidiaries \| 0.0 \| 0.5 \| 8.7 \| \| Correction, prior years \| 0.0 \| 0.9 \| 0.0 \| \| Elimination upon acquisition of subsidiaries \| (2.3) \| (32.8) \| 0.0 \| \| Cost at 31 December \| 3.1 \| 19.3 \| 36.3 \| \| Depreciation 1 January \| (2.3) \| (32.3) \| (0.8) \| \| Depreciation for the year \| (0.8) \| (5.4) \| (10.3) \| \| Elimination upon acquisition of subsidiaries \| 2.3 \| 32.3 \| 0.0 \| \| Depreciation at 31 December \| (0.8) \| (5.4) \| (11.1) \| \| Carrying amount at 31 December \| 2.2 \| 14.0 \| 25.2 \| --- \| \| Leasehold Improvements 2015 \| Equipment 2015 \| Right of use assets 2015 \| \| --- \| --- \| --- \| --- \| \| \| DKK million \| \| \| \| Cost 1 January \| 4.2 \| 35.9 \| 5.0 \| \| Additions \| 0.3 \| 2.7 \| 15.8 \| \| Disposals \| 0.0 \| 0.0 \| (8.1) \| \| Cost at 31 December \| 4.5 \| 38.6 \| 12.7 \| \| Depreciation 1 January \| (1.5) \| (24.0) \| (0.3) \| \| Depreciation for the year \| (0.8) \| (8.3) \| (8.6) \| \| Disposals \| 0.0 \| 0.0 \| 8.1 \| \| Depreciation at 31 December \| (2.3) \| (32.3) \| (0.8) \| \| Carrying amount at 31 December \| 2.1 \| 6.4 \| 11.9 \| ## Accounting principles - Equipment and leasehold improvements: Equipment and leasehold improvements are measured at cost less accumulated depreciation and impairment losses. Cost comprises the acquisition price, costs directly attributable to the acquisition, and preparation costs of the asset until the time when it is ready to be put into operation. The basis of depreciation is cost less estimated residual value after the end of useful life. Depreciation is calculated on a straight-line basis over their estimated useful lives: - Leasehold improvements: 3-5 years - Equipment: 3-5 years Depreciation methods, useful lives and residual values are reviewed annually. Gains and losses from the sale of property, plant and equipment are calculated as the difference between selling price less selling costs and carrying amount at the time of sale. Gains or losses are recognised in the income statement in the functions to which the assets relate. - Right of use assets: Right of use assets are measured at cost less accumulated depreciation and impairment losses adjusted for any remeasurements of the lease liability where initial cost is equal to the initial amount of the related lease liability. Depreciation is straight-line on basis of the underlying contracts, which are 1-7 years. The Group has entered into leasing contracts regarded as low-value and short-term, all expiring within 6 months. Total commitments relating to the non-canceling period is DKK 0.1m. All other lease contracts are recognised on the balance sheet according to IFRS 16. F-41 --- F-42 # 16. Trade receivables \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Trade receivables \| 445.4 \| 258.2 \| 180.3 \| The carrying amount of trade receivables is assumed to be equal to the fair value: \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Aging of receivables that are not impaired \| \| \| \| \| Not due \| 314.9 \| 193.3 \| 123.8 \| \| Until 30 days \| 75.0 \| 53.1 \| 40.8 \| \| Between 30 and 90 days \| 34.7 \| 10.4 \| 11.6 \| \| More than 90 days \| 20.8 \| 1.4 \| 4.1 \| \| Total trade receivables \| 445.4 \| 258.2 \| 180.3 \| At 31 December 2017, the Group has recognised bad debt provisions of DKK 0m (2016: DKK 0m, 2015: DKK 0m), and no bad debt losses have been incurred during the year. ## Accounting principles Receivables include receivables from sales and other receivables. Receivables are measured at fair value on initial recognition and subsequently at amortised cost, usually equaling nominal value less any write-downs for bad debts. # 17. Contact work in progress \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Selling price of work performed \| 409.3 \| 315.2 \| 224.2 \| \| Prepayments received from customers \| (306.4) \| (232.2) \| (170.5) \| \| Total contract work in progress \| 102.9 \| 83.0 \| 53.7 \| Net value – stated on a contract-per-contract basis – is presented in the balance sheet as follows: \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Contract work in progress \| 139.2 \| 110.5 \| 80.9 \| \| Prepayments received from customers \| (36.2) \| (27.5) \| (27.2) \| \| Total contract work in progress \| 102.9 \| 83.0 \| 53.7 \| ## Accounting principles Contract work in progress is measured at the selling price of the work carried out less prepayments received at the balance sheet date. The selling price is measured based on the stage of completion and the total estimated income from the individual contracts in progress. Usually, the stage of completion is determined as the ratio of actual to total budgeted consumption of resources. For some projects where the consumption of resources cannot be applied as a basis, the ratio between completed and total sub-activities of the individual projects has been applied. If the selling price of a project cannot be made up reliably, it is measured at the lower of costs incurred and net realisable value. If prepayments received exceed the selling price on a contract by contract basis, the excess amount is recognised as a liability in “Prepayments received from customers”. --- F-43 # 18. Cash and cash equivalents \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Deposits at bank \| 194.5 \| 60.0 \| 111.5 \| \| Bank overdraft \| 0.0 \| (28.0) \| 0.0 \| \| Total cash and cash equivalents \| 194.5 \| 32.0 \| 111.5 \| # Accounting principles The carrying amounts for cash and cash equivalents assumed to equal the fair value. The Group's cash and cash equivalents consist of deposits in well-reputed banks. Therefore, cash and cash equivalents are not subject to credit risk. # 19. Share capital The share capital equals DKK 71,607,330 divided into shares of DKK 1 each or multiples hereof. The shares have been divided into the following classes: \| \| No. of shares \| Votes \| \| --- \| --- \| --- \| \| A shares \| 250,000 \| — \| \| A2-shares \| 50,001 \| — \| \| B-shares \| 19,525,772 \| 35,620,736 \| \| C-shares \| 10,156,043 \| — \| \| C1-shares \| 130,724 \| — \| \| D Shares \| 7,314,288 \| 6,671,703 \| \| E Shares \| 7,314,288 \| 6,671,703 \| \| F Shares \| 7,314,288 \| 3,335,852 \| \| G Shares \| 6,769,456 \| 6,174,737 \| \| H Shares \| 11,047,803 \| 10,077,217 \| \| I Shares \| 380,842 \| — \| \| J-Shares \| 1,353,825 \| 13,534 \| \| Sum \| 71,607,330 \| 68,565,482 \| \| \| 2017 \| 2016* \| \| Profit for the year (DKK million) \| 141.6 \| 16.7 \| \| Weighted average number of shares (‘000) \| 69,780 \| 67,155 \| \| Basic earnings per share (DKK)* \| 2.03 \| 0.25 \| \| Diluted earnings per share (DKK)* \| 2.03 \| 0.25 \| * Basic and diluted earnings per share have been presented only for the periods where NC TopCo A/S has been the majority shareholder of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) starting from 1 February 2016. Hence the calculation for 2016 only includes the period 1 February – 31 December. The share capital structure of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) was substantially different from the share capital structure of NC TopCo A/S and basic and diluted earnings per share for the periods prior to 1 February 2016 are not comparable to the basic and diluted earnings per share for the periods starting from 1 February 2016. Earnings per share are calculated in accordance with IAS 33. Earnings per share are calculated by dividing profit by the weighted average number of shares. No share options or loans with conversion rights or other financial instruments have been issued that would have a potential dilutive impact on earnings per share, which is why basic and diluted earnings per share are identical for the periods disclosed. --- F-44 # 20. Borrowings Borrowings has been presented as follows in the balance sheet: \| \| \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| --- \| --- \| \| \| \| \| 2017 \| 2016 \| 2015 \| \| \| \| \| DKK million \| \| \| \| Non-current liability \| \| \| 1,264.9 \| 1,178.0 \| 0.0 \| \| Current liability \| \| \| 0.0 \| 28.0 \| 0.0 \| \| Total borrowings \| \| \| 1,264.9 \| 1,206.0 \| 0.0 \| \| \| Currency \| Maturity \| Fixed or floating interest \| Loan costs \| Nominal value \| \| \| \| \| \| DKK million \| \| \| Bank loan \| EUR \| 2023 \| Floating \| 27.6 \| 1,105.1 \| \| Bank loan \| NOK \| 2023 \| Floating \| 5.2 \| 105.2 \| \| Bank loan \| DKK \| 2023 \| Floating \| 4.6 \| 92.0 \| \| Total borrowings \| \| \| \| 37.4 \| 1,302.3 \| \| \| \| \| 2017 \| \| \| \| \| \| Borrowings \| Leasing \| Interest rate and currency swaps fair value \| Total \| \| \| \| \| DKK million \| \| \| \| Opening balance 1 January 2017 \| \| 1,178.0 \| 25.4 \| 28.0 \| 1,231.4 \| \| Financing obtained \| \| 92.0 \| 0.0 \| 0.0 \| 92.0 \| \| Repayment \| \| 0.0 \| (16.6) \| 0.0 \| (16.6) \| \| Fair value adjustments (non-cash) \| \| 0.0 \| 0.0 \| 0.0 \| 0.0 \| \| Leasing (non-cash) \| \| 0.0 \| 21.4 \| 0.0 \| 21.4 \| \| Amortisation loan costs (non-cash) \| \| 6.6 \| 0.0 \| 0.0 \| 6.6 \| \| Acquired entities (non-cash) \| \| 0.0 \| 1.0 \| 0.0 \| 1.0 \| \| Exchange rate adjustments (non-cash) \| \| (11.7) \| 0.0 \| 0.0 \| (11.7) \| \| Closing balance 31 December 2017 \| \| 1,264.9 \| 31.2 \| 28.0 \| 1,324.1 \| The fair value of bank loans is deemed to approximate the nominal value of the loans. The carrying value of the loans is based on the amortised cost method and upon initial recognition recognised at the loan proceeds received less cost to obtain the loans. The loan costs are amortised over the life of the loans based on the effective interest rate method. The repayment profile for the bank debt is conditional on the Group complying with certain financial ratios (covenants). In 2017, the Group complied with the covenants defined. According to the loan agreement, all distribution of dividends has to be approved by the lender. ## Accounting principles Financial liabilities are measured at amortised cost. # 21. Other payables \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Interest and currency rate swaps stated at fair value \| 28.0 \| 28.0 \| 0.0 \| \| Wages and salaries, payroll taxes, social, security costs, etc. payable \| 39.3 \| 31.2 \| 11.2 \| \| Holiday pay obligation \| 70.6 \| 55.8 \| 45.4 \| \| VAT and duties \| 57.6 \| 28.5 \| 17.9 \| \| Other costs payable \| 27.6 \| 19.9 \| 5.5 \| \| Total other payables \| 223.1 \| 163.3 \| 80.0 \| --- # Accounting principles The carrying amount of the above-mentioned other payables is assumed to equal their fair value. Holiday pay obligation represents the Group's obligations for payment of wages and salaries during holiday periods, corresponding to the employees' right vested at the balance sheet date to be used in subsequent financial years. The liability is presented under current liabilities. ## 22. Provisions \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Onerous contracts and warranty obligations at 1 January \| 8.9 \| 5.0 \| 5.9 \| \| Additions, acquisition of subsidiaries \| 0.0 \| 0.0 \| 0.0 \| \| Used in the year \| (6.4) \| (3.0) \| (0.9) \| \| Provisions for the year \| 27.9 \| 6.9 \| 0.0 \| \| Onerous contracts and warranty obligations at 31 December \| 30.4 \| 8.9 \| 5.0 \| ## Accounting principles Provisions represent commitments for onerous contracts and warranty obligations. An onerous contract is considered to exist when the Group has a contract under which the unavoidable costs of meeting the obligation under the contract exceed the economic benefits to be received from the contract. Hence the recognised provision represents the Group's best estimate of the unavoidable loss to complete its contract obligations for the related contracts. Provisions for warranty obligations are based on past history and provisions for specific customer cases. ## 23. Working capital changes \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Change in receivables \| (170.4) \| (165.1) \| (59.4) \| \| Change in trade payables etc. \| 75.3 \| 145.5 \| 68.6 \| \| Working capital changes \| (95.0) \| (19.6) \| 9.1 \| ## 24. Financial Risks And Financial Instruments \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Categories of financial instruments \| \| \| \| \| Trade receivables \| 445.4 \| 258.2 \| 180.3 \| \| Contract work in progress \| 139.2 \| 110.5 \| 80.9 \| \| Receivables from group enterprises \| 0.0 \| 0.0 \| 97.7 \| \| Other receivables \| 11.0 \| 6.8 \| 1.0 \| \| Cash \| 194.5 \| 60.0 \| 111.5 \| \| Loans and receivables measured at amortised cost \| 790.1 \| 435.5 \| 471.4 \| \| Trade payables \| 50.6 \| 26.8 \| 18.6 \| \| Payables to group enterprises \| 0.0 \| 0.0 \| 52.1 \| \| Other payables \| 223.1 \| 163.3 \| 80.0 \| \| Financial liabilities measured at amortised cost \| 273.7 \| 190.1 \| 150.7 \| \| Fair value, Interest swap \| (38.5) \| (51.0) \| 0.0 \| \| Fair value, Currency swap \| 10.5 \| 23.1 \| 0.0 \| \| Financial assets and liabilities measured at fair value \| (28.0) \| (28.0) \| 0.0 \| F-45 --- - Policy for management of financial risks The Group’s objective at all times is to limit the Group’s financial risks. The Group manages the financial risks and coordinates cash management and management of interest rate and currency risks based on financial risk policies agreed with the board of directors and its majority shareholder. - Liquidity risks The Group attempts to maximise flexibility and minimise risks. At 31 December 2017, the Group has unutilised credit facilities of a total of DKK 212.5m (2016: DKK 84.8m, 2015: DKK 40.0m). - Credit risks In 2017, the Group has not had any bad debt losses. At 31 December 2017, the credit risk is assessed to be limited and at 31 December 2017, the Group has made a provision of DKK 0.0m (2016: DKK 0.0m, 2015: DKK 0.0m) for potential bad debts. - Currency risks The Group is to a limited extent exposed to foreign currency risks. The main part of the Group’s transactions is in Danish kroner. Late 2017, the Group acquired a subsidiary in the United Kingdom. With respect to subsidiaries situated in Poland, Norway and Vietnam there are transactions with these subsidiaries, however, their extent and risk are not significant. The Group may repatriate dividends from the foreign subsidiaries, which then may be subject to currency risk. Furthermore the Group has entered into loan agreements in different currencies, see note 20. To hedge currency risk, the Group has entered into a currency swap covering the loan in EUR. The fair value of the currency swap outstanding at the balance sheet date is positive by DKK 10.5m (2016: DKK 23.1m, 2015: N/A). - Interest rate risks The interest-bearing liabilities in the Group relate to the loans obtained to finance the purchases of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S), Mesan AS (subsequently renamed to Netcompany AS) and Hunter Macdonald Ltd (subsequently renamed to Netcompany UK Ltd), which bears interest according to OTC Rate Floor Transaction agreement made. In 2017 the floating rate averaged 4.3% (2016: 5.0%, 2015: N/A), excluding the impact from amortisation of loan costs. Approximately 80% of the bank loans have been converted to fixed interest rate of 4.0% p.a. through the use of interest rate swaps. The fair value of the interest rate swaps outstanding at the balance sheet date is negative by DKK 38.5m (2016: DKK 51.0m, 2015: N/A). The Group is to a limited extent also exposed to interest rate risks relating to the cash balances, which currently bear negative interest due to the current low interest environment. - Optimisation of the capital structure The Group regularly assesses whether its capital structure is in accordance with the Group’s and the owners’ interests. The overall objective is to ensure a capital structure that supports long-term growth whilst maximising returns for the Group’s owners by optimising the equity-to-debt ratio. F-46 --- 25. Acquisition of subsidiaries 2017 On 25 October 2017, the Group acquired the entire share capital of Hunter Macdonald Ltd (subsequently renamed to Netcompany UK Ltd) and its subsidiary at a price of DKK 345.9m of which DKK 120.3m was paid in cash and DKK 225.6m was settled by the issue of share capital in NC Topco A/S. 2016 On 1 February 2016, the Group acquired the entire share capital of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries at a price of DKK 2,320.4m in cash. On 22 November 2016, the Group acquired the entire share capital of Mesan AS (subsequently renamed to Netcompany AS), Norway at a price of DKK 195.6m in cash. Assets acquired and liabilities recognised at the dates of acquisition can be summarised as follows: \| \| 2017 Hunter Macdonald Ltd \| 2016 Netcompany A/S* (Denmark) DKK million \| 2016 Netcompany AS (Norway) \| \| --- \| --- \| --- \| --- \| \| Non-current assets \| \| \| \| \| Technology \| 0.0 \| 52.9 \| 0.0 \| \| Software \| 0.0 \| 4.5 \| 0.0 \| \| Trademarks \| 0.0 \| 167.8 \| 0.0 \| \| Order back-log \| 31.5 \| 57.5 \| 7.0 \| \| Customer relationships \| 75.9 \| 205.5 \| 63.0 \| \| Property, plant and equipment \| 0.6 \| 8.4 \| 0.5 \| \| Right of use assets \| 1.0 \| 18.0 \| 8.6 \| \| Deferred tax assets \| 0.0 \| 0.9 \| 0.1 \| \| Other receivables \| 14.0 \| 4.0 \| 0.0 \| \| Current assets \| \| \| \| \| Trade receivables \| 37.7 \| 172.5 \| 17.5 \| \| Contract work in progress \| 3.3 \| 78.7 \| 0.0 \| \| Other receivables \| 0.0 \| 10.3 \| 9.2 \| \| Cash \| 26.3 \| 44.4 \| 27.4 \| \| Current liabilities \| \| \| \| \| Leasing \| (0.9) \| (18.0) \| (8.6) \| \| Deferred tax on remeasurement of certain identifiable assets \| (20.4) \| (106.4) \| (17.5) \| \| Prepayments received from customers \| (1.9) \| (25.2) \| 0.0 \| \| Trade payables \| (29.9) \| (12.2) \| (1.5) \| \| Tax payable \| (0.7) \| (20.8) \| (4.0) \| \| Other payables \| (5.2) \| (87.4) \| (24.7) \| \| Net assets taken over \| 131.2 \| 555.2 \| 77.0 \| \| Goodwill \| 214.7 \| 1,765.2 \| 118.7 \| \| Total consideration \| 345.9 \| 2,320.4 \| 195.6 \| \| Less cash acquired \| (26.3) \| (44.4) \| (27.4) \| \| Total net consideration \| 319.6 \| 2,276.0 \| 168.3 \| * subsequently renamed to Netcompany Holding I A/S For description of the assets and liabilities identified in the acquisitions in 2017 and 2016 see note 2. The Group has incurred acquisition costs totalling DKK 13.8m (2016: DKK 35.1m, 2015: DKK 0.0m), which are included in special items. Impact on revenue and profit/loss from acquired business in 2017: \| \| Revenue \| Profit \| \| --- \| --- \| --- \| \| \| DKK million \| \| \| Hunter Macdonald Ltd \| 61.9 \| 12.4 \| \| Total \| 61.9 \| 12.4 \| F-47 --- Pro-forma figures if Hunter Macdonald Ltd. had been a subsidiary in whole 2017: \| \| Revenue \| Profit \| \| --- \| --- \| --- \| \| \| DKK million \| \| \| Hunter Macdonald Ltd \| 286.3 \| 21.0 \| \| Total \| 286.3 \| 21.0 \| ## Impact on revenue and profit/loss from acquired business in 2016: (excluding Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) which is included the combined financial statements for the whole year 2016) \| \| Revenue \| Profit \| \| --- \| --- \| --- \| \| \| DKK million \| \| \| Netcompany AS \| 11.7 \| (2.6) \| \| Total \| 11.7 \| (2.6) \| Pro-forma figures if Netcompany AS had been subsidiary in whole 2016: \| \| Revenue \| Profit \| \| --- \| --- \| --- \| \| \| DKK million \| \| \| Netcompany AS \| 106.6 \| 20.9 \| \| Total \| 106.6 \| 20.9 \| ## Accounting principles Acquired or newly established subsidiaries are recognised in the consolidated financial statements from the time of acquiring or establishing such subsidiaries. Time of acquisition is the date on which control over the subsidiary is actually acquired. Divested or wound-up subsidiaries are recognised in the consolidated income statement up to the time of their divestment or winding-up. Time of divestment is the date on which control of the subsidiary actually passes to a third party. When acquiring new subsidiaries, over which the Group obtains control, the acquisition method is applied under which identifiable assets, liabilities and contingent liabilities of these subsidiaries are measured at fair value at the acquisition date. Allowance is made for the tax effect of the restatements made. The purchase consideration for a subsidiary consists of the fair value of the consideration paid for the acquired subsidiary. Costs which are directly attributable to the acquisition of the subsidiary are recognised directly in income when incurred. Positive differences (goodwill) between, the purchase consideration for the subsidiary acquired and, the fair value of the net assets acquired are recognised as an intangible asset and tested for impairment at least once a year. ## 26. Fee for the group's auditor appointed by the shareholders \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Statutory audit \| 1.2 \| 0.4 \| 0.4 \| \| Other assurance agreements \| 0.6 \| 0.2 \| 0.0 \| \| Tax and VAT advisory services \| 1.0 \| 0.1 \| 0.1 \| \| Other services \| 4.7 \| 8.4 \| 0.5 \| \| Total audit fee \| 7.5 \| 9.1 \| 1.0 \| Other services includes pre-IPO services and services relating to mergers and acquisitions and various consultancy services. F-48 --- F-49 # 27. Related parties - Related parties with a controlling interest FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP (jointly referred to as the “Significant Shareholders”). - Related parties with significant influence Related parties with significant influence also comprises the Company’s Executive Management, Board of Directors and their related parties. Furthermore, related parties are companies in which the above persons have significant interests. - Transactions with related parties The Group has had the following transactions with other companies controlled by the Significant Shareholders: \| \| 31 December \| \| \| \| --- \| --- \| --- \| --- \| \| \| 2017 \| 2016 \| 2015 \| \| \| DKK million \| \| \| \| Revenue \| 2.8 \| 0.7 \| 0.0 \| Remuneration and fees to the Executive Management and fees to the Board of Directors are disclosed in note 8. - Companies in the Group The Group’s subsidiaries at 31 December 2017 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Group. The country of incorporation or registration is also their principal place of business. \| \| Location \| Currency \| Ownership \| Function \| \| --- \| --- \| --- \| --- \| --- \| \| NC TopCo A/S \| Denmark \| DKK \| \| Parent \| \| NC NewCo A/S \| Denmark \| DKK \| 100% \| Subsidiary \| \| Netcompany Holding I A/S (formerly Netcompany A/S) \| Denmark \| DKK \| 100% \| Subsidiary \| \| Netcompany A/S (formerly Netcompany IT and Business Consulting A/S) \| Denmark \| DKK \| 100% \| Subsidiary \| \| Netcompany Poland sp. Z o.o. (formerly Netcompany Solutions sp. Z o.o.) \| Poland \| PLN \| 100% \| Subsidiary \| \| Netcompany Norway AS (formerly Mesan AS) \| Norway United \| NOK \| 100% \| Subsidiary \| \| Netcompany UK Holding Ltd \| Kingdom United \| GBP \| 100% \| Subsidiary \| \| Netcompany UK Ltd (formerly Hunter Macdonald Ltd) \| Kingdom \| GBP \| 100% \| Subsidiary \| \| Netcompany Vietnam Ltd (formerly Hunter Macdonald Viet Nam Ltd) \| Vietnam \| VND \| 100% \| Subsidiary \| # 28. Collateral provided and contingent liabilities As part of its contract commitments with customers, the Group has through its banks provided performance guarantees of DKK 139.9m (2016: DKK 51.6m, 2015: DKK 0.0m) # 29. Adoption of the combined financial statements At a meeting held on 23 May 2018, the Board of Directors adopted the combined financial statements to be included in the Offering Circular. # 30. Events after the balance sheet date No events have occurred after the balance sheet date to this date, which would influence the evaluation of the combined financial statements. --- [THIS PAGE INTENTIONALLY LEFT BLANK] --- ANNEX A—ARTICLES OF ASSOCIATION OF THE COMPANY Articles of Association Netcompany Group A/S Registration (CVR) no. 39 48 89 14 1 NAME 1.1 The Company’s name is Netcompany Group A/S. 2 OBJECTS 2.1 The objects of the Company are to invest in and own shareholdings in other companies and to carry on IT-business and thereto related business. 3 CORPORATE LANGUAGE 3.1 The corporate language of the Company is English. 3.2 Company announcements shall be prepared in English. 4 SHARE CAPITAL AND SHARES 4.1 The share capital of the Company is DKK 500,000, divided into shares of DKK 1 each or multiples thereof. 4.2 The share capital has been paid up in full. 4.3 The shares are registered with and issued in dematerialised form through VP SECURITIES A/S, CVR no. 21 59 93 36. Rights concerning the shares shall be notified to VP SECURITIES A/S in accordance with applicable rules. 4.4 The shares are negotiable instruments. No restrictions shall apply as to the transferability of the shares. 4.5 No shares carry any special rights. 4.6 No shareholder shall be obliged to have the shares redeemed fully or partly. 4.7 The shares shall be issued in the holder’s name and shall be registered in the name of the holder in the Company’s Register of Shareholders. 4.8 The Register of Shareholders is handled by Computershare A/S, CVR no. 27 08 88 99, on behalf of the Company. 5 INCREASE OF SHARE CAPITAL 5.1 In the period until 21 May 2023, the Board of Directors is authorised to increase the Company’s share capital in one or more issues without pre-emption rights for the Company’s existing shareholders by up to a nominal amount of DKK 10,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 20% of the outstanding share capital at the time of exercise of the authorisation. The capital increase shall take place at market price and shall be effected by cash payment, by contribution in kind or by debt conversion. 5.2 In the period until 21 May 2023, the Board of Directors is authorised to increase the Company’s share capital in one or more issues with pre-emption rights for the Company’s existing shareholders by up to a nominal amount of DKK 5,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 10% of the outstanding share capital at the time of exercise of the authorisation. The capital increase may take place at a subscription price set by the Board of Directors and shall be effected by cash payment, including a potential favourable price. 5.3 The capital increases which the Board of Directors is authorised to execute pursuant to articles 5.1 and 5.2 cannot exceed a total aggregate nominal amount of DKK 10,000,000. 5.4 The new shares issued pursuant to articles 5.1 and 5.2 shall have the same rights as the existing shares of the Company. The new shares shall be negotiable instruments and issued in the holder’s name and shall be A-1 --- registered in the Company's Register of Shareholders. The shares shall be fully paid up. No shareholder shall be obliged to have the shares redeemed fully or partly. The new shares shall give rights to dividends and other rights in the Company from the time which is determined by the Board of Directors in connection with the decision to increase the share capital. 5.5 The Board of Directors is authorized to stipulate detailed terms and conditions governing capital increases under the authority given above. The Board of Directors is also authorized to amend these Articles of Association as required in connection with its use of such authority. ## 6 DIVIDEND 6.1 Dividend shall be paid out to shareholders by transfer through VP SECURITIES A/S and is deposited at the registered dividend accounts at VP SECURITIES A/S. 6.2 Dividend that has not been claimed within three years of the due date shall accrue to the Company. ## 7 GENERAL MEETINGS 7.1 General meetings of the Company shall be held in Greater Copenhagen. 7.2 Annual general meetings shall annually be held early enough for the audited and adopted annual report to be submitted to and received by the Danish Business Authority not later than four months after the closing of the financial year. 7.3 Not later than eight weeks before the date set for the annual general meeting the Board of Directors shall announce the date on which it intends to hold the general meeting as well as the deadline for the shareholders to submit requests for specific proposals to be included on the agenda, cf. article 7.5. 7.4 Every shareholder shall be entitled to have a specific subject considered at the annual general meeting. 7.5 Proposals from shareholders for consideration by the annual general meeting shall be submitted to the Board of Directors in writing not later than six weeks before the date of the general meeting. In the event that the Board of Directors receives a proposal later than six weeks before the general meeting, the Board of Directors shall decide whether it was received in time for it to be included on the agenda nonetheless. 7.6 Extraordinary general meetings must be held at the request of the Board of Directors or one of the auditors appointed by the general meeting. Extraordinary general meetings must also be held when requested by shareholders holding at least 5% of the share capital. Such request must be submitted in writing to the Board of Directors and must contain a specific subject or proposal for an agenda item. The Board of Directors shall convene the extraordinary general meeting within two weeks of the Company's receipt of the shareholders request. 7.7 All documents prepared for use by or for a general meeting of the Company in connection with or after the general meeting, including the notice and the minutes, will be prepared in English and to the extent required by law, in Danish. 7.8 General meetings shall be convened with a maximum notice of five weeks and a minimum notice of three weeks. 7.9 The Board of Directors convenes general meetings by posting on the Company's website (www.netcompany.com). General meetings shall moreover be convened by sending a notice to all shareholders entered in the Company's Register of Shareholders having so requested, to the address, including the e-mail address, cf. article 9, informed to the Company. If the information contained in the Register of Shareholders is insufficient or incorrect, the Board of Directors shall not be obliged to rectify the information or to give notice in any other way. 7.10 The notice shall as a minimum include: (1) Time and place for the general meeting and the issues to be considered at the general meeting. If the general meeting is to consider a proposal to amend the Articles of Association, then the notice shall specify the material content of the proposal. (2) The amount of the share capital and the voting rights of the shareholders. (3) The registration date stated in article 8.2 with a clear indication that only companies or persons holding shares in the Company as at said date shall be entitled to attend and vote at the general meeting. A-2 --- (4) An indication of where and how to obtain the full, unbridged text of the documents to be presented at the general meeting, the agenda and the complete proposals, including the exact internet address of the Company's website where the agenda and the other documents mentioned in article 7.12 will be made available. (5) The procedure for voting by proxy, by postal and by electronic means, and the Company will make a proxy form available for the shareholders that are entitled to vote. (6) If the general meeting is conducted partly by electronic means, this shall be stated in the convening notice together with the details on how to sign up and what the requirements are to the electronic systems that will be used. The convening notice shall point out that detailed information about the procedure will be available on the Company's website. 7.11 The general meeting is held in English. The Board of Directors may decide to offer simultaneous interpretation into Danish. 7.12 Not later than three weeks prior to a general meeting the following information, as minimum, shall be available on the Company's website: (1) The notice. (2) The total number of shares and voting rights on the date of the notice. (3) The documents to be submitted to the general meeting, including with respect to the annual general meeting the audited annual report. (4) The agenda and complete proposals. (5) The forms to be used for voting by proxy or postal. 7.13 The agenda of the annual general meeting shall include: (1) A report from the Board of Directors on the Company's activities in the past financial year. (2) Presentation and approval of the audited annual report. (3) A resolution on the distribution of profit or the cover of loss in accordance with the annual report adopted. (4) Approval of the remuneration for the Board of Directors for the current financial year. (5) Election of members to the Board of Directors. (6) Election of auditor. (7) Any proposal submitted by the Board of Directors regarding authorisation to acquire treasury shares. (8) Any proposals submitted by the Board of Directors or by shareholders. (9) Any other business. 7.14 A chairman of the meeting appointed by the Board of Directors shall preside over the proceedings at general meetings and decide upon all questions of procedure, voting and voting results. 7.15 The proceedings at a general meeting shall be recorded in a minute book and be signed by the chairman of the general meeting and the Chairman of the Board of Directors. Not later than two weeks after the general meeting the minute book, or a certified transcript of the minute book, shall be made available to the Company's shareholders. 7.16 As a general rule, cf. article 7.17, for each resolution made at the general meeting the minute book of the general meeting must set out at a minimum the full details of the voting including information on (i) the total number of shares for which valid votes were cast, (ii) the proportion of the share capital accounted for by these votes, (iii) the total number of valid votes, (iv) the number of votes cast in favour of and against each resolution, and (v) the total number of abstentions, if any. 7.17 If no shareholder requests that the full details of the votes be included in the minute book, the minute book need only to state the results of the individual votes. 7.18 Not later than two weeks after the general meeting the voting results from the general meeting shall be posted on the Company's website. A-3 --- 8 RIGHT OF ATTENDANCE—VOTING RIGHT 8.1 A shareholders right to attend general meetings and to vote at general meetings or vote by post is determined on the basis of the shares that the shareholder owns on the registration date. 8.2 The registration date is one week before the general meeting is held. The shares which the individual shareholder owns are calculated on the registration date on the basis of the registration of ownership in the Company’s Register of Shareholders as well as notifications concerning ownership which the Company has received with a view to update the ownership in the Register of Shareholders. 8.3 A shareholder who is entitled to attend the general meeting pursuant to article 8.1 and who wants to attend the general meeting shall request to receive an admission card not later than three days prior to the date of the general meeting. 8.4 Each share of DKK 1 has one vote at general meetings. 8.5 A shareholder may vote by written and dated proxy or by post. A vote by post must be received by the Company not later than the day before the general meeting. 8.6 A shareholder may attend in person or by proxy, and the shareholder or the proxy may attend together with an adviser. 8.7 At general meetings resolutions shall be decided by simple majority of votes unless otherwise prescribed by law or the Articles of Association. 9 ELECTRONIC COMMUNICATION 9.1 All communication from the Company to the individual shareholders may take place electronically by posting on the Company’s website or by email. General notices shall be published on the Company’s website and in such other manner as may be prescribed by applicable laws. The Company may as an alternative choose to send notices, etc., by ordinary post. 9.2 The Company’s website, www.netcompany.com, shall also contain information about requirements to the systems used and the procedures applying to the use of electronic communication. 9.3 The Company must request registered shareholders for an electronic address to which notices can be sent, and it is the responsibility of each shareholder to ensure that the Company is in possession of a proper electronic address. The Company is not obliged to verify such contact information or to send notices in any other way. 9.4 Communication from a shareholder to the Company may take place by email or by ordinary mail. 10 BOARD OF DIRECTORS 10.1 The general meeting shall elect at least three and not more than seven directors. 10.2 The directors elected by the general meeting shall retire from office at each annual general meeting but shall be eligible for re-election. 10.3 The Board of Directors elects the Chairman and the Deputy Chairman of the Board of Directors. If the Chairman resigns during a term of election, the Deputy Chairman shall take up the position as Chairman until a new Chairman is elected among the members of the Board of Directors. 10.4 Any employee representatives on the Board of Directors and their alternates, if any, are elected in accordance with applicable law thereon in force from time to time. 10.5 The Board of Directors forms a quorum when more than half of its members are represented, including the Chairman or the Deputy Chairman. 10.6 Resolutions by the Board of Directors are passed by a simple majority of votes. In case of an equality of votes, the Chairman, or in her/his absence the Deputy Chairman shall have a casting vote. 10.7 The Board of Directors shall lay down its rules of procedure. 10.8 The Board of Directors is authorised to pass one or more resolutions to distribute interim dividends. The authorisation of the Board of Directors is not limited (by an amount or otherwise) except as set out in the Danish Companies Act. 10.9 The Board of Directors may authorize one person alone or more persons jointly to sign for the Company by procuration. A-4 --- A-5 # 11 EXECUTIVE MANAGEMENT 11.1 The Board of Directors shall employ at least one but not more than four managers to comprise the Company's Executive Management. Where more than one manager is employed, one of them shall be appointed managing director. # 12 INCENTIVE PAY 12.1 The Company has adopted a Remuneration Policy, which includes overall guidelines for incentive pay for the Board of Directors and Executive Management. The Remuneration Policy, which has been approved by the general meeting, is publicly available on the Company's website. # 13 SIGNATURE RULES 13.1 The Company shall be bound (i) by the joint signatures of the Chairman of the Board of Directors and a member of the Executive Management, (ii) by the joint signatures of the Deputy Chairman of the Board of Directors and a member of the Executive Management, (iii) by the joint signatures of the Chairman of the Board of Directors and a member of the Board of Directors, (iv) by the joint signatures of the Deputy Chairman of the Board of Directors and a member of the Board of Directors, (v) by the joint signatures of two members of the Executive Management, or by (vi) the joint signatures of all the members of the Board of Directors. # 14 AUDITOR 14.1 The Company's annual report shall be audited by a state-authorised public accountant. 14.2 The auditor shall be elected by the annual general meeting for one year at a time. Re-election may take place to the extent permitted under applicable law. # 15 ANNUAL REPORT AND FINANCIAL YEAR 15.1 The Company's annual report and interim reports shall be prepared and submitted in English. The Board of Directors may resolve to supplement the annual report and interim reports of the Company with a Danish translation or a summary in Danish. 15.2 The financial year of the Company is the calendar year. Approved at the Company's extraordinary general meeting held on 22 May 2018. --- [THIS PAGE INTENTIONALLY LEFT BLANK] --- ANNEX B—APPLICATION FORM Application form (only one form per custody account) \| Offering of 20,000,000 Offer Shares (excluding the Option Shares) of DKK 1 nominal value each ---\|--- Application for purchase of Offer Shares in Netcompany Group A/S, registration (CVR) no. 39 48 89 14 \| Selling agents: \| Danske Bank A/S (CVR nr. 61 12 62 28) Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark \| \| --- \| --- \| \| Joint Global Coordinators and Joint Bookrunners: \| Danske Bank A/S, Deutsche Bank AG, London branch and Morgan Stanley & Co. International plc. \| \| Joint Bookrunner: \| Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige \| \| Offer Period: \| 23 May to 6 June 2018 at 11:00 a.m. (CET) unless the Offering is closed earlier in whole or in part. The Offer Period for order applications up to and including DKK 3 million may be closed before the remainder of the Offering. The Offering will not be closed before 1 June at 00:01 a.m. (CET). \| \| Offer Price Range: \| DKK 135 to DKK 165 per Offer Share \| \| ISIN: \| Permanent ISIN for the Shares: DK0060952919 \| The English Language Prospectus dated 23 May 2018 includes, inter alia, the Articles of Association of Netcompany Group A/S, the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015, the unaudited condensed consolidated interim financial statements of the Group as of and for the three months ended 31 March 2018 and 2017, as well as the terms and conditions for the purchase of Offer Shares. Both binding order applications and expressions of interest can be submitted with specification of a maximum price. If the Offer Price is determined at a higher level than the stated maximum price, no Offer Shares will be allocated to the purchaser. For binding orders up to and including DKK 3 million, the application form is submitted to the purchaser's own account holding institution duly filled in and signed. The application form shall be submitted within an appropriate amount of time for the account holding institution to process and forward the application so that the application reaches Danske Bank A/S no later than 6 June 2018 at 11:00 a.m. (CET) or such earlier time as the Offering may be closed in whole or in part. Expressions of interest to purchase Offer Shares for more than DKK 3 million can be submitted to one of the Managers, e.g., by using this application form. On the terms and conditions stated in the English Language Prospectus dated 23 May 2018, including in "Risk Factors" and "Selling Restrictions", I/we hereby submit an order application for the purchase of Offer Shares in Netcompany Group A/S and simultaneously declare to have received a copy of the English Language Prospectus; and that I/we have solely based my/our investment decision on the contents of the English Language Prospectus. The Offer Price will be fixed upon closing of the Offering through a book-building process. See "The Offering—Offer Price". Only one application form per custody account with VP SECURITIES A/S (VP) will be accepted. Application submitted as a binding application (for orders up to and including DKK 3 million) I/we accept that the Managers may demand information about my/our name(s), address(es) and application and are entitled to pass on such information to the Selling Shareholders, Netcompany Group A/S and the Managers. I/ we undertake to pay the equivalent of the Offer Shares allocated at the Offer Price fixed. B-1 --- Field (1) or (2) should be completed \| (1) For Danish kroner (DKK) \| (2) Number of Offer Shares \| (3) Maximum price per Offer Share, if any (dividable by 0.5) \| \| --- \| --- \| --- \| \| \| \| \| Expression of interest submitted pursuant to the book-building process (for orders above DKK 3 million) I/we accept that the application form and information about my/our name(s) and address(es) are entitled to be passed on to the Selling Shareholders, Netcompany Group A/S and the Managers. I/we accept that I/we during the Offer Period can amend or revoke this expression of interest but that this expression of interest will automatically be converted into a binding purchase order upon expiry of the Offer Period. Field (1) or (2) should be completed \| (1) For Danish kroner (DKK) \| (2) Number of Offer Shares \| (3) Maximum price per Offer Share if any (dividable by 0.5) \| \| --- \| --- \| --- \| \| \| \| \| If the aggregate applications to purchase and expressions of interest exceeds the total number of Offer Shares, a reduction will be completed as further described in the English Language Prospectus. See "The Offering—Allocation and Reduction". Neither submission of application orders nor submission of expressions of interest entitles one to any Offer Shares. Settlement of the Offering will be effected by way of registration of the allocated number of Offer Shares on your custody account with VP SECURITIES A/S (VP) against payment in DKK, which is expected to take place on or before 11 June 2018. Information and signature \| Name: \| VP custody account no.: \| \| --- \| --- \| \| Address: \| Settlement account no.: \| \| Postal code and city: \| Custodian bank: \| \| Telephone: \| \| \| Date: \| \| \| \| This application form was submitted to (to be completed by account holding institution): Reg. no.: Participant ID no. (CD-ident.): Date: Tel.: \| Signature Company stamp and signature Please complete the form overleaf when opening a new VP custody account. \| Opening of new VP custody account (This box should be filled in when opening a new VP custody account and any related settlement account) \| \| --- \| \| Civil registration (CPR) no./company registration (CVR) no.: \| \| Name: \| \| Address: \| \| Postal code and city: \| \| Tel.: \| \| Position: \| \| Existing account no. for settlement, if any: \| --- B-3 \| Ordreblanket (kun én blanket pr. depot) \| Udbud af 20.000.000 Udbudte Aktier (eksklusive Overallokeringsaktierne) à nom. DKK 1 \| \| --- \| --- \| Ordre om køb af Udbudte Aktier i Netcompany Group A/S, CVR-nr. 39 48 89 14 \| Salgssteder: \| Danske Bank A/S (CVR nr. 61 12 62 28) Holmens Kanal 2-12 1092 København K \| \| --- \| --- \| \| Joint Global Coordinators og Joint Bookrunners: \| Danske Bank A/S, Deutsche Bank AG, London branch og Morgan Stanley & Co. International plc. \| \| Joint Bookrunners: \| Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige \| \| Udbudsperiode: \| 23. maj til 6. juni 2018, kl. 11:00 dansk tid, medmindre Udbuddet helt eller delvist lukkes tidligere. Udbudsperioden for ordre op til og med DKK 3 mio. kan lukkes før resten af Udbuddet. Udbuddet vil tidligst blive lukket 1. juni 2018, kl. 00:01 dansk tid. \| \| Udbudskursinterval: \| DKK 135 til DKK 165 pr. Udbudt Aktie \| \| ISIN kode: \| Permanent ISIN kode for Aktierne: DK0060952919 \| Det Engelsksprogede Prospekt dateret den 23. maj 2018 indeholder blandt andet vedtægter for Netcompany Group A/S, det reviderede kombinerede årsregnskab for Koncernen for årene, der sluttede, 31. december 2017, 2016 og 2015, det ureviderede sammendragede konsoliderede delårsregnskab for Koncernen for 3-månedersperioderne, der sluttede, 31. marts 2018 og 2017, samt vilkårene for køb af Udbudte Aktier. Både bindende ordrer og interessetilkendegivelser kan afgives med angivelse af en eventuel maksimumkurs. Fastsættes Udbudskursen højere end den anførte maksimumkurs, vil ordregiver ikke blive tildelt nogen Udbudte Aktier. For bindende ordrer til og med DKK 3 mio. indleveres ordreblanketten til ordregivers eget kontoførende institut i udfyldt og underskrevet stand. Ordreblanketten skal indleveres i så god tid, at det kontoførende institut har mulighed for at behandle og videresende ordren, således at den er Danske Bank A/S i hænde senest den 6. juni 2018, kl. 11:00 dansk tid eller et sådant tidligere tidspunkt, hvor Udbuddet måtte blive lukket helt eller delvist. Interessetilkendegivelser om at købe Udbudte Aktier for mere end DKK 3 mio. skal afgives til en af Emissionsbankerne evt. ved brug af denne ordreblanket. På vilkår som anført i det Engelsksprogede Prospekt dateret den 23. maj 2018, herunder afsnittene "Risk Factors" og "Selling Restrictions", afgiver jeg/vi hermed ordre om køb af Udbudte Aktier i Netcompany Group A/S og bekræfter samtidig at have fået udleveret et eksemplar af det Engelsksprogede Prospekt, og at jeg/vi alene har baseret min/vores investeringsbeslutning på indholdet af det Engelsksprogede Prospekt. Udbudskursen fastsættes efter lukning af Udbuddet via bookbuilding-metoden, jf. afsnittet "The Offering—Offer Price". Der kan kun afgives én ordreblanket pr. depot hos VP SECURITIES A/S (VP). Ordre afgivet som bindende ordre (for ordrebeløb til og med DKK 3 mio.) Jeg/vi accepterer, at Emissionsbankerne kan kræve oplysninger om mit/vort navn, adresse og ordre, og er berettiget til at videregive denne information til de Sælgende Aktionærer, Selskabet og Emissionsbankerne. Jeg/vi forpligter mig/os hermed til at betale modværdien af tildelte Udbudte Aktier til den fastsatte udbudskurs. --- Felt 1) eller 2) skal udfyldes \| (1) For kroner (DKK): \| (2) Antal Udbudte Aktier (stk.) \| (3) Evt. maksimumkurs pr. Udbudt Aktie (deleligt med 0,5): \| \| --- \| --- \| --- \| \| \| \| \| Interessetilkendegivelse afgivet efter bookbuilding-metoden (for ordrebeløb større end DKK 3 mio.) Jeg/vi accepterer, at ordreblanketten samt oplysninger om mit/vores navn og adresse videregives til de Sælgende Aktionærer, Netcompany Group A/S og Emissionsbankerne. Jeg/vi accepterer, at jeg/vi kan ændre eller tilbagekalde interessetilkendegivelsen i løbet af Udbudsperioden, men at interessetilkendegivelsen automatisk bliver til en bindende ordre ved Udbudsperiodens udløb. Felt 1) eller 2) skal udfyldes \| (1) For kroner (DKK): \| (2) Antal Udbudte Aktier (stk.) \| (3) Evt. maksimumkurs pr. Udbudt Aktie (deleligt med 0,5): \| \| --- \| --- \| --- \| \| \| \| \| Overstiger de samlede ordrer og interessetilkendegivelser det samlede antal Udbudte Aktier, vil der ske reduktion som anført i det Engelsksprogede Prospekt, jf. afsnittet "The Offering—Allocation and Reduction". Afgivelse af ordrer eller interessetilkendegivelser berettiger ikke til tildeling af Udbudte Aktier. Afvikling af Udbuddet sker ved registrering af antal tildelte Udbudte Aktier på Deres depot i VP SECURITIES A/S (VP) mod kontant betaling i DKK, hvilket forventes at finde sted senest 11. juni 2018. Oplysninger og underskrift \| Navn: \| VP-depotnr.: \| \| --- \| --- \| \| Addressee: \| Kontonr. til afregning.: \| \| Postnr. og by: \| Kontoførende institut: \| \| Telefon: \| \| \| Dato: \| \| \| \| Ordren er indleveret hos (udfyldes af kontoførende institut): \| \| \| Reg.nr.: CD-ident: \| \| \| Dato: Telefon: \| \| Underskrift \| Firmastempel og underskrift \| Udfyld nedenfor ved oprettelse af et nyt VP-depot. \| Oprettelse af nyt VP-depot (Denne rubrik udfyldes i forbindelse med oprettelse af nyt VP-depot og evt. tilhørende afregningskonto) \| \| --- \| \| CPR/CVR-nr.: \| \| Navn: \| \| Adresse: \| \| Postnr. og by: \| \| Telefon: \| \| Stilling: \| \| Evt. eksisterende kontonr. til afregning: \| --- THE COMPANY Netcompany Group A/S Grønningen 17, 1st floor DK-1270 Copenhagen K Denmark MANAGERS Joint Global Coordinators and Joint Bookrunners Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom Morgan Stanley & Co. International plc 25 Cabot Square Canary Wharf London E14 4QA United Kingdom Joint Bookrunner Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige Bernstorffsgade 50 DK-1577 Copenhagen V Denmark LEGAL ADVISERS To the Company: As to United States Law Davis Polk & Wardwell London LLP 5 Aldermanbury Square London EC2V 7HR United Kingdom As to Danish Law Plesner Advokatpartnerselskab Amerika Plads 37 DK-2100 Copenhagen Ø Denmark To the Managers: As to United States Law Latham & Watkins (London) LLP 99 Bishopsgate London EC2M 3XF United Kingdom As to Danish Law Kromann Reumert Sundkrogsgade 5 DK-2100 Copenhagen Ø Denmark AUDITORS OF THE COMPANY Deloitte Statsautoriseret Revisionspartnerselskab Weidekampsgade 6 DK-2300 Copenhagen S Denmark --- Donnelley Financial Solutions 478494 --- # netcompany

Afsnit E—Udbud

Selskabet til at udstede Aktier eller warrants til tegning af Aktier. Endvidere har de Væsentlige Aktionærer og Danica Pension, Livsforsikringsaktieselskab indgået aftale med Emissionsbankerne om, at de ikke vil offentliggøre en hensigt om at indgå i nogen af de i punkt 1) og 2) omtalte transaktioner. Ovenstående gælder ikke for: 1) afståelse af Aktier til deres respektive nærtstående parter, forudsat at disse personer indgår aftale om at overholde tilsvarende begrænsninger, 2) salg af de Udbudte Aktier i Udbuddet, 3) med hensyn til de Væsentlige Aktionærer, udlån af Aktier i henhold til Aktielånsaftalen, 4) afståelse med henblik på at betale (eventuelle) skatteforpligtelser som følge af IPO-omstruktureringen og/eller Post-IPO-omstruktureringen (hvis relevant), 5) overdragelse af Aktier til direkte eller indirekte aktionærer i den pågældende Sælgende Aktionær i forbindelse med eller som følge af eventuelt udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den pågældende Sælgende Aktionær eller nogen af dennes tilknyttede virksomheder, forudsat at den pågældende overtagende aktionær som betingelse for en sådan overdragelse og modtagelse af Aktier, herunder via udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den Sælgende Aktionær eller nogen af dennes tilknyttede virksomheder, har indgået aftale om at påtage sig lockup-forpligtelserne, 6) afståelse i henhold til en retskendelse eller i henhold til love eller bestemmelser, 7) afståelse af Aktier i henhold til et generelt tilbud til alle ejere af aktier i Selskabet afgivet i henhold til overtagelsesbestemmelserne på vilkår, der behandler alle sådanne ejere lige, eller 8) salg af tegningsretter modtaget i forbindelse med en fortegningsemission. Selskabet har indgået aftale med Emissionsbankerne om stort set samme begrænsninger som anført ovenfor i en periode på 180 dage fra Optagelsen med visse undtagelser. Foranstående gælder ikke 1) Aktier udstedt i forbindelse med IPO-omstruktureringen og 2) tildelingen af betingede aktieenheder og Aktier til Direktionen og medarbejdere i Selskabet og dets datterselskaber i henhold til vilkårene for Selskabets Post-IPO LTIP. Bestyrelsen, Direktionen, Nøglemedarbejderen og MIP-deltagerne og Medarbejderaktionærerne har, med visse undtagelser, derudover indgået aftale med Emissionsbankerne om, at de i en periode på 360 dage fra Optagelsen af Aktierne i alt væsentlighed vil være underlagt tilsvarende begrænsninger som Selskabet og de relevante Sælgende Aktionærer som anført ovenfor. De undtagelser, der gælder for Bestyrelsen, Direktionen og Nøglemedarbejderen, omfatter: 1) afståelse til deres respektive a) ægtefælle, b) barn eller c) juridiske enhed, som de alene (eller sammen med en anden af deres respektive nærtstående parter) har bestemmende indflydelse over, forudsat at disse personer indgår aftale om at overholde tilsvarende begrænsninger, 2) salg af de Udbudte Aktier i Udbuddet, 3) afståelse af Aktier i forbindelse med IPO-omstruktureringen og/eller Post-IPO-omstruktureringen, herunder eventuel afståelse, der måtte kræves for direkte eller indirekte at implementere IPO-omstruktureringen og/eller Post-IPO-omstruktureringen, 4) afståelse med henblik på at betale (eventuelle) skatteforpligtelser som følge af IPO-omstruktureringen og/eller Post-IPO-omstruktureringen. --- 29 | Afsnit E—Udbud | | | --- | --- | | | Post-IPO-omstruktureringen (hvis relevant), 5) overdragelse af Aktier til direkte eller indirekte aktionærer i en juridisk enhed kontrolleret af det pågældende medlem af Bestyrelsen, Direktionen, Nøglemedarbejderen eller MIP-deltagerne og Medarbejderaktionærerne, i forbindelse med eller som følge af eventuelt udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den pågældende forpligtede Aktionær eller nogen af dennes tilknyttede virksomheder, forudsat at den pågældende overtagende aktionær som betingelse for en sådan overdragelse og modtagelse af Aktier, herunder via udbytte eller anden udlodning, eller en eventuel likvidation, opløsning, omstrukturering eller anden tilsvarende begivenhed, der påvirker den forpligtede Aktionær eller nogen af dennes tilknyttede virksomheder, har indgået aftale om at påtage sig lockup-forpligtelserne, 6) afståelse i henhold til en retskendelse eller i henhold til love eller bestemmelser, 7) afståelse efter død, varig invaliditet eller afbrydelse af ansættelsen i en periode på mindst 16 uger som følge af invaliditet eller sygdom, 8) afståelse efter ansættelsesforholdet er bragt til ophør af Selskabet (eller det relevante selskab i Koncernen, hvor den pågældende er ansat) eller udtræden af Bestyrelsen, 9) afståelse af Aktier i henhold til et generelt tilbud til alle ejere af aktier i Selskabet afgivet i henhold til overtagelsesbestemmelserne på vilkår, der behandler alle sådanne ejere lige, 10) salg af tegningsretter modtaget i forbindelse med en fortegningsemission, 11) overdragelse af Aktier til en personlig pensionsordning, 12) for personer omfattet af Selskabets Post-IPO LTIP annullering af betingede aktieenheder, hvis ansættelsesforholdet med Koncernen, under visse omstændigheder, ophører, og 13) for MIP-deltagere og Medarbejderaktionærer (som tilsammen ejer mindre end 5% af Selskabets samlede udestående Aktier efter gennemførelsen af IPO-omstruktureringen og Udbuddet), som har indvilget i at sælge deres Aktier til de Væsentlige Aktionærer, hvis de forlader Koncernen, inden for de første tre år efter Optagelsen, et sådant salg og overdragelse til de Væsentlige Aktionærer eller en erhverver udpeget af de Væsentlige Aktionærer. I tillæg til ovenstående har de Sælgende Aktionærer og Bestyrelsen, Direktionen, Nøglemedarbejderen og MIP-deltagerne og Medarbejderaktionærerne ret til hver især at stille sikkerhed i eventuelle Aktier, de besidder ved Optagelsen, på den betingelse, at 1) den begunstigede for en sådan sikkerhedsstillelse, eller 2) i tilfælde af at sikkerhedsrettigheden kræves håndhævet, erhververen (uanset om denne er den begunstigede eller en tredjemand) af disse aktier vil skulle overholde lockup-forpligtelsen. Endvidere har visse af MIP-deltagerne og Medarbejderaktionærerne indgået aftale med Selskabet om, at de Aktier, de modtager som led i IPO-omstruktureringen og/eller Post-IPO-omstruktureringen (svarende til alle de aktier i NC TopCo A/S, de ejer forud for en sådan begivenhed) i en periode på op til tre år fra Optagelsen vil være underlagt visse begrænsninger og undtagelser. Endvidere har disse MIP-deltagere og Medarbejderaktionærer indvilget i at sælge aktier i Selskabet til de Væsentlige Aktionærer (eller en erhverver udpeget af de Væsentlige Aktionærer), hvis deres ansættelse i Koncernen ophører. Hvis ansættelsesophøret for disse MIP-deltagere og Medarbejderaktionærer gennemføres inden for en periode på tre år fra Optagelsen og 1) skyldes disse MIP-deltageres og Medarbejderaktionærers væsentlige misligholdelse af | --- | Afsnit E—Udbud | | | | --- | --- | --- | | | | ansættelsesforholdet, eller 2) disse MIP-deltageres og Medarbejderaktionærers ansættelsesforhold ophører uden grund, vil de Væsentlige Aktionærer være berettiget til at erhverve de Aktier, som disse MIP-deltagere og Medarbejderaktionærer ejer, til en favørkurs i forhold til Aktiernes gældende markedskurs på tidspunktet for et sådant salg til de Væsentlige Aktionærer. Forudsat at Udbudskursen svarer til midtpunktet i Udbudskursintervallet, vil 11.157.978 stk. Aktier efter gennemførelsen af IPO-omstruktureringen og forud for Optagelsen være ejet af MIP-deltagerne og Medarbejderaktionærerne omfattet af denne indeståelse. | | E.6 | Beløb og procentdel for umiddelbar udvanding som følge af Udbuddet | Ikke relevant. Der vil ikke blive udstedt nye Aktier i forbindelse med Udbuddet. | | E.7 | Anslåede udgifter, som investor pålægges af Selskabet eller de Sælgende Aktionærer | Ikke relevant. Hverken Selskabet, de Sælgende Aktionærer eller Emissionsbankerne vil pålægge investorerne omkostninger. Investorerne skal betale sædvanlige transaktions- og ekspeditionsgebyrer til deres kontoførende institutter. | 30 --- # English Summary Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in Sections A-E (A.1-E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer under the Prospectus Regulation no. 486/2012, as amended. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of "not applicable". | Section A—Introduction and Warnings | | | | --- | --- | --- | | A.1 | Warning to investors | This summary should be read as an introduction to this Offering Circular. Any decision to invest in the Offer Shares should be based on consideration of the Offering Circular as a whole by the investor. Where a claim relating to the information contained in the Offering Circular is brought before a court, under the national legislation of the European Economic Area member states, the plaintiff investor might have to bear the costs of translating this Offering Circular before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only if this summary is misleading, inaccurate or inconsistent when read together with the other parts of the Offering Circular or it does not provide, when read together with the other parts of the Offering Circular, key information in order to aid investors when considering whether to invest in the Offer Shares. | | A.2 | Consent for intermediaries | Not applicable. No agreement has been made in regard to the use of the Offering Circular in connection with a subsequent resale or final placement of the Offer Shares. | | Section B-Issuer | | | | --- | --- | --- | | B.1 | Legal and commercial name | The Company is registered with the legal name Netcompany Group A/S and does not have any secondary names. | | B.2 | Domicile, legal form, country of incorporation | The Company has its registered office at Grønningen 17, 1stfloor, DK-1270 Copenhagen K, Denmark, and was incorporated in Denmark as a public limited liability company under the laws of Denmark on 16 April 2018. | | B.3 | Current operations and principal activities | The Group is a pure-play next-generation IT services company, focused on delivering business critical IT solutions to large Public and Private sector customers to lead and support them in their digital transformation journeys. These solutions are at the heart of an organisation’s core strategy or function and are thus highly significant for customers in conducting their core business. The Group has developed and institutionalised a highly differentiated business model that, for over 18 years, has proven to be repeatable and scalable and enables the Group to deliver projects on time, on budget and within scope. The uniqueness of the Group’s business model is characterised by an integrated sales and delivery approach, IT people leading IT people, a very customer transparent and deliverable-driven methodology and a highly skilled team of IT professionals, with an average age in 2017 of approximately 33 years. | --- 32 | Section B—Issuer | | | --- | --- | | | The Group’s business is comprised of two main segments, each of which is an operating segment for financial reporting purposes: - **Public sector.** Through the Group’s Public sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to central and local government, i.e. the state and large municipalities and regions. The Group’s projects in the Public sector encompass the delivery of society critical systems, including tax collection from citizens and on vehicles, payments of public benefits to citizens (e.g. pensions, cash assistance, children/family and property/housing), central registries for companies, properties, employees and public self-service portals relating to public services, including health. The Group estimates its share of the core public market in Denmark (defined as large complex projects for the central government and selected large municipalities that, post development phase, have a significant share of maintenance and operations recurring spending volume) based on total annual IT spend was approximately 6% for the year ended 31 December 2016. Public sector revenues accounted for 55.3% and 51.6% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 50.7% and 39.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. - **Private sector.** Through the Group’s Private sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to mid- and large-sized businesses as well as membership organisations, such as trade unions. The Group delivers business critical IT solutions covering various areas such as e-commerce, billing, document and case management, system integration, customer relationship management (“CRM”) and enterprise risk management (“ERM”), artificial intelligence and information management, very often in combination with each other. The Group estimates its share of the core private market in Denmark (defined as medium and large companies with significant annual IT budgets, companies with strategic focus on using digitalisation as a competitive advantage and complex projects where sophisticated IT capabilities are required) based on total annual IT spend was approximately 7% for the year ended 31 December 2016. Private sector revenues accounted for 44.7% and 48.4% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 49.3% and 61.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. The Group’s IT services cover development through to maintenance and operations. The Group’s development services include design, development and implementation of IT solutions driven by customer requirements in the digital transformation areas of systems modernisation, system differentiation and system innovation projects. Its maintenance and operations services include long term benefit realisation initiatives, to continuously maintain, operate and support customer IT solutions that the Group has delivered. As at 11 May 2018, the Group had approximately 1,432 employees based in its key geographies of Denmark, Norway and the United Kingdom (excluding freelancers in Denmark and Norway) and an additional 319 employees based in Poland and Vietnam. | --- 33 | Section B—Issuer | | | | --- | --- | --- | | B.4a | Description of the most significant recent trends affecting the Company and the industries in which it operates | The Next-Generation IT Services Market and Trends **IT Services Focusing on Innovation and Differentiation** The IT services market is undergoing a secular shift from traditional low-value added services such as infrastructure management and enterprise resource planning (“ERP”) implementation towards high-value added services including digitalisation, custom application development and business process re-engineering. This shift presents opportunities for service providers focused on this large and fast growing segment as organisations across sectors embrace, adapt and respond to the new digital opportunities and efficiency potential made possible by technologies available today. **Increased Customer Demand for Digitalised Processes that Enable Competitive Advantage** Customer focus is shifting from legacy systems to next-generation systems, following the development and fast adoption of new technologies and need to integrate these systems with new digital offerings. This shift is moving project focus from enhancing or maintaining large, monolithic systems and inflexible data assets, to smaller and more flexible architecture for seamless experiences and advanced analytics. **Next-Generation IT Market is Segmented by the Degree of Complexity and Innovation in the Process** Customers are now looking at IT services spend in a “pace layered approach” which includes the following three categories: “Records, Differentiation and Innovation”. A substantial shift of IT spend towards Differentiation and Innovation is expected by 2020, with approximately 50% of total IT spend in 2020 expected to be in Differentiation and Innovation, compared to approximately 10% in 2016. **Focus Markets and Segments** **Public.** In the public sector, the core market includes large, complex projects for the central government focused on developing IT services designed to facilitate and automate public welfare systems, and selected large municipalities that, post-development phase, have significant share of maintenance and operations recurring spending volume. The Group specialises in large and complex projects involving several stakeholders and technical interdependencies, and companies in need of innovative thinking for projects that are innovative or differentiated in nature and end-to-end systems integration, including systems of records. **Private.** In the private sector, the core market includes medium and large companies with significant annual IT spend, companies with strategic focus on using digitalisation as a competitive advantage, and “non-vanilla” projects where sophisticated IT capabilities are required. The Group specialises in highly complex and large IT projects for customers that use IT services to innovate and differentiate themselves from competition and projects that require highly-skilled development. The Group sees further potential for market share gains in the Danish, Norwegian and UK IT services markets and generally focuses on markets that have an advanced digitalisation agenda. | --- 34 | Section B—Issuer | | --- | | B.5 | Description of the Group and the Company’s position within the Group | The Company was incorporated in April 2018 for the purpose of being admitted to trading and official listing on Nasdaq Copenhagen as the parent company of the Group pursuant to a reorganisation whereby the Selling Shareholders (as defined herein) will become the owners of the Company (the “IPO Reorganisation”). As at the date of the Offering Circular, the Company does not have any material assets or liabilities and does not conduct any operating activities prior to the effectiveness of the IPO Reorganisation. The Company has entered into certain Reorganisation Agreements (as defined herein) with the shareholders of the Group and certain Group entities which provide for the IPO Reorganisation to be carried out in connection with pricing and prior to Admission. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, the Shares will be directly owned by the Significant Shareholders (44.1%), André Rogaczewski Holding ApS (the holding company of André Rogaczewski, CEO) (8.5%), Holdingselskabet Claus Jørgensen ApS (the holding company of Claus Jørgensen, COO) (8.5%), Carsten Gomard Holding ApS (the holding company of Carsten Gomard, member of the Board of Directors) (4.4%), NC NorthCo AB (the holding company of Gustaf Löfberg, Country Manager, Denmark) (7.6%), Danica Pension, Livsforsikringsaktieselskab (4.6%) and the MIP Participants and Employee Shareholders (22.3%). The following table sets forth the Group’s material subsidiaries which are, directly or indirectly held by NC TopCo A/S, as at the date of this Offering Circular: | | Entity Name | Country of Incorporation | Percentage of (Direct or Indirect) Ownership Interest and Voting Rights | | NC Newco A/S | Denmark | 100% | | Netcompany Holding I A/S (formerly Netcompany A/S) | Denmark | 100% | | Netcompany UK Ltd (formerly Hunter Macdonald Ltd) | United Kingdom | 100% | | Netcompany UK Holding Ltd | Kingdom | 100% | | Netcompany Norway AS (formerly Mesan AS) | Norway | 100% | | Netcompany A/S (formerly Netcompany IT and Business Consulting A/S) | Denmark | 100% | | Netcompany Poland Sp. Z o.o. (formerly Netcompany Solutions Sp. Z o.o.) | Poland | 100% | | The Group has selected the material subsidiaries on the basis of a commercial materiality assessment, primarily focusing on (i) where revenue is generated and (ii) where a substantial part of the Group’s assets are held. The material subsidiaries represented 100% of the Group’s total revenue and 99.4% of the Group’s total EBITDA for the three months ended 31 March 2018 and 99.9% of the Group’s total assets as of 31 March 2018. | --- 35 | Section B—Issuer | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | B.6 | Persons who, directly or indirectly, have an interest in the issuer's capital or voting rights or have control over the Company | Following completion of the IPO Reorganisation and prior to Admission, the Shares will be directly owned by the Significant Shareholders (44.1%), André Rogaczewski Holding ApS (8.5%), Holdingselskabet Claus Jørgensen ApS (8.5%), Carsten Gomard Holding ApS (4.4%), NC NorthCo AB (7.6%), Danica Pension, Livsforsikringsaktieselskab (4.6%) and the MIP Participants and Employee Shareholders (22.3%) (ownership stakes assume an Offer Price at the midpoint of the Offer Price Range). The Significant Shareholders comprise FSN Capital IV L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, which are limited partnerships organised under the laws of Jersey and FSN Capital IV (B) L.P. organised under the laws of England. FSN Capital IV Netcompany Co-Investment LP is a direct co-investment vehicle for certain of the investors in FSN fund IV. FSN Capital GP IV Limited is acting as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. All Shares have the same rights and rank pari passu in respect of, inter alia, voting rights. Other than as set out above, the Company is not aware that any person directly or indirectly owns an interest in the Company's share capital or voting rights that would be notifiable under Danish law. For further information on the Selling Shareholders, see item E.5. | | | | | | B.7 | Selected financial and business information | The selected consolidated financial information comprising selected consolidated income statement, balance sheet and cash flow statements shown below has been derived from the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular. The selected Other Data and Financial Measures as well as the segmental and operating information below has been derived from the Group's regularly maintained records and operating systems. Combined Income Statement | | | | | | | | Three months ended 31 March | | Year ended 31 December | | | | | | 2018 | 2017 | 2017 | 2016(1) | 2015 | | | | DKK million | | | | | | | Revenue | 517.0 | 332.9 | 1,416.1 | 899.6 | 758.1 | | | Cost of services | (318.8) | (192.3) | (803.4) | (527.0) | (446.8) | | | Gross profit | 198.2 | 140.6 | 612.7 | 372.6 | 311.3 | | | Sales and marketing costs | (2.7) | (2.0) | (9.7) | (3.7) | (3.8) | | | Administrative costs | (67.7) | (42.8) | (201.0) | (120.9) | (100.1) | | | Operating expenses | (70.4) | (44.8) | (210.7) | (124.6) | (103.9) | | | Special items | (7.7) | 0 | (32.9) | (35.1) | — | | | EBITA (non-IFRS) | 120.1 | 95.7 | 369.0 | 212.9 | 207.4 | | | Amortisation | (28.8) | (23.9) | (95.9) | (73.8) | — | | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | | Net financials | (24.7) | (23.9) | (72.2) | (62.7) | 0.2 | | | EBT | 66.5 | 48.0 | 201.0 | 76.4 | 207.6 | | | Tax for the period | (15.3) | (12.1) | (59.4) | (43.6) | (19.8) | | | Profit/(loss) for the period | 51.2 | 35.9 | 141.6 | 32.8 | 187.8 | --- 36 # Section B—Issuer (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) which, in total, comprise the Group. ## Organic revenue/organic revenue growth (non-IFRS) | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | DKK million, unless otherwise indicated | | | | | | | Group | | | | | | | Group Revenue | 517.0 | 332.9 | 1,416.1 | 899.6 | 758.1 | | Group impact of constant currency adjustments | 3.2 | — | 4.7 | — | — | | Group impact of acquisitions | (77.1) | (35.1) | (188.8) | (11.7) | — | | Group Organic Revenue (non-IFRS) | 443.2 | 297.8 | 1,232.0 | 887.9 | 758.1 | | Group Organic Revenue Growth (non-IFRS) | 33.1% | 45.3% | 37.0% | 17.1% | 20.5% | | Sector | | | | | | | Public sector revenue | 285.8 | 152.6 | 730.2 | 368.3 | 311.5 | | Public sector impact of constant currency adjustments | 1.8 | 0.0 | 2.4 | — | — | | Public sector impact of acquisitions | (11.8) | (11.4) | (83.5) | (2.8) | — | | Public Sector Organic Revenue (non-IFRS) | 275.8 | 141.2 | 649.1 | 365.6 | 311.5 | | Public Sector Organic Revenue Growth (non-IFRS) | 80.7% | 63.7% | 76.2% | 17.4% | 16.8% | | Private sector revenue | 231.2 | 180.3 | 685.9 | 531.3 | 446.6 | | Private sector impact of constant currency adjustments | 1.4 | 0.0 | 2.3 | — | — | | Private sector impact of acquisitions | (65.3) | (23.7) | (105.2) | (9.0) | — | | Private Sector Organic Revenue (non-IFRS) | 167.4 | 156.6 | 583.0 | 522.3 | 446.6 | | Private Sector Organic Revenue Growth (non-IFRS) | (7.2)% | 31.9% | 9.7% | 16.9% | 23.2% | | Geography | | | | | | | Denmark(1) revenue | 397.3 | 297.8 | 1,220.3 | 887.9 | 758.1 | | Denmark impact of constant currency adjustments | — | — | — | — | — | | Denmark impact of acquisitions | — | — | — | — | — | | Denmark Organic Revenue (non-IFRS) | 397.3 | 297.8 | 1,220.3 | 887.9 | 758.1 | | Denmark Organic Revenue Growth (non-IFRS) | 33.4% | 45.3% | 37.4% | 17.1% | 20.5% | | Norway Revenue | 42.6 | 35.1 | 133.9 | 11.7 | — | | Norway impact of constant currency adjustments | 3.2 | — | 4.7 | — | — | | Norway impact of acquisitions | — | (35.1) | (126.9) | (11.7) | — | --- 37 # Section B—Issuer | | Norway Organic Revenue (non-IFRS) | 45.8 | — | 11.7 | — | — | | --- | --- | --- | --- | --- | --- | --- | | | Norway Organic Revenue Growth (non-IFRS) | 30.6% | — | 0.0% | — | — | | | United Kingdom(2) Revenue | 77.1 | — | 61.9 | — | — | | | United Kingdom impact of constant currency adjustments | — | — | — | — | — | | | United Kingdom impact of acquisitions | 77.1 | — | (61.9) | — | — | | | United Kingdom Organic Revenue (non-IFRS) | — | — | — | — | — | | | United Kingdom Organic Revenue Growth (non-IFRS) | — | — | — | — | — | | | (1) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s Danish projects including revenue generated from the Group’s sourcing center in Poland. | | | | | | | | (2) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s UK projects including revenue generated from the Group’s sourcing center in Vietnam. | | | | | | | | Balance Sheet Data | | | | | | | | | Three Months ended 31 March | | Year ended 31 December | | | | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | | DKK million | | | | | | | Goodwill | 2,108.7 | 1,883.9 | 2,108.7 | 1,883.9 | 0.0 | | | Other intangible assets | 465.2 | 463.6 | 495.2 | 488.7 | 4.1 | | | Intangible assets | 2,573.9 | 2,347.5 | 2,603.9 | 2,372.5 | 4.1 | | | Leasehold improvements | 4.3 | 3.1 | 3.9 | 2.2 | 2.1 | | | Equipment | 20.8 | 15.4 | 20.0 | 14.0 | 6.4 | | | Right of use assets | 26.9 | 25.2 | 30.5 | 25.2 | 11.9 | | | Property, plant and equipment | 52.0 | 43.8 | 54.5 | 41.5 | 20.4 | | | Other receivables | 9.9 | 6.4 | 8.8 | 5.4 | 4.0 | | | Deferred tax assets | 0.7 | 0.2 | 0.0 | 0.2 | 11.0 | | | Financial assets | 10.6 | 6.6 | 8.8 | 5.6 | 15.0 | | | Non-current assets | 2,636.4 | 2,397.9 | 2,667.2 | 2,419.6 | 39.5 | | | Trade receivables | 318.7 | 193.6 | 445.4 | 258.2 | 180.3 | | | Receivables from group entities | — | 0.0 | 0.0 | 0.0 | 97.7 | | | Contract work in progress | 301.6 | 170.7 | 139.2 | 110.5 | 80.9 | | | Other receivables | 9.3 | 2.2 | 11.0 | 6.8 | 1.0 | | | Prepayments | 6.6 | 6.0 | 12.3 | 5.3 | 5.2 | | | Receivables | 636.1 | 372.4 | 607.8 | 380.8 | 365.1 | | | Cash | 154.2 | 71.2 | 194.5 | 60.0 | 111.5 | | | Current assets | 790.4 | 443.7 | 802.3 | 440.8 | 476.6 | | | Assets | 3,426.8 | 2,841.5 | 3,469.5 | 2,860.4 | 516.1 | | Share capital | 71.7 | 69.4 | 71.6 | 69.3 | 0.6 | | | Cash flow hedging reserve | (29.8) | (38.7) | (30.0) | (39.8) | 0.0 | | | Foreign currency translation reserve | (5.2) | (2.1) | (2.9) | (0.1) | 0.0 | | | Deferred cost of hedging reserve | 13.1 | 20.9 | 10.4 | 18.0 | 0.0 | | | Retained earnings | 1,652.8 | 1,252.8 | 1,594.8 | 1,213.1 | 299.8 | | | Equity | 1,702.6 | 1,302.3 | 1,643.9 | 1,260.5 | 300.4 | | --- 38 | Section B—Issuer | | --- | | | | Borrowings | 1,167.3 | 1,175.7 | 1,264.9 | 1,178.0 | | Leasing | 15.0 | 13.6 | 17.6 | 13.6 | | Deferred tax liability | 116.9 | 106.1 | 112.4 | 111.2 | | Non-current liabilities | 1,299.2 | 1,295.4 | 1,394.9 | 1,302.8 | | Borrowings | — | 0.6 | 0.0 | 28.0 | | Leasing | 12.8 | 11.7 | 13.6 | 11.7 | | Prepayments received from customers | 46.2 | 19.5 | 36.2 | 27.5 | | Trade payables | 54.3 | 16.9 | 50.6 | 26.8 | | Payables to group entities | — | 0.0 | 0.0 | 0.0 | | Other payables | 199.9 | 157.7 | 223.1 | 163.3 | | Provisions | 30.4 | 2.5 | 30.4 | 8.9 | | Income tax payable | 81.4 | 34.8 | 76.8 | 31.0 | | Current liabilities | 425.0 | 243.8 | 430.7 | 297.1 | | Liabilities | 1,724.2 | 1,539.2 | 1,825.6 | 1,599.9 | | Equity and liabilities | 3,426.8 | 2,841.5 | 3,469.5 | 2,860.4 | | Statement of Cash Flow Data | | Three months ended 31 March | Year ended 31 December | | 2018 | 2017 | 2017 | 2016(2) | 2015 | | | DKK million | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | Depreciation and amortization | 38.5 | 27.7 | 129.2 | 94.2 | 20.6 | | Working capital changes | (35.0) | (20.7) | (95.0) | (19.6) | 9.1 | | Free cash flow(1) | 94.7 | 78.9 | 307.3 | 213.6 | 237.2 | | Paid taxes | (10.4) | (19.4) | (35.4) | (34.0) | (20.6) | | Net financials | (13.3) | (15.6) | (76.6) | (62.7) | 0.2 | | Cash flows from operating activities | 71.1 | 43.8 | 195.3 | 116.9 | 216.8 | | Net cash outflow on acquisition of subsidiaries | — | 0.0 | (120.3) | (2,516.1) | 0.0 | | Acquisition of intangible assets | — | 0.0 | (11.1) | (9.2) | (5.9) | | Acquisition of property, plant and equipment | (3.5) | (4.9) | (16.7) | (13.0) | (3.0) | | Other receivables (deposits) | (1.1) | 0.0 | (2.3) | (1.5) | (0.6) | | Cash flows from investing activities | (4.6) | (4.9) | (150.5) | (2,539.7) | (9.6) | | Dividends | — | 0.0 | 0.0 | (116.4) | (100.0) | | Proceeds from issue of share capital | 6.9 | 3.9 | 16.7 | 1,265.1 | 0.0 | | Proceeds from borrowings | — | 0.0 | 92.0 | 1,178.0 | 0.0 | | Repayment of borrowing | (114.7) | (3.9) | (16.6) | (11.0) | (8.6) | | Cash flows from financing activities | (107.7) | (0.0) | 92.2 | 2,315.7 | (108.6) | | Net cash flow | (41.2) | 38.9 | 137.0 | (107.0) | 98.6 | | Cash and cash equivalents at beginning of period | 194.5 | 32.0 | 32.0 | 111.5 | 12.9 | | Cash and cash equivalents balances acquired | — | 0.0 | 26.3 | 27.6 | 0.0 | | Effect of exchange rate changes on the balance cash held in foreign currencies | (1.0) | (0.2) | (0.8) | (0.1) | 0.0 | | Cash and cash equivalents at end of period | 154.2 | 70.7 | 194.5 | 32.0 | 111.5 | --- 39 | Section B—Issuer | | | --- | --- | | | (1) Free cash flow is defined as cash flow from operating activities less cash flow from paid taxes, net financials and investing activities. | | | **Comparison of Results for the Group for the Three Months Ended 31 March 2018 and 31 March 2017** | | | Revenue increased by DKK 184.1 million, or 55.3%, from DKK 332.9 million for the three months ended 31 March 2017 to DKK 517.0 million for the three months ended 31 March 2018, principally due to growth in revenue in Denmark and Norway as well as the acquisition of Hunter Macdonald Ltd. The organic growth for the three months ended 31 March 2018 was a result of significant Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. | | | Public sector segment revenue accounted for 55.3% and 45.8% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Private sector segment revenue accounted for 44.7% and 54.2% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. | | | • Public sector segment revenue increased by DKK 133.2 million, or 87.3%, from DKK 152.6 million for the three months ended 31 March 2017 to DKK 285.8 million for the three months ended 31 March 2018. Organic revenue growth was 80.7%, primarily driven by Danish Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. Of the DKK 285.8 million in Public sector segment revenue for the three months ended 31 March 2018, DKK 11.8 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the three months ended 31 March 2017 would have been DKK 152.6 million. | | | • Private sector segment revenue increased by DKK 50.9 million, or 28.2%, from DKK 180.3 million for the three months ended 31 March 2017 to DKK 231.2 million for the three months ended 31 March 2018. Organic revenue decreased by 7.2%, largely attributable to the increased focus on the public sector segment which has required a large part of the Danish, Polish and Norwegian workforce to complete and deliver those projects. Of the DKK 231.2 million in Private sector segment revenue for the three months ended 31 March 2018, DKK 65.3 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the three months ended 31 March 2017 would have been DKK 180.3 million. | | | Adjusted EBITA increased by DKK 32.1 million, or 33.5%, from DKK 95.7 million for the three months ended 31 March 2017 to DKK 127.8 million for the three months ended 31 March 2018, principally due to the increase in revenue. Adjusted EBITA margin decreased from 28.8% for the three months that ended 31 March 2017 to 24.7% for the three months that ended 31 March 2018, principally due to higher costs in the United Kingdom attributable to the higher proportion of subcontractors used in the United Kingdom compared | --- 40 | Section B—Issuer | | | --- | --- | | | to Denmark and Norway. As a result, gross profit margin decreased from 42.2% for the three months ended 31 March 2017 to 38.3% for the three months ended 31 March 2018. Comparison of Results for the Group for the Years Ended 31 December 2017 and 31 December 2016 Revenue increased by DKK 516.5 million, or 57.4%, from DKK 899.6 million in 2016 to DKK 1,416.1 million in 2017, principally due to organic growth in Denmark of DKK 332.4 million compared to DKK 129.8 million in 2016 and additional revenue of DKK 133.9 million and DKK 61.9 million generated due to the acquisitions of Mesan AS and Hunter Macdonald Ltd, respectively. The organic growth in 2017 was a result of significant Public sector tender wins in 2015 and 2016 that the Group worked on during 2017, along with wins of additional Public sector tenders in 2017, from their respective dates of consolidation. Public sector segment revenue accounted for 51.6% and 40.9% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Private sector segment revenue accounted for 48.4% and 59.1% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. - Public sector segment revenue increased by DKK 361.8 million, or 98.2%, from DKK 368.3 million for the year ended 31 December 2016 to DKK 730.2 million for the year ended 31 December 2017. Organic revenue growth was 76.2% and 17.4% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the large public tenders won by the Group in Denmark in 2016 and 2017. Of the DKK 730.2 million in Public sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the year ended 31 December 2017 would have been DKK 699.2 million. - Private sector segment revenue increased by DKK 154.6 million, or 29.1%, from DKK 531.3 million for the year ended 31 December 2016 to DKK 685.9 million for the year ended 31 December 2017. Organic revenue growth was 9.7% and 16.9% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the renewal by several of the Group's large Danish customers of their engagements, as well as by the Group winning new major customers during the periods. Of the DKK 685.9 million in Private sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the year ended 31 December 2017 would have been DKK 655.0 million. Adjusted EBITA increased by DKK 153.9 million, or 62.1%, from DKK 248.0 million in 2016 to DKK 402.0 million in 2017, principally due to the increased FTE activity level in 2017. Further, margins improved as a result of continued operational leverage in delivering projects. | --- 41 | Section B—Issuer | | | | --- | --- | --- | | | | Comparison of Results for the Group for the Years Ended 31 December 2016 and 31 December 2015 Revenue increased by DKK 141.5 million, or 18.7%, from DKK 758.1 million in 2015 to DKK 899.6 million in 2016, driven by the increase in revenue of DKK 56.9 million in the Public sector segment and an increase of DKK 84.6 million in the Private sector segment. Public sector segment revenue accounted for 40.9% and 41.1% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Private sector segment revenue accounted for 59.1% and 58.9% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. • Public sector segment revenue increased by DKK 56.9 million, or 18.3%, from DKK 311.5 million for the year ended 31 December 2015 to DKK 368.3 million for the year ended 31 December 2016. Organic revenue growth was 17.4% and 16.8% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 368.3 million in Public sector segment revenue for the year ended 31 December 2016, DKK 2.8 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Public sector segment revenue for the year ended 31 December 2016 would have been DKK 365.6 million. • Private sector segment revenue increased by DKK 84.6 million, or 19.0%, from DKK 446.6 million for the year ended 31 December 2015 to DKK 531.3 million for the year ended 31 December 2016. Organic revenue growth was 16.9% and 23.2% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 531.3 million in Private sector segment revenue for the year ended 31 December 2016, DKK 9.0 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Private sector segment revenue for the year ended 31 December 2016 would have been DKK 522.3 million. Adjusted EBITA increased by DKK 40.7 million, or 19.6%, from DKK 207.4 million in 2015 to DKK 248.0 million in 2016, due to the increase in gross profit margin and a lower increase in administration, sales and marketing costs relative to the increase in Group revenue. As of the date of this Offering Circular, there have been no significant changes to the Group’s financial condition and operating results since 31 March 2018. | | B.8 | Selected key pro forma financial information | Not applicable. No pro forma financial information is presented in the Offering Circular as there have not been any transactions that result in a significant (defined as more than 25%) gross change in relevant indicators such as total assets, net revenue or net profit. | | B.9 | Profit forecast or estimate | With respect to the consolidated prospective financial information for the year ending 31 December 2018, the Group targets reported revenue at the top end of the range between DKK 1,940 million and DKK 2,011 million (equal to revenue growth at the top end of the range of between 37% and 42%), organic revenue to grow at the top end of the range of between 20% and 25%, earnings before tax of between DKK 213 million and DKK 282 million (equal to an earnings before tax margin of between 11% and 14%) and an | --- 42 | Section B—Issuer | | | | --- | --- | --- | | | | adjusted EBITA margin of between 24.5% and 27.5%. The Group estimates that special items will be between DKK 30 million and DKK 35 million in 2018. With respect to the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, the Group targets annual reported revenue growth to be between 20% and 25%, annual organic revenue growth to be between 20% and 25%, earnings before tax margin to be in the low to mid 20s% range in 2021 at the latest, and EBITA margin to be in the mid to high 20s% range in 2021 at the latest. | | B.10 | Qualifications in the audit report on the historical financial information | Not applicable. The audit reports on the historical financial information included in the Offering Circular have been issued without qualifications. | | B.11 | Explanation if the issuer’s working capital is not sufficient for the Company’s present requirements | Not applicable. In the opinion of the Group, the working capital available to the Group is, at the time of completion of the IPO Reorganisation, sufficient for its present requirements for the next twelve months following the date of this Offering Circular. The working capital of the Group and its need thereof is directly tied to completion of the Refinancing, which is subject to completion of the Offering. | | Section C—Securities | | | | --- | --- | --- | | C.1 | A description of the type and the class of the Offer Shares, including any security identification number | The Shares, including the Offer Shares, are not divided into share classes. Permanent ISIN for the Shares: DK0060952919 | | C.2 | Currency of the Offer Shares | The Offer Shares will be denominated in Danish kroner (“DKK”). | | C.3 | The number of Shares issued and fully paid and issued but not fully paid | Upon completion of the IPO Reorganisation, the Company’s share capital has a nominal value of DKK 50,000,000, divided into 50,000,000 Shares of DKK 1 each or multiples thereof, which will all be issued and fully paid up. | | C.4 | A description of the rights attached to the Shares | All Shares, including the Offer Shares, have the same rights and the Offer Shares will rank pari passu with all other Shares in the Company in respect of voting rights, preemption rights, redemption, conversion and restrictions or limitations according to the articles of association of the Company (the “Articles of Association”) or eligibility to receive dividends or proceeds in the event of dissolution and liquidation. No Shares carry special rights, restrictions or limitations pursuant to the Articles of Association. Each Share with a nominal value of DKK 1 gives the holder the right to one vote at the Company’s general meetings and to receive distributed dividends. Every shareholder is entitled to have specific business transacted at the general meeting, provided that the shareholder submits a written request to that effect to the Board of Directors not later than six weeks before the date of the general meeting. | | C.5 | A description of any restrictions on the free transferability of the Shares | Not applicable. The Shares are negotiable instruments and no restrictions under the Articles of Association or Danish law apply to the transferability of the Shares. | --- 43 | Section C—Securities | | | | --- | --- | --- | | C.6 | Admission to trading on a regulated market | Application has been made for the Shares to be admitted to trading and official listing on Nasdaq Copenhagen under the symbol “NETC”. The Admission is subject to, among other things, completion of the IPO Reorganisation, Nasdaq Copenhagen’s approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to the settlement and the Company making an announcement to that effect. If the Offering is closed before 6 June 2018, the Admission, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. Payment for and settlement of the Offer Shares are expected to take place on or around 11 June 2018. The first day of trading and official listing of the Shares on Nasdaq Copenhagen under the permanent ISIN is expected to be 7 June 2018 subject to the Offering not being withdrawn prior to settlement and completion of the Offering. | | C.7 | A description of dividend policy | The Company currently intends to use its available financial resources and free cash flow to service the Group’s debt and invest in continued future growth and therefore does not expect to pay out dividends in 2018 or 2019. Any future decision to propose dividends and the amounts and timing thereof, will be made at the discretion of the Board of Directors and will depend on a number of factors, including future revenue, profits, financial conditions, general economic and business conditions, and future prospects and such other factors as the Board of Directors may deem relevant, as well as other legal and regulatory requirements. There can be no assurances that the Group’s performance will facilitate adherence to the dividend policy, and, in particular, the Company’s ability to pay dividends may be impaired if any of the risks described in this Offering Circular were to occur. Furthermore, the Company’s dividend policy is subject to change as the Board of Directors will revisit the dividend policy from time to time. There can be no assurances that in any given year a dividend will be proposed or declared. As an alternative, or in addition to, making dividend payments, the Board of Directors may initiate share buybacks. | | Section D—Risks | | | | --- | --- | --- | | D.1 | Key information on the key risks that are specific to the Company or its industry | The risks and uncertainties discussed below are those that the Group’s management currently views as material, but these risks and uncertainties are not the only ones that the Group faces. Additional risks and uncertainties, including risks that are not known to the Group at present or that its management currently deems immaterial, may also arise or become material in the future, which could lead to a decline in the value of the Offer Shares and a loss of part or all of your investment. The following risk factors are not listed in any particular order of priority as to significance or probability. • Any failure in a customer’s infrastructure or applications as a result, or alleged result, of the Group’s IT services could result in penalties, claims for substantial damages, require corrective measures and/or cause significant reputational harm. | --- 44 | Section D—Risks | | | --- | --- | | | • The Group’s ability to attract and retain both IT professionals and customers depends on the Group’s reputation in the marketplace. Negative media coverage and public scrutiny may adversely affect the Group’s business and the price of the Shares. • The Group’s success depends upon its management team, highly skilled IT professionals and consultants, its ability to hire, attract, motivate, retain and train such personnel, and the Group’s wages are subject to wage inflation. • The Group may not be able to protect itself against cyber threats that have the potential to significantly disrupt the Group and its customers’ services. • The Group may not be successful at identifying, acquiring or integrating other businesses or technologies. • Any inability to manage and sustain the Group’s growth could disrupt its business and reduce its profitability. • If the Group or its customers do not accurately forecast volumes required for fixed fee contracts or contracts with degressive price models, the total contract value of its contracts could be lower than anticipated, and if the Group’s pricing does not anticipate the cost and complexity of performing its work, the Group’s contracts could be unprofitable. • Changes in laws and regulations or changed interpretation or enforcement of such laws and regulations may sometimes be unpredictable, which could adversely affect the Group’s business. In particular, changes in Danish tax laws, privacy and data protection regulations and national security regulations, if adopted, could adversely affect the Group’s business. • Privacy and data protection compliance breaches or failure to protect confidential information could harm the Group’s reputation and expose it to litigation and/or other legal or regulatory actions and/or sanctions. • The Group and its customers are subject to extensive legislative, industry and business requirements, and the Group or its employees may inadvertently violate certain laws and requirements as a consequence of the Group’s rapid growth. • The Group is subject to the risk of reduced customers’ IT expenditure levels. • Transformation into a listed public company will increase the Group’s costs and may disrupt the regular operations of its business and require adjustments of certain policies, procedures and strategies. • Adverse events affecting the stability and standing of the European Union as a single market may have a negative effect on global economic conditions, financial markets and the Group’s business. • The markets in which the Group competes are highly competitive, and the Group might not be able to compete effectively. | --- 45 | Section D—Risks | | | --- | --- | | | • The Group’s results of operations could be negatively affected if it cannot adapt, expand and develop its IT services in response to changes in technology, customer demand, or market developments. • The Group’s success depends on its ability to retain customers and win additional work from existing clients. • The Group’s work with Public sector customers exposes the Group to additional risks inherent in the Public sector contracting environment. • A Public sector customer’s decision following a tender won by the Group to award the contract to the Group may be challenged before administrative tribunals and/or courts and it is uncertain whether the Group will be successful in defending against such a challenge. • The Group’s insurance coverage may be insufficient. • The Group may incur additional costs from its use of subcontractors and may be liable for their mistakes. • The Group could be subject to liability if its strategic partners, vendors or service providers do not perform their obligations or deliver their project contributions on time or at all. • The Group’s IT services could infringe upon third-party intellectual property rights and it may lose its ability to utilise the intellectual property of third parties. • The widespread use of the Group’s Modulus platform by, and the high market share among, trade unions exposes the Group to the risk that competitors develop a platform that unions consider preferable to Modulus. • A significant portion of the Group’s revenues depends on a limited number of customers. • The Group’s rapid increase in market shares in certain areas may cause its customers, particularly within the Public sector segment, to give more business to the Group’s competitors in order to diversify, and competition regulations or authorities may limit the Group’s ability to grow and may force the Group to alter its business practices. • If the Group were unable to bill for its services or collect its receivables, its results of operations and cash flows could be materially adversely affected. • Any disruption in data centre operations or telecommunications systems failures could harm the Group’s ability to deliver its IT services, damage its reputation or otherwise materially adversely affect its business. • The Group’s revenue visibility is subject to certain assumptions and estimates and expected revenue may not be realised in full. • The Group may face difficulties in delivering complex and large projects to its customers which could result in loss of business and reputational harm. • Failure to maintain utilisation levels may have an adverse effect on the Group’s margins. | --- 46 | Section D—Risks | | | | --- | --- | --- | | | | • The Group’s future results may differ materially from what is expressed or implied by the forecast of consolidated financial information and projections of consolidated medium term financial targets included in this Offering Circular, and investors should not place undue reliance on this information. • The Group’s consolidated balance sheet includes significant amounts of goodwill and intangible assets in connection with acquisitions and faces the risk of impairment of a significant portion of these assets. • The Group may be unable to obtain financing or guarantee facilities at favourable terms, or at all, or perform payment obligations due to insufficient liquidity. • The Group’s degree of leverage and ability to incur additional indebtedness could have a material adverse effect on its ability to obtain additional financing or make it more vulnerable in the event of a downturn in business or the economy generally. • The Group’s New Facilities contain, and its future debt arrangements could contain, covenants that limit the Group’s liquidity and flexibility in obtaining additional financing, in pursuing business acquisitions or other corporate activities or its ability to declare dividends to its shareholders. • The Group depends on protecting its proprietary technology and intellectual property rights, and protective measures may prove costly, time consuming and may not be resolved in the Group’s favour. • The Group may be the subject of litigation, which, if adversely determined, could harm its business, reputation, results of operations, financial condition and prospects. • The Group’s international operations are subject to certain risks inherent in doing business internationally. • Some of the Group’s contracts with its customers include change of control provisions which could be triggered by the Offering or a subsequent change of control. • The Group may lose IT audit certifications, or suffer harm from not being able to obtain new IT audit certifications in a timely manner. • The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies. • Interest rate fluctuations could materially adversely affect the Group’s business, results of operations, financial condition and cash flows. | | D.3 | Key information on the key risks relating to the Offer Shares | • Following the Offering, the Significant Shareholders and certain members of the Board of Directors, Executive Management and the Key Employee, will continue to be large shareholders and may control or otherwise influence important actions the Group takes. • There is limited free float in the Shares. • The Shares have not previously been publicly traded, and their price may be volatile and fluctuate. | --- 47 | Section D—Risks | | | | --- | --- | --- | | | | • Future sales of Shares after the Offering may cause a decline in the market price of the Shares. • The issuance of additional Shares in the Company in connection with future acquisitions, any share incentive or share option plan or otherwise may dilute all other shareholdings. • The Company may not be able or may decide not to pay dividends at a level anticipated by shareholders on its Shares, which could reduce investors’ return on Shares. • Shareholders in the United States and other non-Danish jurisdictions may not be able to participate in future equity offerings. • The Offering may be withdrawn after Admission to trading and official listing of the Shares and until settlement of the Offering. | | Section E—Offer | | | | --- | --- | --- | | E.1 | Total net proceeds of the Offer and estimated expenses | The Group will not receive any of the proceeds from the sale of the Offer Shares by the Selling Shareholders in the Offering. The total expenses in relation to the Offering payable by the Group to the Managers, other advisor fees and expenses and fees related to the Refinancing, are estimated to be approximately DKK 50 million, of which 17.5 million were expensed in the financial year ended 2017. In addition, certain expenses in relation to the Offering, including commissions and fees (fixed and discretionary) to be paid to the Managers, are payable by the Selling Shareholders based proportionately on the numbers of Offer Shares that are sold in the Offering. Further, the Selling Shareholders have agreed to pay a selling commission to account holding banks (unless such account holding bank is a Manager) equivalent to 0.25% of the Offer Price of the Offer Shares that are allocated in respect of orders of up to and including DKK 3 million submitted through the account holding banks (except for the Managers) to be paid proportionally by the Selling Shareholders based on the number of Offer Shares, respectively, that are sold. | | E.2a | Reasons for the Offer and use of proceeds, estimated net amount of the proceeds | The Offering is expected to support the Group’s operational strategy, advance the Company’s public and commercial profile, and provide improved access to public capital markets and a diversified base of new Danish and international shareholders. The Group believes that these factors will further enhance its competitive position, in relation to other IT services companies, and provide the appropriate platform for the Group’s future development. The Group will not receive any part of the proceeds from the sale of Offer Shares sold by the Selling Shareholders. | | E.3 | Terms and conditions of the Offer | The Selling Shareholders are offering 20,000,000 Offer Shares, excluding any Shares subject to the Overallotment Option. The Significant Shareholders have agreed to grant the Joint Global Coordinators, on behalf of the Managers, an Overallotment Option to purchase up to 3,000,000 Option Shares at the Offer Price, exercisable, in whole or in part, from the date of Admission until | --- 48 | Section E—Offer | | | --- | --- | | | 30 calendar days thereafter, solely to cover overallotments or short positions, if any, incurred in connection with the Offering. The Significant Shareholders are offering between 8,753,013 and 8,878,762 Offer Shares, excluding any Shares subject to the Overallotment Option and between 11,753,013 and 11,878,762 Offer Shares, including all Shares subject to the Overallotment Option. André Rogaczewski Holding ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Holdingselskabet Claus Jørgensen ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Carsten Gomard Holding ApS is offering between 879,209 and 880,031 Offer Shares, NC NorthCo AB is offering between 1,501,921 and 1,523,498 Offer Shares, Danica Pension, Livsforsikringsaktieselskab is offering between 842,262 and 1,029,431 Offer Shares and the MIP Participants and Employee Shareholders are offering between 4,452,740 and 4,471,735 Offer Shares. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. Each of the Selling Shareholders will sell a number of Shares pro rata to their relative ownership of the Company, following completion of the IPO Reorganisation, but prior to Admission. The exact number of Shares to be held by each Selling Shareholder, following completion of the IPO Reorganisation, will be determined on the basis of the final Offer Price, as part of the IPO Reorganisation. The Significant Shareholders have, pursuant to a Share Lending Agreement, agreed with the Joint Global Coordinators to make available up to 3,000,000 Shares for purposes of delivery of the Offer Shares to investors in connection with the Overallotment Option. The Shares made available by the Significant Shareholders shall be redelivered by the Joint Global Coordinators, no later than following the expiry of the Overallotment Option. No costs, interest or other payments shall be made by the Group as a result of the Share Lending Agreement or the Overallotment Option, if exercised. The Offering consists of: (i) an initial public offering to retail and institutional investors in Denmark; (ii) a private placement in the United States to persons who are “qualified institutional buyers” or “QIBs” (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A; and (iii) private placements to institutional investors in the rest of the world. The Offering outside the United States will be made in compliance with Regulation S under the U.S. Securities Act. The Offer Price Range is expected to be between DKK 135 and DKK 165 per Offer Share and will be determined through a book-building process. The Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, Board of Directors and the Joint Global Coordinators and is expected to be announced through Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. The Offer Price Range may be adjusted during the book-building process. If the Offer Price Range is adjusted, the Company will make an announcement through Nasdaq Copenhagen and publish a supplement to this Offering Circular. Following publication of such | --- 49 | Section E—Offer | | | --- | --- | | | supplement, investors who have submitted orders to purchase Offer Shares in the Offering will have two trading days to withdraw their purchase offer. In such an event, the announcement of the final Offer Price will not be published until the period for exercising such withdrawal rights has ended. The Offer Price may thus be outside of the Offer Price Range. The Offer Period will commence on 23 May 2018 and will close no later than 6 June 2018 at 11:00 a.m. (CET). The Offer Period may be closed prior to 6 June 2018; however, the Offer Period will not be closed in whole or in part before 1 June 2018 at 00:01 a.m. (CET). If the Offering is closed before 6 June 2018, the announcement of the Offer Price, allocation and the Admission may be moved forward accordingly. The Offer Period in respect of applications for purchases of amounts up to, and including, DKK 3 million may be closed before the remainder of the Offering is closed. Any such earlier closing, in whole or in part, will be announced through Nasdaq Copenhagen. The minimum subscription/purchase amount is one Offer Share. No maximum subscription amount applies to the Offering. However, the number of shares is limited to the number of Offer Shares in the Offering. Applications by Danish investors to purchase for amounts of up to and including DKK 3 million should be made by submitting the application form enclosed in the English Language Prospectus to the investor’s own account holding bank during the Offer Period or such shorter period as may be announced through Nasdaq Copenhagen. Applications are binding and cannot be altered or cancelled. Bids may be made at a maximum price per Offer Share in Danish kroner. If the Offer Price exceeds the maximum price per Offer Share stated in the application form, then no Offer Shares will be allocated to the investor. Where no maximum price per share has been indicated, applications will be deemed to be made at the Offer Price. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. Applications should be made for a number of Offer Shares or for an aggregate amount rounded down to the nearest Danish kroner amount. Only one application will be accepted from each account in VP Securities. For binding orders, the application form must be submitted to the investor’s own account holding bank in complete and executed form in due time to allow the investor’s own account holding bank to process and forward the application to ensure that it is in the possession of Danske Bank A/S, no later than 11 a.m. (CET) on 6 June 2018, or such earlier time at which the Offering is closed. Investors who wish to apply to purchase for amounts of more than DKK 3 million can indicate their interest to one or more of the Managers during the Offer Period. During the Offer Period, such investors can continuously change or withdraw their declarations of interest, but these declarations of interest become binding applications at the end of the Offer Period. Immediately following the determination of the Offer Price, investors will be allocated a number of Offer Shares at the Offer Price within the limits of the investor’s most recently submitted or adjusted declaration of interest. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. | --- 50 | Section E—Offer | | | | --- | --- | --- | | | | In the event that the total amount of shares applied for in the Offering exceeds the number of Offer Shares, reductions will be made as follows: • With respect to applications for amounts of up to and including DKK 3 million, reductions will be made mathematically. • With respect to applications for amounts of more than DKK 3 million, individual allocations will be made. The Joint Global Coordinators will allocate the Offer Shares after agreement upon such allocations with the Selling Shareholders and the Board of Directors. • Up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) will be reserved for Danske Bank A/S to purchase for the purpose of ensuring delivery to the Company pursuant to the LTIP Equity Swap. Following the expiration of the Offer Period, investors will normally receive a statement indicating the number of Offer Shares allocated, if any, and the equivalent value at the Offer Price unless otherwise agreed between the investor and the relevant account holding bank. Payment for and settlement of the Offer Shares are expected to take place on the Settlement Date by way of delivery of Shares against payment in immediately available funds in Danish kroner in book-entry form to investors’ accounts with VP Securities and through the facilities of Euroclear and Clearstream. If the Offering is closed before 6 June 2018, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. For the purpose of delivering Shares to the participants in the Post-IPO LTIP upon vesting of the grant of restricted share units after the first vesting period, the Group has entered into an equity swap allowing the Company, on 15 April 2019, to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) at the Offer Price from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap (the “LTIP Equity Swap”). The number of Shares which may be purchased by the Company from Danske Banks A/S under the LTIP Equity Swap, will be reserved for Danske Bank A/S to purchase in the Offering. The costs related to the LTIP Equity Swap is expected to be approximately DKK 1 million, which will be expensed over the duration of the LTIP Equity Swap. | | E.4 | Material interests in the Offer, including conflicts of interest | Certain members of the Board of Directors as well as the Executive Management and Gustaf Löfberg (Country Manager, Denmark) (the “Key Employee”) will be shareholders, directly or indirectly, in the Company following completion of the IPO Reorganisation or hold economic interests therein and therefore have an interest in the Offering. The Executive Management and the Key Employee will, subject to completion of the Offering, participate in certain share-based incentive programmes and therefore have a direct economic interest in the Offering. | --- 51 | Section E—Offer | | | --- | --- | | | No member of the Board of Directors or Executive Management, directly or indirectly, hold more than 5% of the Company’s share capital except for André Rogaczewski, CEO, and Claus Jørgensen, COO, who will, through their respective holding companies, own 8.5% and 8.5% respectively of the share capital in the Company (assuming an Offer Price at the midpoint of the Offer Price Range), following completion of the IPO Reorganisation, but prior to Admission. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation and will be governed by a shareholders’ agreement. The Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities related to or issued by the Company, its affiliates or other parties involved in or related to the Offering. Certain of the Managers and their respective affiliates have from time to time engaged in, and may in the future engage in, commercial banking, investment banking and financial advisory transactions and services in the ordinary course of their business with the Company or the Selling Shareholders or any of the Company’s or their respective related parties. With respect to certain of these transactions and services, the sharing of information is generally restricted for reasons of confidentiality, internal procedures or applicable rules and regulations. The Managers have received and will receive customary fees and commissions for these transactions and services and may come to have interests that may not be aligned or could potentially conflict with potential investors’ and the Company’s interests. In particular, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates are lenders under the Group’s existing indebtedness. In addition, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates will be a lender under the New Facilities. Furthermore, Danske Bank A/S, Skandinaviska Enskilda Banken AB (publ), Sverige and/or their respective affiliates, have previously received and may in the future receive services provided by the Company. In addition, Danica Pension, Livsforsikringsaktieselskab, one of the Selling Shareholders, is a wholly-owned subsidiary of Danske Bank A/S. In addition, in the ordinary course of business, the Managers and their respective affiliates may make or hold a broad array of investments including serving as counterparties to certain derivative and hedging arrangements and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and | --- 52 | Section E—Offer | | --- | | | | such investment and securities activities may involve securities and/or instruments of the Company. Some of the Managers and/or their respective affiliates may from time to time hold certain direct or indirect minority interests in the Significant Shareholders. The Managers and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. | | E.5 | Selling Shareholders and Lock-Up Arrangements | The Selling Shareholders The Selling Shareholders (comprising the Significant Shareholders, André Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB, Danica Pension, Livsforsikringsaktieselskab, and the MIP Participants and Employee Shareholders) are offering 20,000,000 Offer Shares, excluding any Shares subject to the Overallotment Option. As at the date hereof, the Significant Shareholders own 100% of the Shares. The ownership stakes of each of the Selling Shareholders following (a) the IPO Reorganisation and prior to completion of the Offering and (b) the completion of the Offering, will be as follows: | | Shareholder | Shares owned after the IPO Reorganisation and before completion of the Offering(1) | Shares owned after completion of the Offering(2) | | Number of Shares | % of share capital | Number of Shares | % of share capital | | Significant Shareholders(3) | 22,055,426 | 44.11% | 10,233,252 | 20.47% | | André Rogaczewski Holding ApS(4) | 4,243,478 | 8.49% | 2,546,087 | 5.09% | | Holdingselskabet Claus Jørgensen ApS(4) | 4,243,478 | 8.49% | 2,546,087 | 5.09% | | | | Carsten Gomard Holding ApS | 2,198,948 | 4.40% | 1,319,369 | | NC NorthCo AB | 3,784,471 | 7.57% | 2,270,683 | | Danica Pension, Livsforsikringsaktieselskab | 2,316,221 | 4.63% | 1,389,733 | | MIP Participants and Employee Shareholders | 11,157,978 | 22.32% | 6,694,789 | | New shareholders | — | — | 23,000,000 | | | Total | 50,000,000 | 100% | 50,000,000 | 100% | | | | (1) Assuming an Offer Price at the midpoint of the Offer Price Range. (2) Assuming an Offer Price at the midpoint of the Offer Price Range, the sale of 20,000,000 Shares and full exercise of the Overallotment Option. (3) Assuming no exercise of the Overallotment Option, the Significant Shareholders will own 13,233,252 Shares, corresponding to 26.5% of the Company’s share capital and voting rights after completion of the Offering. (4) The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights of the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their current ownership of the Company following completion of the IPO Reorganisation. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and | --- 53 | Section E—Offer | | | --- | --- | | | Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation. André Rogaczewski and Claus Jørgensen have informed the Company that they expect to enter into a shareholders’ agreement governing their relations as shareholders in the joint holding company and that the shareholders’ agreement will provide that any material decisions by the joint holding company with respect to the Shares, including voting on the Shares and disposals of or creation of other third party rights over the Shares shall be subject to the unanimous decision by André Rogaczewski and Claus Jørgensen. If no unanimous decision can be reached, the shareholders’ agreement provides for an informal dispute resolution panel, which shall have the power to decide on the disputed matter, with binding effects on the parties and no rights of appeal. The Company is not a party to the shareholders’ agreement and does not have any rights and/or obligations under it. Gustaf Löfberg, Country Manager, Denmark, has informed the Company that the Shares held indirectly through his holding company, NC NorthCo AB, will be transferred to a Swedish personal pension and life insurance scheme, a Kapitalförsäkring with Danica Pension Försäkringsaktiebolag, Sweden, in connection with Admission. However, the voting rights as well as any rights to decide on disposals of the Shares previously held by NC NorthCo AB, shall remain with Gustaf Löfberg. **The Significant Shareholders** The Significant Shareholders comprise FSN Capital IV L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, which are limited partnerships organised under the laws of Jersey and FSN Capital IV (B) L.P. organised under the laws of England, each with registered office at 11–15 Seaton Place, St Helier, Jersey, JE4 0QH. FSN Capital IV Netcompany Co-Investment LP is a direct co-investment vehicle for certain of the investors in FSN fund IV. FSN Capital GP IV Limited is acting as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. **MIP Participants and Employee Shareholders** The MIP Participants and Employee Shareholders comprise a group of 81 individuals as at the date hereof, including four members of the Board of Directors, a member of the Executive Management, some of the previous owners of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018), and certain other employees, having invested in the Group, including through the MIP. The MIP Participants and Employee Shareholders have invested in the Group, directly through NC TopCo A/S (the parent company of the Group, prior to the completion of the IPO Reorganisation) and indirectly through NC ShareCo ApS (a direct shareholder in NC TopCo A/S, prior to the completion of the IPO Reorganisation). **Lock-Up Arrangements** The Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab, have agreed with the Managers that they | --- 54 | Section E—Offer | | | --- | --- | | | will not, except as set forth below, for a period of 180 days after Admission, without the prior written consent of the Managers: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce such action), directly or indirectly, any of their Shares, or any securities convertible into or exercisable or exchangeable for such Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Shares, whether any such transactions described in clause (i) or (ii) above are to be settled by delivery of such Shares or such other securities, in cash or otherwise; or (iii) propose any general meeting of the Company, or convene or take action to convene any general meeting for the purpose of proposing, any resolution of the Company authorising the issue of any Shares or warrants to subscribe for Shares. Further, the Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab have agreed with the Managers that they will not publicly announce any intention to enter into any of the transactions mentioned in (i) and (ii). The foregoing shall not apply to: (i) disposal of Shares to their respective related parties, provided that such persons agree to adhere to identical restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) with respect to the Significant Shareholders, the lending of Shares under the Share Lending Agreement; (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of the relevant Selling Shareholder, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such Selling Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the Selling Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; or (viii) sale of subscription rights received in connection with a rights issue. The Company has agreed with the Managers to substantially the same restrictions set forth above for a period of 180 days from Admission subject to certain exemptions. The foregoing shall not apply to (i) Shares issued in connection with IPO Reorganisation, and (ii) the grant of restricted share units and Shares to the Executive Management and employees of the Company and its subsidiaries in accordance with the terms of the Company’s Post-IPO LTIP. In addition, the members of the Board of Directors, Executive Management, the Key Employee and the MIP Participants and Employee Shareholders have, subject to certain exemptions, agreed with the Managers that, for a period of 360 days from Admission of the Shares, they will be subject to substantially the same restrictions as those of the Company and the relevant Selling Shareholders as set forth above. | --- 55 | Section E—Offer | | | --- | --- | | | The exemptions applicable to the Board of Directors, Executive Management and the Key Employee include: (i) the disposal to their respective (a) spouse, (b) child or (c) any legal entity over which they alone (or together with any other of their respective related parties) have a controlling influence, provided that such persons agree to adhere to similar restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) disposal of Shares in connection with the IPO Reorganisation and/or the Post-IPO Reorganisation, including any disposal required to be made for the purpose of implementing, directly or indirectly, the IPO Reorganisation and/or the Post-IPO Reorganisation; (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of an entity controlled by a member of the Board of Directors, the Executive Management, the Key Employee or the MIP Participants and Employee Shareholders, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such obliged Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the obliged Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) disposal occurring after death, permanent disability or interruption in employment for a continuous period of not less than 16 weeks due to disability or illness; (viii) disposal occurring after termination of employment by the Company (or the relevant employer company in the Group) or resignation from the Board of Directors; (ix) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; (x) sale of subscription rights received in connection with a rights issue; (xi) the transfer of Shares to a personal pension scheme; (xii) with respect to persons comprised by the Post-IPO LTIP, the cancellation of restricted share units, in the event that, the employment relationship with the Group, under certain circumstances, is terminated; and (xiii) with respect to certain of the MIP Participants and Employee Shareholders (holding in the aggregate less than 5% of the total outstanding Shares of the Company following completion of the IPO Reorganisation and the Offering) having undertaken to sell their Shares to the Significant Shareholders in the event they are leaving the Group within the first three years after Admission, such sale and transfer to the Significant Shareholders or any transferee appointed by the Significant Shareholders. In addition to the above, each of the Selling Shareholders and the members of the Board of Directors, Executive Management, the Key Employee and MIP Participants and Employee Shareholders shall be entitled to grant security over any Shares held on Admission, subject to the condition that (i) the beneficiary of such security, or (ii) in the event of and enforcement of such security interest, any transferee (whether the beneficiary or a third party) of such shares, shall execute and deliver an adherence to the lock-up undertaking. | --- 56 | Section E—Offer | | | | --- | --- | --- | | | | Further, certain of the MIP Participants and Employee Shareholders have agreed with the Company that, for a period of up to three years from Admission, the Shares they receive as part of the IPO Reorganisation and/or the Post-IPO Reorganisation (which corresponds with all shares in NC TopCo A/S they hold prior to such events) will be subject to certain restrictions and exceptions. Further, these MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders’ material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders’ employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be held by the MIP Participants and Employee Shareholders comprised by this undertaking. | | E.6 | The amount and percentage of immediate dilution resulting from the Offering | Not applicable. No new Shares will be issued in connection with the Offering. | | E.7 | Estimated expenses charged to the investor by the Company or the Selling Shareholders | Not applicable. None of the Company, the Selling Shareholders or the Managers will charge expenses to investors. Investors will have to bear customary transaction and handling fees charged by their account-holding banks. | --- 57 # RISK FACTORS An investment in the Offer Shares involves a high degree of financial risk. You should carefully consider all information in this Offering Circular, including the risks described below, before you decide to buy the Offer Shares. This section addresses both general risks associated with the industry in which the Group operates and the specific risks associated with its business. If any such risks were to materialise, the Group's business, results of operations, financial condition and/or prospects could be materially adversely affected, resulting in a decline in the value of the Offer Shares and a loss of part or all of your investment. Further, this section describes certain risks relating to the Offering and the Offer Shares which could also adversely impact the value of the Offer Shares. The risks and uncertainties discussed below are those that the Group's management currently views as material, but these risks and uncertainties are not the only ones that the Group faces. Additional risks and uncertainties, including risks that are not known to the Group at present or that its management currently deems immaterial, may also arise or become material in the future, which could lead to a decline in the value of the Offer Shares and a loss of part or all of your investment. The following risk factors are not listed in any particular order of priority as to significance or probability. ## Risks Relating to the Group's Business and Operations 1. Any failure in a customer's infrastructure or applications as a result, or alleged result, of the Group's IT services could result in penalties, claims for substantial damages, require corrective measures and/or cause significant reputational harm Many of the Group's engagements involve projects and services that are critical to the operations of its customers' businesses. If errors or defects are discovered, the Group may have to incur significant expenditures to eliminate them and may not be able to successfully correct them in a timely manner or at all. Errors and failures in IT services could result in a loss of, or delay in, market acceptance of such IT services and could damage the Group's reputation. The Group's IT services could contain errors or defects that the Group has not detected and that could materially and adversely affect the performance of the IT services and negatively impact the demand therefor. Despite testing by the Group, errors have occurred and will likely continue to occur in the Group's IT services from time to time. Furthermore, any errors in IT services could result in the need to provide concessions and corrective measures to existing customers in order to maintain their business. Resources committed for such purposes mean they cannot be used elsewhere, which could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, IT services failures could cause system or other failures for customers who may assert warranty and other claims for substantial damages against the Group under the Group's contracts. For example, the Group has contracts with customers in the Public sector segment for the development of IT payments systems designed for the distribution of benefits and pension payments to people in Denmark. If there were to be a failure in such IT payments system, such that benefits due were erroneously calculated and incorrectly distributed, the Group could be held responsible for the customer's loss. The Group may also be required to provide additional hours of IT services without charge in order to cure delivery failures. Any claim brought against the Group, even if unsuccessful, could be expensive to defend and require the expenditure of significant resources and might also materially adversely affect the Group's market reputation. In addition, many of the Group's arrangements with customers include service level agreements ("SLAs"), and failure to deliver on time, or with the quality agreed in the SLA, may lead to warranty claims, additional hours of IT services without charge, penalties, or, ultimately, a partial reduction of the Group's total consideration. Any such defects or errors in the Group's IT services and their delivery could result in the loss of orders or a delay in the receipt of orders and could result in reduced operating revenue, delays in market acceptance, diversion of development resources, product liability claims or increased service and warranty costs, any of which could have a material adverse effect on the Group's business, financial condition and results of operations. The Group attempts to manage by contract its liability for damages arising from negligent acts, errors, mistakes or omissions in rendering its IT services, and typically only accepts liability for financial losses resulting directly from failures of its IT services and typically attempts, where possible, to include provisions that put a limit on its liability. However, there can be no assurance that the Company is able to contractually limit its liability or that any such contractual limitations would be enforceable or will otherwise protect the Group from --- liability for damages. Certain contracts awarded through Public sector tenders provide for liability for more than just direct losses. For both Public and Private sector contracts, certain categories of damages are typically not limited in amount, for example, breaches of confidentiality and data protection obligations, gross negligence, wilful misconduct or infringement of third-party intellectual property rights. In addition, certain contracts contain a right for the customer to claim restitution, i.e., return of all received payments pursuant to the relevant contract, in the event of material unremedied breach of the contract. Any such liability could have a material adverse effect on the Group's business, financial condition and results of operations. ## 2. The Group's ability to attract and retain both IT professionals and customers depends on the Group's reputation in the marketplace. Negative media coverage and public scrutiny may adversely affect the Group's business and the price of the Shares The Group's reputation is a significant factor in the Group's ability to attract and retain both IT professionals and customers. The Group's brand and reputation are important corporate assets that the Group believes help distinguish its IT services from those of its competitors and also contribute to the Group's efforts to recruit and retain talented employees in markets where the Group operates. However, the Group's reputation is potentially susceptible to damage resulting from failure to meet contractual milestones (i.e., its ability to deliver on time, on scope and on budget), critical operational incidents or by actions or statements made by or concerning current and former customers, competitors, vendors, adversaries in legal proceedings, government regulators, current and former employees, as well as members of the investment community and the media. Media coverage and public scrutiny of business practices, policies and actions has increased dramatically over the past several years, particularly through the use of Internet forums, blogs and other social media. Certain of the Group's competitors in the Nordic region have recently been subject to negative press and public comment in connection with delivery failures on certain Public sector contracts. The Group's projects in the Public sector segment are particularly susceptible to public scrutiny and reputational risk. Many of the Group's customers in Denmark are part of the Danish public benefits system and use the Group's solutions directly or indirectly to pay out social benefits to Danish citizens, including unemployment and social welfare benefits and pension payments. Any delay or incorrect calculation or distribution in the payment of such benefits could directly adversely affect a large number of people that may depend on such payments for their livelihood and well-being. Regardless of the Group's actual responsibility in such a scenario, it is likely that public authorities, media and public opinion would be quick to point out the involvement of the Group. In addition, the Group provides other services within the Public sector segment that are unrelated to benefit payments, which are frequently used by a large number of Danish citizens, who are likely to immediately notice and be affected by any failure in such system. For example, the Group's IT services provide the crucial technology behind the Danish national car registration platform Motorregistret ("Motorregistret") (within the Danish Customs and Tax Administration), as well as AULA, a Danish countrywide network that, once fully implemented by 2019, will allow teachers, pupils and parents to communicate online. AULA is expected to have over 2 million daily users, and Motorregistret is used every time ownership of a car is transferred or a new car is purchased in Denmark. The failure of either system, or any similar system provided by the Group which has a large and frequently active user base, could have a material adverse impact on the Group's reputation as a reliable IT services company. Any such reputational damage in connection with the Group's IT services in the Public sector segment is likely to reduce the Group's chances of winning future tenders and may also result in the termination of existing partnerships with Public sector segment customers due to public pressure on such customers. In addition, there is a risk that negative attention concerning the Group and/or its Executive Management, such as related to IT systems failure, cyber attacks or litigation, even if based on rumour or misunderstanding, could adversely affect the Group's business operations more generally. As a public company, the Group expects to be subject to greater media scrutiny and thus any such negative information could have an exacerbated effect. Damage to the Group's reputation could be difficult and time-consuming to repair, and could divert the attention of the Group's Executive Management from the business or make potential or existing customers reluctant to select the Group for new projects, all of which could result in a loss of business or adversely affect the Group's employee recruitment and retention efforts. Any unfavourable publicity may also adversely impact investor confidence in the Group's financial condition and result in divestments of the Shares, which may lead to a decline in the price of the Shares. Such consequences could have a material adverse effect on the Group's business, financial condition and results of operations. 58 --- 59 3. The Group’s success depends upon its management team, highly skilled IT professionals and consultants, its ability to hire, attract, motivate, retain and train such personnel and the Group’s wages are subject to wage inflation The Group’s success to date has depended to a significant extent upon, and the Group’s future success will also depend upon, its ability to attract and retain members of its management team as well as highly qualified IT professionals and consultants. In particular, the Group must attract, train and retain appropriate numbers of talented people with diverse skills, including project managers, IT engineers and other senior technical personnel, in order to serve customer needs and grow the Group’s business. If the Group is unable to do so, its ability to develop new business and effectively lead its current projects could be jeopardised. Insufficient intake of new consultants will make it impossible for the Group to continue to grow, as the vast majority of its revenue is generated from billable hours sold. The Group’s consulting career model resembles a pyramid. IT professionals start as “Consultants” (representing 42% of the total number of the Group’s IT professionals in December 2017), and from there they may be promoted to “Senior Consultant” (34%), “Manager” (18%), “Principal” (4%) and eventually “Partner” (2%). The Group’s strategy for the staffing of projects closely reflects this structure even for larger projects which are broken down into smaller teams, and the Group therefore depends both on retaining skilled senior personnel higher up in the pyramid structure and on consistently hiring new junior personnel. The Group focuses its recruiting efforts on graduates within specific fields of studies of certain universities which it believes have curricula that are particularly suited to prepare students for the requirements of the Group’s business. If the Group’s preferred universities were to change their curricula, have a decrease in the number of students enrolled and/or graduating, or if graduates of such universities were to become less interested in working for the Group for any reason, this could have a material adverse impact on the Group’s ability to attract and retain qualified IT personnel. In addition, to supplement its pool of talent, the Group relies to a certain extent on IT personnel recruited outside of Northern Europe, including personnel based in Poland and, more recently, Vietnam. Certain of the Group’s employees based in Poland may be required to travel to projects in Denmark, Norway or the United Kingdom, depending on staffing needs. Any impediments on the ability of its personnel to travel, including as a consequence of Brexit, could have a material adverse impact on the Group’s ability to staff its projects and, consequently, its ability to meet delivery milestones. Accordingly, the Group must ensure that all personnel, regardless of location, not only possess the requisite skill and experience but also are capable of assimilating into the Group’s culture and fill in as necessary on any given project based on project needs. Competition for senior management in the Group’s industry is intense, and the Group may not be able to retain senior management or attract and retain new senior management in the future. It is also difficult for the Group to find senior management matching the agility and culture of the Group. For example, senior managers of competitors are often used to roles with mostly overhead management and supervisory functions, instead of actively participating in the delivery of IT services in a way the Group’s senior management typically does. The lack of sufficient senior management who can be inserted into any organisations acquired by the Group would make it difficult for the Group to ensure that its methodology is properly implemented and applied throughout the organisation. The Group may also lose benefits expected from acquiring organisations if it fails to retain their senior management or other qualified employees, including the former partners of Hunter Macdonald Ltd who recently joined the Group as part of the acquisition. The Group’s competitors may also actively seek to recruit senior management personnel of the Group and other key employees and may succeed in such efforts. In addition, as part of being a publicly-listed company, some of the Group’s key senior management may no longer be able to devote a significant amount of time to, and therefore may become less involved in, the daily business. The inability to recruit, train or retain new personnel and the loss of a member of the Group’s senior management or other key personnel could have a material adverse effect on the Group’s business, financial condition and results of operations. The Group has experienced wage inflation in all of the markets in which it hires employees as a result of competition for personnel with the special IT skill sets its business requires. The Group expects to continue to experience wage inflation in the future, but it may be higher than expected and the Group may be unable to maintain its margins by passing on higher employee costs to customers through price increases, which could have a material adverse effect on the Group’s business, financial condition and results of operations. --- 60 4. The Group may not be able to protect itself against cyber threats that have the potential to significantly disrupt the Group and its customers' services As a provider of IT solutions, the Group has high exposure to cyber security risk. The Group uses various applications internally to develop solutions for its customers and also accesses clients' networks and production environments which may be subject to cyber threats. The financial and strategic importance of certain of the Group's customers, particularly in the Public sector segment as well as companies with global operations, increases the Group's susceptibility to attacks from cybercriminals and nation-state cyber espionage. Any such cyber-attacks may compromise the confidentiality, integrity and availability of information systems and business data of the Group or its customers. Cyber risks generally fall into three broad categories: (i) systems may be hacked and data locked, and the hackers then demand a ransom to release the data; (ii) hackers attack with the intention to harm or even destroy a company's IT infrastructure with no obvious monetary benefit; or (iii) hackers attack with the intent to obtain sensitive data, such as confidential industrial information, bank details or personal data, in order to gain monetary benefits by selling or misappropriating such data. The scope of cyber-attacks has in the past five years developed such that cyber-attacks now occur on a daily basis. While the vast majority of these attacks do not reach a level of sophistication that could pose a threat to the Group or its customers, the Group may not be able to stop cyber-attacks despite its efforts to continually monitor and assess its security organisation in terms of resources and service offerings. In addition, the Group may not be able to adapt to new threats. An increase in social hacking (for example, unauthorised third parties attempting to gain credentials, access or information through direct personal interaction with the Group's employees) also creates a risk for the Group. Human error by the Group's personnel poses a constant risk and the Group's efforts in awareness training and process improvements are unlikely to remove all risk of potentially negative consequences of human error. There can be no assurance that IT security incidents or breaches will not occur in the future, or that future security incidents, breaches and other issues will not have a material impact on the Group's business or that its procedures will be sufficient to address such future IT security incidents, breaches and other issues. The Group frequently experiences distributed denial-of-service ("DDoS") attacks, which are cyber-attacks where the perpetrator seeks to make a machine or network resource unavailable to its intended users by disrupting services of a host connected to the Internet. The denial-of-service is typically accomplished by flooding the targeted machine or resource with superfluous requests in an attempt to overload systems and prevent some or all legitimate requests from being fulfilled. Despite the Group's forward planning and disaster recovery procedures, the occurrence of any DDoS attacks could lead to interruptions, delays or shutdowns, potentially causing harm to the Group's and its customers' business by making critical data, including personal data, temporarily inaccessible. The Group has committed considerable resources to enhancing the security of its systems and works closely with internet operators to help define and configure filters for malicious traffic on its lines. Such efforts may not be sufficient to defend against DDoS attacks in the future. In addition, the Group's customer contracts, particularly in the Public sector segment, typically require it to comply with certain security obligations, including maintaining network and system security, providing security patching, antivirus and malware detection and prevention services, intrusion detection and prevention as well as ensuring the credentials of the Group's employees who interact with such customers. There can be no assurance that the Group will be able to comply with all of these obligations, which may result in it no longer being able to provide certain services to customers, the termination of particular contracts or liability for the Group. The occurrence of any cyber threats, such as the theft or unauthorised use or publication of the Group's or the Group's customers' confidential information or other proprietary business information as a result of an IT security incident, could expose the Group to liability, adversely affect the Group's competitive position and reputation, and reduce marketplace acceptance of the Group's IT services, whether or not the incident is ultimately determined to be the Group's fault. In particular, with respect to the Group's customers in the Public sector segment, many IT solutions and systems developed and maintained by the Group involve the processing of sensitive personal data. Any theft, unauthorised use or publication of such sensitive data is likely to materially damage the Group's reputation. If the Group's IT systems are compromised resulting in reputational harm or its inability to deliver solutions to customers, this could have a material adverse effect on the Group's business, financial condition and results of operations. See "The Group's ability to attract and retain both IT professionals and customers depends on the Group's reputation in the marketplace. Negative media coverage and public scrutiny may adversely affect the Group's business and the price of the Shares". --- 5. The Group may not be successful at identifying, acquiring or integrating other businesses or technologies As part of its overall growth strategy, the Group seeks to gain market share in Northern Europe and continuously evaluates potential acquisition opportunities in Northern European countries. It is possible that the Group may be unable to identify suitable targets for acquisitions or other strategic partnerships, and therefore may not complete the number and type of acquisitions for which the Group plans. The Group intends to focus only on acquisition targets that it considers to be a good strategic and cultural fit, and such opportunities may be limited. The Group’s expansion opportunities are further limited by its primary focus on European countries with an advanced digitalisation agenda. Even if the Group is able to identify a potential acquisition target, it may not be able to complete the acquisition on commercially reasonable terms and may only discover well into the process, after a substantial amount of time and resources have been expended, that the target is not a suitable strategic or cultural fit. In addition, there can be no assurance that the Group will correctly identify and evaluate potential risk related to acquisition targets during its due diligence exercise prior to any acquisition. Further, if the Group is able to complete an acquisition, it may experience difficulty in assimilating the acquired company’s personnel, operations, technology and software. In addition, the key personnel of the acquired company may decide not to continue to work for the Group. These difficulties could disrupt the Group’s ongoing business, distract its management and employees and increase expenses. If the Group is inefficient or unsuccessful at integrating any acquired businesses into its operations, it may not be able to achieve anticipated rates of growth, synergies, increases in market share, profitability or competitive position in specific markets or services or achieve other anticipated benefits. In November 2016, the Group acquired the Norwegian-based company Mesan AS as an entry platform into the Norwegian market. In October 2017, the Group acquired the UK-based company Hunter Macdonald Ltd as an entry platform into the UK market. While the Group has now completed the integration of Mesan AS and has started integrating Hunter Macdonald Ltd, it likely will take a longer time and require more resources, before Hunter Macdonald Ltd is fully integrated and the Group can begin to realise the full benefits of the acquisition. In addition, in the Public sector segment, the integration of Hunter Macdonald Ltd will require the establishment of a UK onsite development organisation before the Group is able to scale its Public sector offerings in the United Kingdom. If the Group fails to successfully integrate Hunter Macdonald Ltd into the Group this could have a material adverse impact on its entry into, and market share in, the United Kingdom, which could have a material adverse effect on the Group’s business, financial condition and results of operations. The anticipated benefits expected from the Hunter Macdonald Ltd acquisition as well as from other future acquisitions are and will be derived from estimates that are inherently uncertain. Such estimates are and will be based on a number of assumptions made in reliance on information available to the Group and management’s judgments based on such information, including, without limitation, information relating to the business, results of operations or financial conditions of Hunter Macdonald Ltd or other future targets. While the Group has no reason to believe that estimated benefits are unrealistic with respect to Hunter Macdonald Ltd, the underlying assumptions are and will be inherently uncertain and subject to a wide variety of significant business, economic, and competitive factors, risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein. 6. Any inability to manage and sustain the Group’s growth could disrupt its business and reduce its profitability The Group has experienced rapid growth during the periods under review, including expansion through acquisition and significant growth in its employee base and scope of services and the Group has achieved a significant increase in margins. In recent years, the Group has expanded its IT services offerings to include infrastructure services, cloud offerings, mobility offerings and a 24/7 global service desk. In addition, the recent acquisition of Hunter Macdonald Ltd has added IT infrastructure consulting services to the Group’s service offering. As part of the Group’s 2022 strategy, the Group will focus on continuing what has made it successful while also leveraging the momentum from recent contract wins, through continuing to advance the digitalisation agenda, implement its business model and performance culture in acquired companies, enhance its talent pool and expand in Northern Europe. As of the date of this Offering Circular, the Group operates offices in four countries outside of Denmark. In addition, the Group’s integrated business model involves its professionals working at customer sites around the world. The Group’s growth to date has placed, and the Group expects its future growth will place, significant demands on the management team and other resources, and will require the Group to continuously develop and improve its operational, financial and other internal controls. The accuracy of the Group’s financial reporting is dependent on the effectiveness of its internal controls. Internal control over financial reporting has inherent 61 --- limitations, including human error, the possibility that controls could be circumvented or become inadequate because of changed conditions, and fraud. Because of these inherent limitations, internal control over financial reporting might not prevent or detect all misstatements or fraud. If the Group cannot maintain and execute adequate internal control over financial reporting or implement required new or improved controls that provide reasonable assurance of the reliability of the financial reporting and preparation of the Group's financial statements for external use, the Group could suffer harm to its reputation, incur incremental compliance costs, fail to meet its public reporting requirements on a timely basis, be unable to properly report on its business and results of operations, or be required to restate its financial statements. In particular, the Group’s continued growth will increase the challenges involved in: - recruiting, training and retaining technical, finance, legal and management personnel and consultants with the knowledge, skills and experience that the Group’s integrated business model requires; - maintaining high levels of customer satisfaction; - developing and improving the Group’s internal infrastructure, particularly its financial, operational, communications and other internal systems; - managing operating costs and remaining cost effective; - increasing and leveraging automation of the Group’s services; - achieving and maintaining economies of scale; - preserving the Group’s culture, values and performance-focused environment; - effectively managing the Group’s personnel and operations and effectively communicating to its personnel its core values, strategies and goals in line with its integrated business model; - operational and technological infrastructure; - tax structuring and transfer pricing policies; and - regulatory compliance. The challenges and scale increases described above may put pressure on the Group’s organisational and operational IT structure of having IT people leading IT people, as the Group may have to rely on a broader range of personnel such as sales and management personnel. Over the past couple of years, the annual organic growth rate of the Group’s employees has been well above 30%, corresponding to an annual net intake of between 150 and 300 new employees, in addition to a large number of employees added as part of the Group’s acquisitions of Mesan AS and Hunter Macdonald Ltd. The high growth rates and the increased number of larger projects heightens the need for cross-company planning and utilisation. The Group’s ability to maintain and renew existing engagements and obtain new business will depend, in large part, on its ability to attract, train and retain technical personnel with the skills that keep pace with continuing changes in IT, evolving industry standards and changing customer preferences. If new consultants do not progress in skill levels, at a sufficient pace and quality throughout their career stages, then the Group’s ability to staff large and complex projects may be adversely impacted. The Group’s profitability also depends on its ability to effectively utilise personnel with the right mix of skills and experience to support the Group’s projects. The processes and costs associated with recruiting, training and retaining employees places significant demands on the Group’s resources. In addition, the demands of changing technology, evolving standards and changing customer preferences may require the Group to redeploy and retrain the Group’s IT professionals. Any failure to address the increasing complexity of the Group’s organisation may lead to decreased speed and agility in executing the Group’s business, which could demotivate its employees, decrease customer retention and harm its ability to compete, each of which could have a material adverse effect on the Group’s business, financial condition and results of operations. 7. If the Group or its customers do not accurately forecast volumes required for fixed fee contracts or contracts with degressive price models, the total contract value of its contracts could be lower than anticipated, and if the Group’s pricing does not anticipate the cost and complexity of performing its work, the Group’s contracts could be unprofitable The Group offers IT services to its customers under various types of contracts. Depending on the complexity of the IT services being delivered, the pricing mechanisms in the Group’s contracts are variable (where the fees 62 --- are typically based on the Group’s time spent and materials used), fixed, or a mix of both (for example, a contract may provide for a fixed fee for the development stage and then become variable-priced in the maintenance and operations stages). In the Public sector segment, the Group’s split between fixed price contracts and time and material contracts (i.e., variable contracts for which fees are typically based on the Group’s time spent and materials used) based on number of contracts was approximately half for the year ended 31 December 2017. 71% of Public sector segment revenue for the year ended 31 December 2017 was generated from fixed price contracts. The pricing of fixed price contracts is complex and highly dependent on the Group’s internal estimates, predictions and assumptions for the Group’s projects and, in particular, the cost of providing the relevant IT services. These estimates, predictions and assumptions might be based on limited data and could turn out to be inaccurate. If the Group does not accurately estimate the scope of the Group’s costs and timing for completing projects, its fixed price contracts could prove unprofitable for the Group or yield lower profit margins than anticipated. The Group may have limited ability to increase the profitability of a loss-making contract because many fixed price services agreements only allow the customer to cancel for convenience and/or include provisions in the contract reducing the Group’s ability to leverage more cost-effective delivery models. Contracts entered into on a variable price time and materials basis, but subject to caps on fees, purchase price adjustment mechanisms or similar arrangements that constrain the fees the Group can charge but do not limit the Group’s potential costs, are subject to similar risks. In addition, if the Group does not accurately forecast the volumes of time and materials required for time and materials contracts, the total contract value of the Group’s contracts could be lower than anticipated. The Group’s pricing, cost and profit margin estimates for the work that the Group performs under its fixed fee contracts may include anticipated long-term cost savings from transformational and other initiatives that the customer expects to achieve and sustain over the life of the contract. There is a risk that the Group will underprice the Group’s projects, fail to accurately estimate the costs of performing the work or fail to accurately assess the risks associated with potential contracts. For example, in 2015 the Group’s average hourly rate billed to customers was significantly negatively impacted by a single loss-making project which was initiated in 2014, related to the Group’s push to enter into the Danish trade union subsector of the Private sector segment. Any increased or unexpected costs, delays or failures to achieve anticipated cost savings, or unexpected risks that the Group encounters in connection with the performance of its work, including those caused by factors outside the Group’s control, could have a material adverse effect on the Group’s business, financial condition and results of operations. For multi-year operations contracts, the Group commonly uses so-called “degressive price models”, as customers typically expect hardware to be less expensive when it has to be renewed and therefore expect that the service provider will reduce the price for services charged on a “like for like” basis. Under such contracts, the Group commits to price reductions on “like for like services” (i.e., price degressions) over the term of the contract in order to win the business. There is a risk that the cost of running the outsourced business cannot be reduced sufficiently to match the degressive price model, and this is particularly the case in second or third generation outsourcing contracts. There is also a risk that the trend of degressive pricing may in the future increasingly apply to other contract types where the Group’s ability to reduce its costs is limited. Conversely, certain consulting and services frame agreements currently allow for price increases in accordance with general or specific price indexes. There is a risk that the referenced index or price adjustment model will prove insufficient in a market with rapidly increasing wage inflation. Any of these risks related to degressive price models or contracts with price adjustments could, if they materialise, have a material adverse effect on the Group’s business, financial condition and results of operations. 8. Changes in laws and regulations or changed interpretation or enforcement of such laws and regulations may sometimes be unpredictable, which could adversely affect the Group’s business. In particular, changes in Danish tax laws, privacy and data protection regulations and national security regulations, if adopted, could adversely affect the Group’s business The Group is subject to laws and regulations applicable to IT service companies in the jurisdictions in which it operates, including laws and regulations on privacy and data protection, tax, unionisation, labour and employment, competition, and marketing. Changes in laws and regulations applicable to the Group or the introduction of new laws and regulations could increase compliance costs, mandate significant and costly changes to the way the Group implements its IT services and structures its contracts, require additional certifications and threaten its ability to continue to serve certain markets and certain customers. In addition, changes in tax laws, treaties or regulations could impose additional taxes on the provision of the Group’s IT services, resulting in lower profitability. 63 --- Given the ongoing debate in Europe as well as in other countries about offshoring (i.e., the relocation of the production of certain products or the delivery of services to overseas countries), the introduction and consideration of restrictive legislation or regulations aiming to impede, reduce or stop offshoring is possible. If such legislation, or privacy legislation with the same effect on the European market, was adopted, this could adversely affect the Group's business if the Group was to increase its reliance on sourcing resources in Vietnam or other jurisdictions. If enacted, such measures could also broaden existing restrictions on offshoring by governmental bodies, thereby affecting customers in the Group's Public sector segment, and on government contracts with firms that outsource services directly or indirectly. In addition, if such measures were adopted, they could impact the Group's Private sector segment with restrictions such as tax disincentives, fees or penalties, intellectual property transfer restrictions, mandatory government audit requirements and new standards that have the effect of restricting the use of certain business and work visas. In the event that any of these measures become law, the Group's operating revenue and profitability could be adversely affected and its ability to provide IT services to its customers could be impaired, which could have a material adverse effect on the Group's business, financial condition and results of operations. 9. Privacy and data protection compliance breaches or failure to protect confidential information could harm the Group's reputation and expose it to litigation and/or other legal or regulatory actions and/or sanctions The Group is subject to a number of laws relating to privacy and data protection, including the following laws and regulations currently in effect: The Danish Act no. 429 of 31 May 2000 on Processing of Personal Data (Persondataloven), the Norwegian Personal Data Act (Personopplysningsloven), the Polish Data Protection Act (Ustawa o ochronie danych osobowych), the Vietnamese Law on Cyber Information Security (Luât An Toàn Thông Tin Mạng), and the UK Data Protection Act 1998, as well as relevant non-EEA data protection and privacy laws. Such laws and regulations govern the Group's ability to collect, use, process and transfer personal information relating to its customers and their clients, as well as its employees and others. The Group relies upon third party contractors and its own employees to process personal data relevant for the IT services it offers. Therefore, the Group is exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, damaged and/or processed in breach of applicable privacy and data protection laws and regulation. For example, the mechanisms for data export are under judicial scrutiny: the validity of personal data transfers under the European Commission's standard contractual clauses has been challenged in Ireland and questions on the case are currently being referred to the Court of Justice of the European Union. While the Group does not currently export personal data outside the EEA, if the standard contractual clauses are invalidated by the Court of Justice of the European Union, any future data flows to Vietnam and other non-EEA jurisdictions could be disrupted. With effect from 25 May 2018, the Group will also be subject to the EU General Data Protection Regulation (Regulation (EU) 2016/679) (the "GDPR") which will place more onerous obligations on the Group in relation to privacy and data protection compliance. The GDPR intends to harmonise data protection laws across the European Union as it is directly binding and applicable in all EU Member States. The GDPR will re-affirm and strengthen already existing requirements and will require controllers and processors of personal data to, among other things, implement more stringent operational requirements, including, for example, mandatory contractual provisions in data processing agreements, expanded disclosures about how personal data is to be used, increased requirements to comply with requests from individuals and mandatory data breach notification requirements. Fines for non-compliance with the GDPR are expected to rise significantly, including fines of up to 4% of global annual revenue for private companies (as set out in the GDPR) and expectedly up to DKK 16 million for Danish public sector organisations and authorities (subject to the adoption of a new Danish data protection law expected to take effect from 25 May 2018 if adopted in time). In Denmark, it is further expected that damages to be paid in case of infringements or breaches of the GDPR and/or the new Danish data protection law will amount to DKK 25,000 per relevant individual. As such, this could add up to significant sums if infringement and/or breaches relate to a larger group of individuals. In addition, the potential consequences for the Group could be even larger due to the reputational impact of not being able to handle personal data, and especially sensitive personal data, in compliance with the GDPR and other applicable laws, in particular in connection with the Group's large Public sector projects. Furthermore, in accordance with the current draft for a new Danish data protection law, a person (for instance, a member of the board or a partner) who is responsible for a violation of the data protection rules may be subject to imprisonment up to 6 months which also would entail significant reputational damage (as mentioned above, the new Danish data protection law is expected to take effect from 25 May 2018 if adopted in time). The Group has taken steps to prepare for the implementation of the GDPR but there is a risk that such measures may not be deemed sufficient in order to comply with the regulation or regulatory guidance. 64 --- Additionally, the penalties for the Group for any breach of the GDPR is more severe than under the current laws relating to privacy and data protection. The GDPR will replace the current national laws of EU/EEA-countries, which means that the above-mentioned Danish, Norwegian, Polish and UK laws on processing of personal data will to a large extent be replaced by the GDPR and any local legislation that implements it. While the GDPR does allow for certain national derogations, it will generally harmonise the rules for processing of personal data within the EU/EEA. If the Group, or any of the third party service providers on which it relies, fails to store, transmit or otherwise process confidential or personal data of its employees, customers and their clients, whether online or offline, in a secure manner, or if any unauthorised or unlawful loss, disclosure or destruction of confidential or personal data were otherwise to occur, the Group may be subject to claims from third parties relating to the infringement of privacy rights and/or investigative or enforcement action (including criminal proceedings and significant fines) by regulatory jurisdictions in which the Group operates. While the Group strives to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection, it is possible that such requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or the Group's practices. Any perceived or actual failure to comply with data protection laws or to protect confidential or personal data may harm the Group's reputation and credibility, adversely affect revenue, reduce its ability to attract and retain customers, result in litigation or other actions being brought against the Group or cause the imposition of fines, and could have a material adverse effect on the Group's business, financial condition and results of operations. ## 10. The Group and its customers are subject to extensive legislative, industry and business requirements, and the Group or its employees may inadvertently violate certain laws and requirements as a consequence of the Group's rapid growth The markets in which the Group operates are subject to changes in legislation that directly impact it, but the Group may also be indirectly impacted by changes in the legislation governing its customers to the extent its contracts with customers place all or parts of the burden of complying with legislation on the Group. The Group may not be able to timely adjust to all legislative changes, industry or business requirements, which could result in fines or other sanctions and may have a material adverse effect on the Group's business, financial condition and results of operations. The increasing size and scope and diverse nature of the Group's operations raise the possibility that a member of its personnel will engage in unlawful or fraudulent activity, breach the Group's Code of Conduct and its Anti-Bribery and Anti-Corruption Policy, internal policies or contractual obligations, or otherwise expose the Group to unacceptable business risks, despite the Group's significant efforts to train its people and maintain internal controls to prevent such instances. The Group may be unable to monitor subcontractors and enforce its supplier conduct principles, which would increase the risk of failing to meet customer obligations in respect of supply chain management. If the Group does not continue to develop and implement the right processes and tools to manage the Group's enterprise, it will be exposed to heightened operational risks and its ability to achieve its business objectives could be impaired. Any of the above developments could have a material adverse effect on the Group's business, financial condition and results of operations. ## 11. The Group is subject to the risk of reduced customers' IT expenditure levels As an IT services company, the Group is dependent on its customers' continued investments in IT. The Group's customers both within the Private sector and Public sector segments may reduce IT expenditure levels for a variety of reasons, including as part of broader cost-cutting programmes in response to adverse market conditions, as part of implementing strategic objectives, or otherwise. Such reduction in IT expenditure levels may mean fewer IT projects for the Group, smaller scale IT projects and/or increased price pressure on existing or new projects. Economic volatility and uncertainty is particularly challenging because many of the projects the Group undertakes for customers require major investments by them and customers are less willing to make such investment decisions in uncertain economic conditions. Volatile, negative or uncertain economic conditions in the Group's customers' markets, particularly Denmark, have undermined, and could in the future undermine, business confidence and cause customers to reduce or defer their spending on new initiatives and technologies, or may result in customers reducing, delaying or eliminating spending under existing contracts or putting pressure 65 --- on pricing. In addition, international, national or local political volatility could in the future negatively impact the Group and its employees. The Group has offices in Denmark, the United Kingdom, Norway, Poland and Vietnam, and is subject to risks relating to the economic or political conditions of such countries. See “The Group’s international operations are subject to certain risks inherent in doing business internationally” in this section. The Group derives a significant proportion of its revenue from its Public sector segment (52% for the year ended 31 December 2017 and 55% for the three months ended 31 March 2018). As a service provider to Public sector customers, the Group is impacted by financial, budgetary, regulatory or political constraints, or changes in government policy and public spending constraints, which could have a significant impact on the size, scope, timing and duration of contracts and orders placed by them and, therefore, on the level of business which the Group will derive from such customers. A substantial part of the Group’s business is therefore dependent on, and susceptible to, changes in governmental policies, as well as budget priorities and regulatory or political constraints or attitudes, in particular those relating to the provision of public services and the attitude to outsourcing of services and activities to the private sector, any of which could have a significant impact on the number, size, scope, type, timing and duration of contracts, and therefore, on the level of business that the Group may win. Such factors could also result in a suspension, cancellation, termination or non-renewal of existing contracts. Accordingly, the Group is subject to risks and uncertainties associated with periodic changes in governments following national elections, particularly in Denmark, where the Group derives a majority of its revenue. Any such reduced expenditure on IT services by the Group’s customers in the Public sector or Private sector segments could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 12. Transformation into a listed public company will increase the Group’s costs and may disrupt the regular operations of its business and require adjustments of certain policies, procedures and strategies The Group expects to incur additional legal, regulatory, finance, accounting, investor relations and other administrative expenses as a result of having publicly traded Shares. The additional demands associated with being a public company may disrupt regular operations of the Group’s business by diverting the attention of some of the Group’s senior management team members away from revenue-producing activities to management and administrative oversight, adversely affecting the Group’s ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing the Group’s businesses. The Group will have to adjust certain policies and procedures as a consequence of being a publicly traded company to be in line with those of peers which are publicly-traded, and to meet listing requirements and shareholder expectations. For example, in anticipation of becoming a publicly traded company, the Group has increased overall Executive Management remuneration in line with other publicly traded companies. See “Board of Directors, Executive Management and Key Employees—Incentive Programmes”. ## 13. Adverse events affecting the stability and standing of the European Union as a single market may have a negative effect on global economic conditions, financial markets and the Group’s business The Group is headquartered in Denmark and operates principally in Europe. Adverse events affecting European economies, including sovereign debt and economic crises in certain EU member states, and, more recently, the UK referendum to withdraw from the European Union in June 2016 (referred to as “Brexit”), have raised a number of questions regarding the stability and overall standing of the European Union as a single economic and monetary area. Despite measures taken by EU member states and the European Central Bank to alleviate credit risk in light of the sovereign debt crises, concerns persist with respect to the overall stability and suitability of the Euro as a single currency. Moreover, although it is subject to further negotiations until March 2019, the Brexit referendum continues to create significant uncertainty about the post-Brexit relationship between the United Kingdom and the European Union, including whether the United Kingdom will be able to continue to benefit from the European Union’s freedom of movement of persons and services and similar agreements, and the potential divergence of national laws and regulations as the United Kingdom determines which EU laws to replace or replicate. The continued uncertainty during and after the period of negotiation may cause increased volatility and 66 --- potentially have a negative economic impact on the markets, particularly in the European Union. Moreover, Brexit could also raise concerns relating to the future standing of the European Union overall, as other EU member states could similarly consider withdrawal. While change creates opportunities for IT services companies and new and updated IT systems will be required for the UK government following Brexit, prolonged uncertainty may mean that UK Public sector entities are reluctant or unable to commit to IT projects and therefore any potential upside for the Group resulting from Brexit cannot be assured and may be limited. Adverse political developments, or the perception that any of them could occur, have had and are likely to continue to have a material adverse effect on global economic conditions, exchange rates and on the stability of global financial markets, particularly in the European Union. Asset valuations, currency exchange rates and credit ratings may be subject to increased market volatility (see “The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies” for further details on current and potential future effects of fluctuations in currency exchange rates on the Group). If the United Kingdom and the European Union are unable to negotiate acceptable Brexit terms or if other EU member countries, including Denmark, pursue withdrawal, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 14. The markets in which the Group competes are highly competitive, and the Group might not be able to compete effectively The Group operates in a highly competitive and rapidly changing global marketplace and competes with a variety of organisations that offer services similar to those the Group offers. The Group’s current competitors include: - large multinational IT services companies, including the services arms of large global technology providers (hardware, equipment and software), that offer some or all of the services the Group offers; - offshore IT services companies in lower-cost locations, particularly large IT outsourcing companies based in India that offer services similar to some of those of the Group, often at highly competitive hourly rates or contractual terms; - providers of cloud services and solutions that offer IT infrastructure as a service on usage-based terms, commoditising certain basic infrastructure components of services included in the Group’s service offerings; - accounting and management consulting firms that have expanded or are in the process of expanding, including through acquisitions, their IT infrastructure consulting services in areas that compete with the Group; - new disruptive IT services companies approaching the IT services market differently than existing incumbents and other players; - niche service providers and local competitors that compete with the Group in a specific industry segment or service area, including companies that provide new or alternative products, services or delivery models; and - in-house IT departments, that use their own resources, rather than engage an outside firm, to provide the types of services the Group provides. Existing vertically integrated companies that provide hardware, software or equipment and services, or those formed through industry consolidation, may be able to provide a more attractive integrated offering (including services that the Group would otherwise provide), particularly where services are standardised. If buyers of IT services favour using a single integrated provider, such buyers may direct more business to such competitors, and this could have a material adverse effect on the Group’s business, financial condition and results of operations. The number and types of competitors may expand as the Group completes any additional acquisitions. Even if the Group has potential offerings that address marketplace or customer needs, its competitors may be more successful at selling similar services, including to the Group’s own current customers. Competitors may offer more aggressive contractual terms or compete on pricing in a manner that the Group is not willing or able to 67 --- match on a sustained basis in light of its size and financial condition, which may affect its ability to obtain new business. Some of the Group’s competitors are companies that have greater financial, marketing or other resources than the Group has and, therefore, may be better able to compete for new business and skilled professionals. In addition, the Group may face increasing competition from new market entrants that are not currently present or not materially present in the Group’s markets. For example, major India-based outsourcing companies, who generally have a lower wage base than the Group in some areas, may in the future provide comparable services at lower prices, putting the Group under increased pricing pressure, and the Group may not be able to quickly adjust its integrated business model to find other sources of higher margin revenue. If the Group is unable to compete successfully, it could lose market share and customers to competitors, which could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 15. The Group’s results of operations could be negatively affected if it cannot adapt, expand and develop its IT services in response to changes in technology, customer demand, or market developments The market for IT services is characterised by rapid technological change, frequent new product introductions, technology enhancements, increasingly sophisticated customer requirements and evolving industry standards. The Group’s future success depends on its ability to continue to develop, market and implement IT services that are attractive, timely and cost-efficient for its existing and new customers. This requires the Group to continue to anticipate and respond to rapid and ongoing changes in technology, industry developments and IT services offerings in order to serve the evolving needs of its customers. The Group’s growth strategy focuses on responding to these types of changes by continuing to develop the Group’s IT services offerings through innovation, by utilising new technology to meet customer needs, and by having an agile workforce that is easily adaptable to new technologies. If the Group does not continue to adapt, expand and develop its IT services in response to changes in technology or customer demand, the Group’s ability to remain competitive and continue to grow could be negatively affected, which could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, companies in the industries the Group serves sometimes seek to achieve economies of scale and other synergies by combining with or acquiring other companies. If one of the Group’s current clients merges or consolidates with a company that relies on another provider for the IT services the Group offers, the Group may lose work from that client or lose the opportunity to gain additional work if the Group is not successful in generating new opportunities from the merger or consolidation. At any given time in a particular industry or geography, one or a small number of clients could contribute a significant portion of the Group’s revenues, and any decision by such a client to delay, reduce, or eliminate spending on IT services could have a material adverse effect on the Group’s business, financial condition and results of operations in the relevant industry and/or geography. Developments in the industries the Group serves could shift demand to new IT services. If, as a result, customers demand new IT services, the Group may be less competitive in these new areas or need to make significant investments to meet that demand. In addition, the Group operates in an environment in which there currently are, and the Group expects will continue to be, new entrants that may offer new IT services. New IT services offered by competitors or new entrants may make the Group’s offerings less attractive or less competitive, when compared to such alternatives. If the Group fails to keep up with technological changes or to convince customers of the value of its IT services in light of new market conditions, new technologies or new offerings by competitors, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 16. The Group’s success depends on its ability to retain customers and win additional work from existing clients The Group’s contracts generally do not give the Group a right to be the exclusive supplier of IT services to its customers. For example, certain of the Group’s contracts for advisory services relating to digital services are for specific projects or have variable pricing based on time and material spent by the Group and typically permit the customer to terminate the agreement on short notice. The Group’s infrastructure and application management outsourcing services, as well as services contracts with customers in its Public sector segment, are typically contracted for a period ranging from four (sometimes comprised of a two-year fixed term plus a two-year option) to ten years and generally require a longer notice period for termination and include an early termination fee to be paid to the Group; however, this fee might not be sufficient to cover the Group’s costs or make up for profits 68 --- lost upon termination of the contract. The Group sometimes enters into framework agreements, which typically relate to systems development and consulting engagements. Although the Group's framework agreements establish basic negotiated terms and some are even "one vendor contracts" where the full potential spend under the framework agreement is awarded to the Group, the Group's customers often have no financial commitment or minimum spending requirement. Further, a customer could choose not to retain the Group for the additional stages of a project, try to renegotiate the terms of its contract or cancel or delay additional planned work. If long-term customers are replaced by new customers on terms that are less favourable to the Group, or new customers do not become long-term customers, customer churn could have a material adverse effect on the Group's business, financial condition and results of operations. In addition to retaining existing customers, the Group's success also depends in large part on its ability to attract additional work from existing customers. If the Group's customers are not satisfied with the quality of the Group's work or with the types of IT services delivered or otherwise seek to renegotiate their contracts where possible (for example, as part of their internal cost-cutting initiatives), the Group could incur additional costs to address the situation and the profitability of such work might be impaired. During contract renegotiation, customers frequently request that the Group increase the quantity of the services supplied at a discounted price. Additionally, customers may also decline to extend contracts or may direct future business to the Group's competitors. Consequently, the Group's results of operations in subsequent periods could be materially lower than expected, which could have a material adverse effect on the Group's business, financial condition and results of operations. ## 17. The Group's work with Public sector customers exposes the Group to additional risks inherent in the Public sector contracting environment The Group works with Public sector entities in Denmark, the United Kingdom and Norway, which include central, provincial, state and local governmental entities. For the three months ended 31 March 2018, Public sector revenues accounted for 55% of overall Group revenue. Public sector projects differ from commercial contracts in the Private sector in that they are generally subject to Danish, UK and Norwegian public procurement rules which require IT services companies to participate in often lengthy and time consuming tender processes and are subject to re-tender processes at the end of their respective terms. Projects involving Public sector customers carry various risks inherent in the Public sector contracting process. These risks include the following: - terms and conditions of Public sector contracts tend to be more onerous for the Group than commercial contracts in the Private sector and may include, for example, more punitive service level penalties and less advantageous limitations on the Group's liability; - Public sector contracts are to a large extent fixed fee contracts which bear a higher risk of inaccurate scoping and miscalculated pricing. See "If the Group or its customers do not accurately forecast volumes required for fixed fee contracts or contracts with degressive price models, the total contract value of its contracts could be lower than anticipated, and if the Group's pricing does not anticipate the cost and complexity of performing its work, the Group's contracts could be unprofitable"; - certain contracts contain a right for the customer to claim restitution in the event of material unremedied breach of the contract; - terms and conditions of Public sector contracts usually have limited or no room for negotiation with a risk of rejection from the tender if the Group includes reservations that are deemed material; and - Public sector contracts are often subject to more publicity than other contracts. Any negative publicity related to such contracts, regardless of the accuracy of such publicity, may adversely affect the Group's business or reputation. The Group is dependent on its ability to continue to win tendered and re-tendered Public sector contracts over time. In the recent past, the Group has had a strong track record of won tenders and re-tenders. As of 11 May 2018, the Group has won 82% of the total number of the tenders in which it participated (for the period from January 2016 up until 11 May 2018). Many of the contracts for these tenders are based on standard contractual terms defined by the customers, i.e., the state or government agencies, and are therefore, by definition, customer-friendly. If the Group's success rate should decrease significantly, for example due to the Group's competitiveness and pricing (including as a result of aggressive pricing of competitors), an adjustment of the Group's risk appetite in bidding on tenders or for any other reason, the Group's business could be negatively affected. 69 --- If the Group were unable to manage these unique risks associated with Public sector work, this could negatively impact the ability to win Public sector contracts and the Group could lose existing contracts, which could have a material adverse effect on the Group's business, financial condition and results of operations. ## 18. A Public sector customer's decision following a tender won by the Group to award the contract to the Group may be challenged before administrative tribunals and/or courts and it is uncertain whether the Group will be successful in defending against such a challenge EU, Danish, UK and Norwegian public procurement rules governing the process of tenders and re-tenders of Public sector contracts provide, and procurement rules in other jurisdictions in which the Group may in the future make bids on public tenders may provide, for statutory complaint periods during which competing tenderers who lost a tender may challenge the public authority's decision to award a contract to the bidder who won the tender. Such challenges may be based on various grounds, mainly pertaining to the public authority's failure to ensure that the tender procedure complied with both the principles of equal treatment and transparency, such as the claim of the competing tenderer that it was not granted a fair chance of obtaining the contract. Such challenges have been made in the past and may occur in the future in relation to tenders awarded to the Group, which may delay the Group's provision of services under the contract. Further, such challenges would usually be lodged against the public authority, leaving the Group with limited (if any) possibilities for intervening or defending the claim. If the challenge of an award decision is successful, in Denmark the public authority will be obliged to terminate the contract (and certain public contracts provide the public authority with a right of termination in such situations), and in other jurisdictions the consequence may also be that that the Group will lose the contract. If the Group, as a consequence of the challenge of an award decision, loses the contract, this could have a material adverse effect on the Group's business, financial condition and results of operations. ## 19. The Group's insurance coverage may be insufficient Although the Group has product liability insurance coverage and IT consulting insurance coverage, there can be no assurance that any such coverage will continue to be available on reasonable terms, or that it will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. Further, the Group's insurance policies may not adequately limit the Group's exposure to certain types of claims. Maximum coverage under the Group's existing insurance policies is DKK 10 million. Due to the Group's continued growth, it is possible that the level of insurance coverage which was considered sufficient in the past will no longer be sufficient going forward and there is no assurance that the Group will be able to increase its coverage on acceptable terms. The successful assertion of one or more large claims against the Group that exceed any available insurance coverage or changes in the Company's insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements may result in significant reputational harm and could have a material adverse effect on the Group's business, financial condition and results of operations. ## 20. The Group may incur additional costs from its use of subcontractors and may be liable for their mistakes From time to time, the Group uses subcontractors to fill shortages in staffing or to satisfy needs for particular expertise. In addition, the continued use of subcontractors instead of employees is more prevalent in certain markets, such as the United Kingdom, where subcontractors accounted for 70.5% of the Group's workforce in the United Kingdom as of 31 March 2018. The Group is responsible for any errors caused by its sub-contractors in the same way it is for its own employees and there are generally higher costs associated with subcontractors, which could have a material adverse effect on the Group's results if the ratio of subcontractors to employers increases and if large volumes of major projects are assigned to subcontractors. In addition, in the United Kingdom, there are different rules applicable for payroll depending on whether the worker is an employee or a subcontractor. The relevant public authorities, rather than the person providing services, are responsible for determining the applicability of rules regarding payroll. If such rules are determined to be applicable, the Group is responsible for deducting taxes and ensuring pensions for the person providing services. If the Group was required to deduct taxes and ensure pensions for its subcontractors in the United Kingdom, this would result in additional costs to the Group. The Group's ability to offset these costs by reducing payments to such subcontractors may be limited if there is a shortage of subcontractors or other employees to perform the required services. These risks related to the use of subcontractors could, if they materialise, have a material adverse effect on the Group's business, financial condition and results of operations. 70 --- 21. The Group could be subject to liability if its strategic partners, vendors or service providers do not perform their obligations or deliver their project contributions on time or at all The Group’s business at times requires that its IT services incorporate or coordinate with the software, systems or infrastructure platforms of its strategic partners. The Group is also at times required to incorporate or coordinate its IT services with the software, systems or infrastructure platforms of other vendors and service providers that it considers crucial to its development efforts and an important part of its business strategy. For example, the Group uses a UK based company as platform provider for the education system solution AULA, and a Greek company’s platform as component for the Group’s tax platform solution. Some of these strategic partners, vendors, or service providers may also be the Group’s competitors in certain instances. The Group’s ability to serve its customers and deliver and implement its IT services in a timely manner depends on the ability of its strategic partners, vendors, and service providers to perform their obligations and deliver their products and services in a timely manner and in accordance with contractual and project requirements. It also depends upon the Group’s ability to effectively oversee their performance. The Group often relies on third parties, in particular to provide infrastructure outsourcing services, public cloud services, data centre services and certain transition and transformation projects, as well as to provide additional capacity when customer demand or contract sequencing requires it. Changes in the pricing or other terms of the Group’s agreements with its strategic partners, vendors, or service providers, or their failure to implement their services and deliverables in a correct and timely manner, could materially adversely affect the Group’s ability to perform under the contract and subject it to additional costs and liabilities or reputational damage, which could have a material adverse effect on the Group’s business, financial condition and results of operations. The Group is responsible to its customers for the timely and competent delivery and performance of some of its IT services by strategic partners, vendors, and service providers. When possible, the Group seeks to enter into back-to-back contracts with strategic partners, vendors, and service providers to pass on the Group’s risks of liability to customers due to failure by such parties to timely and competently perform their obligations. However, the Group is not always able to enter into such back-to-back contracts, for example with respect to license providers, public cloud providers or to some extent with data centre co-location providers. Such contracts also frequently limit liability to a large extent. Furthermore, even if the Group enters into a back-to-back arrangement, it may not eliminate its liability risk. For example, a service provider’s potential liability for damages or penalties may be capped or otherwise limited at a lower level than the Group’s own caps and limits with the Group’s customers, meaning that it may not be able to recover the full amount of its losses from a service provider (including as a result of the bankruptcy of a service provider) if at all, which could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, the Group depends to some extent on third parties for support services necessary to its business, including software and hardware vendors supporting products supplied to the Group. The failure of any of these third parties to adequately provide such support services could have a material adverse effect on the Group’s business, financial condition and results of operations. 22. The Group’s IT services could infringe upon third-party intellectual property rights and it may lose its ability to utilise the intellectual property of third parties The Group’s IT services, or the IT services of others that the Group offers to its customers by incorporation into the Group’s offerings, could infringe on third-party intellectual property rights. Although the Group is not aware of any material infringement claims, third parties may in the future assert claims against the Group or its customers alleging infringement of patent, copyright, trademark, or other intellectual property rights. Infringement claims could harm the Group’s reputation, result in liability for the Group or prevent it from offering some IT services. In the Group’s customer contracts, it generally agrees to indemnify its customers for certain expenses, costs or liabilities resulting from potential infringement of the intellectual property rights of third parties. The amount of the Group’s liability under these indemnities could be substantial and in many cases unlimited. Any claims that the Group’s IT services infringe the intellectual property rights of third parties, regardless of the merit or resolution of such claims, may result in significant costs in defending and resolving such claims, and may divert the efforts and attention of the Group’s management and technical personnel from its business. In addition, as a result of such intellectual property infringement claims, the Group could be required or otherwise decide that it is appropriate to: - discontinue using, licensing, or offering particular IT services subject to infringement claims; - discontinue using the technology or processes subject to infringement claims; 71 --- - develop other technology not subject to infringement claims, which could be costly or may not be possible; or - obtain future use rights. The occurrence of any of the foregoing could result in unexpected increased expenses or require the Group to recognise an impairment of its assets. In addition, if the Group alters or discontinues offering a particular IT service or solution as a result of an infringement claim, the Group’s operating revenue could be affected. If a claim of infringement were successful against the Group or its customers, an injunction might be ordered against its customers or its own operations, causing further damage. The Group presently licenses intellectual property from various third parties such as Microsoft and Oracle and other owners of proprietary software. The Group also uses software licensed under open source licenses such as Apache, Jenkins, nginx, Tomcat, JBoss, MySql, Drupal and other licenses placing certain obligations on the Group as licensor (e.g., in some instances including a requirement to make the source available to others under the same open source terms). The Group could face claims by third parties claiming ownership of what the Group believes to be open source software or non-compliance with open source licensing terms. Any infringement of such licenses by the Group or its customers, for example by not obtaining the correct number of licences or by exceeding the scope of such licenses, could lead to substantial costs to the Group and have a material adverse effect on the Group’s business, financial condition and results of operations. ## 23. The widespread use of the Group’s Modulus platform by, and the high market share among, trade unions exposes the Group to the risk that competitors develop a platform that unions consider preferable to Modulus As of 23 May 2018, 15 of Denmark’s larger trade unions are customers of the Group using its Modulus platform to manage and process payments to members. The Modulus platform was developed by Tieto Enator (Danmark) and introduced in 2004. The Group acquired all of the shares of Tieto Enator (Danmark) (and subsequently disposed of the parts of the business that were not central to its strategy) and accordingly obtained the IP rights to Modulus. In connection with the implementation of Dagpengereform 2017, a reform of the Danish unemployment benefit system, the Group has significantly updated the Modulus platform to ensure customer compliance with the new requirements. Should a competitor introduce a new alternative platform that the Group’s union customers consider preferable, this could result in the loss of union customers. The economies of scale enjoyed by existing users of the Modulus platform would be lost if certain unions were to leave which could prompt others to leave as well, and thereby have a material adverse effect on the Group’s business, financial condition and results of operations. ## 24. A significant portion of the Group’s revenues depends on a limited number of customers The Group derived approximately 33.3% of its revenue for the year ended 31 December 2017 and approximately 37.8% of its revenue for the three months ended 31 March 2018 from its five largest customers, of which 94.7% were in the Public sector and 6.3% were in the Private sector. The Group believes that these five or the top five customers will generate between 25% and 30% of total Group revenue in 2018 due to expected new agreements and the expected continuation of existing agreements. As a result of this concentration, the Group’s business, results of operations and financial condition are significantly affected by the level of these five customers’ IT spending and their policies (particularly regarding procurement). Such customers may decide to cut costs, including by reducing their IT spending or obtaining better pricing from their service providers, including the Group, or may choose to terminate existing contracts and/or use service providers other than the Group. In addition, the Group has certain contracts under which it provides IT services for fixed terms. Once the contracts expire, the Group may lose a subsequent re-tender and thereby lose a customer. In this case, the Group may be unable to fully offset the loss of business. In addition, if one or several of its largest Public sector customers reduce their IT spending, or if they divert a portion or all of their future IT spending towards the Group’s competitors, or if the Group has to lower its prices to retain such customers, its revenue and profitability could be materially adversely affected. If any of these risks materialise, this could have a material adverse effect on the Group’s business, financial condition and results of operations. 72 --- 25. The Group’s rapid increase in market shares in certain areas may cause its customers, particularly within the Public sector segment, to give more business to the Group’s competitors in order to diversify, and competition regulations or authorities may limit the Group’s ability to grow and may force the Group to alter its business practices The Group’s strong growth in the past five years has resulted in the Group achieving rapid increases in market shares. The larger the Group’s market share in any given market, the higher the risk that certain customers, particularly customers in the Public sector segment, will aim to diversify their selection of IT services companies to avoid the potential adverse negative effects (such as higher prices and potential reputational risk) typically associated with strong market positions. In addition, depending on how a relevant market is defined by the competition authorities in the jurisdictions in which the Group operates, the Group may be found to have a leading competitive position, which could restrict the ability of the Group to make additional expansion efforts, including through acquisitions. If the Group were deemed to have a “dominant position” as defined by applicable competition law in any given market, certain of its business practices may need to be altered or modified in order to comply with applicable regulations, and there can be no assurances that the relevant competition authority will not take action against the Group, or that the Group will successfully implement or carry out any required alterations or modifications to its business practices. An enforcement action by such competition authorities could have a material adverse effect on the Group’s business, financial condition and results of operations. 26. If the Group were unable to bill for its services or collect its receivables, its results of operations and cash flows could be materially adversely affected The Group’s business depends on its ability to successfully and on a timely basis obtain payment from its customers of the amounts they owe to the Group for work performed. Payment terms vary among customers and between Private and Public sector. In recent years, Private sector customers have increasingly extended their payment terms leading, in certain cases, to delayed recoveries by the Group for amounts due. The nature of the Group’s contracts sometimes requires it to commit resources to a project prior to receiving advances, progress or other payments from customers in amounts sufficient to cover expenditures on the project as they are incurred. In 2017, the Group’s days of sales outstanding were 114 (2016: 105; 2015: 87). Delays in customer payments may subject the Group to working capital shortages. If a customer defaults in making payments on a project to which the Group has devoted significant resources or if a project in which it has invested significant resources is delayed, cancelled or does not proceed to completion without the Group being reimbursed accordingly, it could have a material adverse effect on the Group’s revenue and profitability. The Group generally evaluates the financial condition of its new customers and usually bills and seeks to collect on relatively short cycles. The Group might not accurately assess the creditworthiness of its customers or its creditworthiness assessment may become outdated. Macroeconomic conditions could also result in financial difficulties for the Group’s customers, including bankruptcy and insolvency. This could cause customers to delay payments, request modifications to their payment arrangements that could increase the Group’s receivables balance, or cause customers to default on their payment obligations. The Group has established provisions for losses of receivables and unbilled services. Actual losses on customer receivables could differ from those that the Group currently anticipates, and, as a result, the Group might need to adjust its provisions. Timely collection of customer receivables also depends on the Group’s ability to complete its contractual commitments and bill and collect its contracted revenue. If the Group is unable to meet contractual requirements, it might experience delays in collection of and/or be unable to collect its customer balances, and if this occurs, it could have a material adverse effect on the Group’s business, financial condition and results of operations. 27. Any disruption in data centre operations or telecommunications systems failures could harm the Group’s ability to deliver its IT services, damage its reputation or otherwise materially adversely affect its business To serve its customers, the Group must maintain continuous data centre operations, including network, storage and server operations. This includes data communications links among the Group’s data centres, its headquarters and customers’ offices, as well as back-up of data and maintenance of applications. The Group maintains two separate data centres which are located approximately 10 kilometres from its headquarters and 5 kilometres from each other. Both data centres can run independently from each other and contain most data relevant for the Group’s and customers’ businesses. The Group believes that it would be able to continue to operate if one of the two of its data centres was interrupted, damaged or destroyed. However, for some solutions, uninterrupted service to customers in case of a disaster affecting one data centre would only be provided if 73 --- customers ordered such service. Although the Group maintains redundancy facilities in data links and data centres, any significant disruption in operations and any major system failure could nonetheless compromise the Group's ability to deliver its IT services to customers according to its contracts and/or to complete projects for its customers on a timely basis. Any of these circumstances could trigger penalty and/or damages payments by the Group or result in the loss of customers or curtailed operations, which could have a material adverse effect on the Group's business, financial condition and results of operations. The Group's data centres are controlled and managed remotely, mainly from its headquarters. Access to the management system of the data centres is not limited to their physical location and access is also available via virtual private network ("VPN") connection from a Group laptop, for example for service personnel with 24/7 on-call duty from home. The team of employees responsible for the data centres do not work in an area that is physically separated from, or that requires identification or access control to be entered by, other employees. While the remote control of the Group's data centres requires several passwords and security steps to be carried out in order to gain virtual access, there is a risk that the lack of physical separation of the Group's employees may lead to internal or external human attacks on the respective hardware. See also "The Group may not be able to protect itself against cyber threats that have the potential to significantly disrupt the Group and its customers' services". Although the Group carries property and business interruption insurance, its coverage may not be adequate to compensate it for all losses that may occur. No assurance can be given that the Group will not suffer a significant operational disruption in the future, which could have a material adverse effect on the Group's business, financial condition and results of operations. ## 28. The Group's revenue visibility is subject to certain assumptions and estimates and expected revenue may not be realised in full The Group measures revenue visibility on a 12-month basis, based on two main input parameters: (1) total estimated value of committed engagements, which comprise fixed price agreements and service agreements and (2) total estimated value of planned continued engagements, which comprise ongoing time and material engagements which the Group believes have a high likelihood of conversion and/or prolongation. The Public sector segment has a high degree of revenue visibility due to multi-year fixed price tender contracts with a significant share of maintenance and operations revenue. In contrast, Private sector contracts typically have a duration of approximately 12 to 18 months and larger share of time and material engagements reflecting a fundamental difference in the purchasing pattern for Private sector segment customers compared to Public sector segment customers. Private customers tend to renew their contractual engagements with the Group and a higher proportion of revenue will therefore by definition be maintenance-based, which is also different from the dynamics in the Public sector segment. For the year ending 31 December 2018, the Group's revenue visibility on contractual committed engagements is DKK 128 million and DKK 62 million for the Public sector and the Private sector, respectively, and the revenue visibility on planned continued engagements is DKK 447 million and DKK 307 million for the Public sector and the Private sector, respectively. There is a risk that circumstances may change with respect to ongoing engagements between the Group and its customers impacting revenue attribution to planned continued engagements. The calculation of revenue visibility is subject to certain assumptions and estimates. For example, the Group's estimates may assume the achievement of milestones on a timely basis when calculating revenue visibility and missed milestones may therefore dilute the value of a contract as a consequence of liquidated damages or other liabilities, and may also delay revenue to later accounting periods. Furthermore, the Group's estimates also assume certain volumes and certain rates of prolongation under the time and material engagements, which may not materialise. For example, delays may trigger extended cancellation for convenience or cancellation for cause provisions. The Group's estimates of future revenue, and to a lesser extent, future profit margins, are to a significant degree dependent on its revenue visibility. However, revenue visibility as of any date constitutes forward-looking statements which are not guarantees of future financial performance and the Group's actual future revenue could differ materially from that expressed or implied by such forward-looking statements as a result of many factors. When the Group's contracts are terminated or not renewed, or, in the case of framework agreements, work orders are not entered into thereunder, the Group loses the expected revenue, and it may take significant time to replace the level of revenue lost and may not be able to replace the lost revenue, which may affect the Group's revenue visibility. 74 --- If any of the risks arising from the Group’s calculation of revenue visibility materialise, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 29. The Group may face difficulties in delivering complex and large projects to its customers which could result in loss of business and reputational harm The performance of a complex and large project involves many challenges, including correctly scoping the project work and understanding the customers’ needs and their operations appropriately, which depends on a number of factors, including the proficiency of the Group’s professionals and management. The Group’s failure to understand its customers’ requirements, the Group’s delay or failure to deliver IT services that meet the requirements specified by the Group’s customers, or the Group’s failure to meet certain milestones agreed for the delivery of IT services could result in termination of customer contracts, and the Group could be liable to its customers for significant penalties or damages. In certain instances, larger projects may involve multiple engagements or stages, and there is a risk that a customer may choose not to retain the Group for additional stages or may cancel or delay additional planned engagements. These terminations, cancellations or delays may result from factors that have little or nothing to do with the quality of the Group’s IT services, such as the business or financial condition of the Group’s customers or the economy generally. Such cancellations or delays make it difficult to plan for project resource requirements and inaccuracies in such resource planning and allocation may have a negative impact on the Group’s profitability. Smaller projects may have the same devastating reputational impact, since all projects are subject to the same methodology regardless of their size, and even larger projects are effectively divided into smaller bits. If the Group fails to deliver complex and large projects, this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 30. Failure to maintain utilisation levels may have an adverse effect on the Group’s margins A significant percentage of the Group’s operating expenses, particularly employees and rent, are fixed in advance of any particular quarterly period. As a result, unanticipated variations in the number and timing of the Group’s projects (and the timing of payments under the Group’s contracts) or in employee wage levels and utilisation rates may cause significant variations in the Group’s operating results in any particular quarterly period, and could result in losses. Any material reduction in utilisation rates for the Group’s professional staff or variance in the on-site/offshore staffing mix that cannot be offset through lay-offs or reshuffling of employees, an unanticipated termination of a major project, a customer’s decision not to pursue a new project or proceed to succeeding stages of a current project or the completion of several major customer projects during a quarter could result in underutilisation of the Group’s employees. The Group has expanded its operations significantly in recent years through organic growth and strategic acquisitions, which has resulted in a significant increase headcount and fixed overhead costs. If the Group is not able to maintain optimal resource utilisation levels without corresponding cost reductions or price increases, the Group’s ability to sustain its margins would be adversely affected and this could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 31. The Group’s future results may differ materially from what is expressed or implied by the forecast of consolidated financial information and projections of consolidated medium term financial targets included in this Offering Circular, and investors should not place undue reliance on this information The financial projections set forth in this Offering Circular, including under “Operating and Financial Review”, “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” and elsewhere, are the Group’s forecast for the financial year ending 31 December 2018 and projections of consolidated medium term financial targets for the three-year period ending 31 December 2021. The “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” includes financial forecasts and projections that qualify as profit forecasts. For profit forecasts, the Prospectus Regulation requires the Group, among other things, to disclose the principal assumptions on which the Group bases the forecast and to include a report prepared by the Group’s independent auditors on such forecasts and assumptions. The Group’s independent auditors did not make any assessment as to whether the assumptions underlying these financial forecasts and projections are well-founded or whether such financial forecasts and projections are attainable. The Group has prepared its financial forecasts and projections in accordance with the Prospectus Regulation and not in accordance with any other rules or requirements in the United States or elsewhere. These financial forecasts and projections are based upon a number of assumptions 75 --- and estimates, which are subject to significant business, operational, economic and other risks, many of which are outside of the Group's control. Accordingly, such assumptions may prove to be incorrect. In addition, unanticipated events may materially adversely affect the actual results that the Group achieves in future periods whether or not the Group's assumptions relating to the financial year ending 31 December 2018, the financial years ending 31 December 2021 or future periods otherwise prove to be correct. As a result, the Group's actual results may vary materially from these projections and investors should not place undue reliance on them. See also “Special Notice Regarding Forward-Looking Statements”. ## 32. The Group’s consolidated balance sheet includes significant amounts of goodwill and intangible assets in connection with acquisitions and faces the risk of impairment of a significant portion of these assets The Group’s consolidated balance sheet includes goodwill and intangible assets that represented 75.1% of its total assets as at 31 December 2017. These assets consist primarily of goodwill and customer intangible assets associated with the Group’s acquisitions of Mesan AS and Hunter Macdonald Ltd in 2017 as well as the Significant Shareholders’ acquisition of a majority stake in the Group in 2016. The Group also expects to acquire additional organisations in the future, which may result in its recognition of additional goodwill and intangible assets. Under current accounting standards, the Group is required to amortise certain intangible assets over the useful life of the asset, while goodwill and certain other intangible assets are not amortised. On a regular basis, the Group assesses whether there have been impairments in the carrying value of goodwill and certain intangible assets. If the carrying value of the asset is determined to be impaired, then it is written down to fair value by a charge to operating earnings. An impairment of a significant portion of goodwill or intangible assets could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 33. The Group may be unable to obtain financing or guarantee facilities at favourable terms, or at all, or perform payment obligations due to insufficient liquidity The Group may be required to raise new financing or refinance parts of or all of its outstanding debt in the future. The Group’s ability to successfully raise new financing or to refinance its existing debt is dependent on a number of factors including the conditions of the financial markets in general, the Group’s creditworthiness and credit rating, and its capacity to assume more debt at such time. As a result, the Group’s access to financing sources at a particular time may not be available on favourable terms, or at all. Disruptions and uncertainties on the capital and credit markets may also restrict access to the capital required to conduct the Group’s business. Although the Group believes that it has access to adequate financing, it cannot be ruled out that the Group may require additional financing in the future. The Group is also regularly required to source guarantees from banks, insurance companies and other institutions in connection with its contracts as described in “Operating and Financial Review—Financing Arrangements and Commitments”. The Group’s inability to raise additional financing, to refinance its debt obligations on favourable terms, or at all, or to obtain adequate guarantees could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, even if the Group currently has access to long-term financing, it cannot be ruled out that, in the future, the Group could breach its restrictive covenants or other obligations in its credit agreements, which may result from a number of factors both within and outside of the Group’s control. The Group’s inability to comply with the terms of its credit agreements or other financing arrangements could result in its finance providers requiring immediate repayment of all or a portion of the Group’s outstanding debt, which could render the Group insolvent. This in turn could have a material adverse effect on the Group’s business, financial condition and results of operations. ## 34. The Group’s degree of leverage and ability to incur additional indebtedness could have a material adverse effect on its ability to obtain additional financing or make it more vulnerable in the event of a downturn in business or the economy generally The Group has incurred, and may in the future incur, significant amounts of debt. As of 31 March 2018, the Group had Net Interest-Bearing Debt of DKK 1,167.3 million (presented net of capitalised arrangement fees). As of 31 March 2018, and after giving effect to the offering of the Offer Shares by the Company and the application of the net proceeds to the Company from the offering of the Offer Shares, the Group would have had Net Interest-Bearing Debt of DKK 1,167.3 million, comprised of non-current financial indebtedness of DKK 1,167.3 million as set out in “Capitalisation and Indebtedness”. The Group’s organisational documents limit the amount of indebtedness it may incur and provide that Net Interest-Bearing Debt shall at no time be above 3.5 times Adjusted EBITA, with the exemption that the Company’s board of directors (the “Board of Directors”) may waive this threshold for a period of no more than 18 months in connection with a contemplated merger or acquisition. The Group is required to yield a solvency rate of at least 30% observing the aforementioned option of the Board of Directors. 76 --- There are covenants in the Group’s New Facilities Agreement that require the Group to maintain a leverage ratio (calculated as net debt divided by Adjusted EBITA) below 3.50 times, which limits the Group’s ability to incur indebtedness above a certain level. The Group’s degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. The Group may now or in the future have a greater degree of leverage than its regional or international peers, or both. The Group’s degree of leverage could also make it more vulnerable to a downturn in business or the economy generally. The Group could default on its debt service obligations, or, if it becomes more leveraged in the future, the resulting increase in debt service requirements could cause it to default on its obligations, any of which could have a material adverse effect on the Group’s business, financial condition and results of operations. Moreover, any changes that increase the Group’s leverage could be viewed negatively by investors and cause a decline in the price of the Shares. 35. The Group’s New Facilities contain, and its future debt arrangements could contain, covenants that limit the Group’s liquidity and flexibility in obtaining additional financing, in pursuing business acquisitions or other corporate activities or its ability to declare dividends to its shareholders The Group’s New Facilities Agreement contains, and any future borrowing arrangements may contain, covenants and event of default clauses, including cross default provisions, restrictive covenants and performance requirements, including financial covenants that require the Group to maintain a certain leverage ratio, and change of control provisions, which could affect its operational and financial flexibility. The satisfaction of these restrictive covenants and performance requirements could be affected by factors outside of the Group’s control, such as a slowdown in economic activity which could result in a reduction in its operating revenue or profitability. Such restrictions could affect, and in many respects limit or prohibit, among other things, the Group’s ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could further limit the Group’s ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. For a description of the restrictions and principal covenants applicable to the Group’s New Facilities, see “Operating and Financial Review—Financing Arrangements and Commitments—Description of the New Facilities”. There is no assurance that such restrictions will not materially adversely affect the Group’s ability to finance its future operations or capital needs. The Group is also subject to the risk that counterparties to any of the Group’s undrawn credit facilities will not, and/or will become unable to, perform on their obligations. If any of the Group’s counterparties were to default on their obligations under such financial agreements, it could have a material adverse effect on the Group’s business, financial condition and results of operations. 36. The Group depends on protecting its proprietary technology and intellectual property rights, and protective measures may prove costly, time consuming and may not be resolved in the Group’s favour To protect its intellectual property rights and to maintain its competitive advantage, the Group may file suits against parties that it believes are infringing its intellectual property. Any infringement or misuse of the Group’s intellectual property could result in increased costs, loss of operating revenue and damage to its reputation and brand. In addition, intellectual property litigation is expensive and time consuming, could divert management’s attention from the Group’s business and could have a material adverse effect on the Group’s business, financial condition and results of operations. Furthermore, the Group’s intellectual property enforcement efforts may not be successful. In some situations, the Group may have to bring intellectual property suits outside of Denmark or the other countries in which it operates, in which case the Group would be subject to additional risk as to the result of the proceedings, the amount of damages that it could be awarded and/or collect, as well as potential currency risk. Certain jurisdictions may not provide protection for intellectual property comparable to that in the Nordic region, Western Europe or the United States. Infringement of the Group’s intellectual property and engagement in intellectual property enforcement actions could have a material adverse effect on the Group’s business, financial condition and results of operations. In addition, the Group has granted some of its trade union customers, as well as ATP and KOMBIT, certain intellectual property rights comprising the full use rights, and in some cases access to the source code, for the Modulus platform, permitting such customers to continue using the Modulus platform and its source code if their agreement with the Group is terminated. The Group does not own any intellectual property rights with respect to the word “Netcompany”, whether as a brand or trademark. There can be no assurance that the Group will continue being able to use “Netcompany” as the legal name of entities within the Group or for marketing purposes, or that third parties will not start using the 77 --- name for their entities, services or solutions. In particular, there may be certain jurisdictions in which the Group would not be able to operate its business under the name "Netcompany" due to the generic nature of the word. Not being able to operate its business using the name "Netcompany" could have a material adverse effect on the Group's business, financial condition and results of operations. ## 37. The Group may be the subject of litigation, which, if adversely determined, could harm its business, reputation, results of operations, financial condition and prospects The Group may be subject to claims, lawsuits (including class actions and individual lawsuits), government investigations and other proceedings involving intellectual property, data protection, labour and employment, competition, securities, tax, marketing, commercial disputes and other matters. Many of the Group's contracts contain penalty clauses for its failure to timely deliver or meet agreed service levels. Therefore, the Group may face claims as a result of a breach of contract resulting from, for example, failure to deliver (including on time), material defects or negligence in the delivery of a service or solution. An unfavourable outcome on any litigation or arbitration matter could require the Group to pay substantial damages, prevent it from selling certain of its IT services, or in connection with any intellectual property infringement claims, require the Group to pay ongoing royalty payments. The Group's provisions for losses related to pending legal proceedings in the future may not be adequate to cover its ultimate costs in relation to such proceedings and may need to be adjusted as a result of subsequent developments in, or the final outcome of, such legal proceedings. Whether or not the Group will ultimately prevail in future litigation matters, litigation and arbitration are costly and can divert management's attention from the Group's business. In addition, the Group may decide to settle a litigation or arbitration matter, which could cause the Group to incur significant costs. A settlement or an unfavourable outcome on any litigation or arbitration matter could have a material adverse effect on the Group's business, financial condition and results of operations. ## 38. The Group's international operations are subject to certain risks inherent in doing business internationally As of the date of this Offering Circular, the Group operated offices in countries outside Denmark, including the United Kingdom, Norway, Poland and Vietnam. As part of the Group's growth strategy, the Group plans to continue expanding its operations outside these jurisdictions through acquisitions. The Group generally focuses its international expansion strategy on European countries with an advanced digitalisation agenda, such as Northern European countries like Sweden, Finland and the Netherlands. The Group may not be able to compete effectively in such international markets for IT services and the cost of expanding into international markets may be substantially greater than expected. If the Group fails to compete effectively in the new markets it enters, or if the cost of entering new markets is substantially greater than expected, this could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, the Group may be required to reconsider its strategy to invest in its international expansion plans. The Group's international operations increase the Group's exposure to risks inherent in operating in these countries, including supervision of local management, fluctuations in foreign exchange and inflation rates, international hostilities, terrorism, natural disasters, pandemics, infrastructure disruptions and security breaches, which could have a material adverse effect on the Group's business, financial condition and results of operations. International operations are subject to numerous, and sometimes conflicting, legal rules on matters as diverse as import/export controls, trade restrictions, tariffs, taxation, sanctions, government affairs, internal control obligations, data privacy and labour relations, including obtaining work permits for the Group's employees. Violations of these laws or regulations in the conduct of the Group's business could result in fines and/or criminal sanctions, unfavourable publicity, damage to its reputation, restrictions on its ability to process information or do business, allegations by the Group's customers that it has not performed its contractual obligations or other unintended consequences. Due to the varying degrees of development of the legal systems of the countries in which the Group operates, local laws might be insufficient to protect the Group's rights or otherwise limit or restrict its business. The Group's failure to comply with applicable legal and regulatory requirements could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, operating at a customer site could lead the Group to become subject to tax in the jurisdiction of such site. Further, the Group's business continuity and disaster recovery plans for the local systems in the jurisdictions in which the Group is active outside the Nordic region, including the UK, Poland and Vietnam, may not be effective if catastrophic events occur in any of these countries. If any of these circumstances occurs, the Group has a greater risk that the interruptions in communications with its customers and other locations and personnel, and any downtime in important processes the Group 78 --- operates for customers, could have a material adverse effect on the Group’s reputation in the marketplace and its business, financial condition and results of operations (for example, due to penalties under the Group’s contracts with its customers). 39. Some of the Group’s contracts with its customers include change of control provisions which could be triggered by the Offering or a subsequent change of control Some of the contracts entered into by the Group with its customers contain change of control clauses that possibly could be triggered by the Offering or a subsequent change of control. If such a change of control occurs, the contracting party will in some instances be entitled to terminate the contract. Although the Group has no reason to believe that any counterparty will exercise any right to terminate a contract or otherwise trigger any change of control clause due to the Offering, the risk cannot be excluded. The Group has approached certain customers with contracts containing change of control clauses and has obtained their consent to the change of control in connection with the Offering but has elected not to seek consent from all customers with change of control provisions, and there can be no assurance that all customers will give such consent. Early termination of customer contracts may increase costs, decrease the Group’s utilisation levels and reduce the revenue received by the Group, which could have a material adverse effect on the Group’s business, financial condition and results of operations. 40. The Group may lose IT audit certifications, or suffer harm from not being able to obtain new IT audit certifications in a timely manner As an IT services company, some of the Group’s customers require the Group to regularly undertake external audits and obtain the IT audit reports pursuant to International Standard on Assurance Engagements (“ISAE”) 3000 and ISAE 3402. It is possible that the Group’s customers will in the future require the Group to obtain additional IT audit certifications, such as ISO27001. The Group may not be able to obtain such IT audit reports or certifications, or in order to obtain these the Group may need to make significant changes to its operational processes, procedures and policies, which in turn may result in the Group incurring significant expenditure. The Group may also fail to obtain appropriate IT audit reports and certifications in a timely manner, as it may take up to one year, causing the Group to lose existing customers or new tenders in the meantime. Failure to obtain appropriate IT audit certifications could have a material adverse effect on the Group’s business, financial condition and results of operations. 41. The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies The Group reports its operating results in Danish kroner, but a portion of the Group’s operating revenue and expenses are denominated in currencies other than the Danish kroner, including the Norwegian kroner, the Euro, the Pound Sterling, the Polish zloty and the Vietnamese dong. The Danish kroner is currently pegged to the Euro at an exchange rate of 7.46 Danish kroner per Euro and, pursuant to a policy of the Danish Central Bank, fluctuations are allowed only within a +/-2.25% band. In the last twelve months, there has been exchange rate volatility, including in respect of certain of the currencies that are relevant to the Group’s business. The quantitative easing by the European Central Bank, which is expected to continue at least until September 2018, has had a significant effect on the Euro and, as a result of the peg, a similar effect on the Danish kroner. In addition, the Danish Central Bank could, in the future, modify or eliminate its pegging policy with respect to the Euro. Fluctuations in foreign currency exchange rates can have a number of adverse effects on the Group. See “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations—Exchange rates” for more information. Because the Group’s consolidated financial statements are presented in Danish kroner, the Group translates operating revenue and expenses, as well as assets and liabilities, into Danish kroner at exchange rates in effect during or at the end of each reporting period, as required by IFRS. However, the Group’s net currency exposure is regulated in the currency risk policy and as such any open net exposure impacting EBITA by more than a given percentage has to be hedged. The Group’s policy is to hedge its foreign currency exchange rate when the net exposure to any currency given a 10% change in the respective exchange rate against Danish kroner will result in a two percentage point impact on the Adjusted EBITA margin. Accordingly, changes in the value of the Danish kroner against other currencies will affect the Group’s reported operating revenue and expenses and the value of balance sheet items originally denominated in other 79 --- currencies. This can affect the Group's margins as its operating revenue in any one currency is not matched by expenses in the same currency. There is no guarantee that the Group's financial results will not be materially adversely affected by currency exchange rate fluctuations or that any efforts by the Group to engage in currency hedging activities will be effective. As the Group continues to develop its integrated business model, the Group expects that more of its expenses will be incurred in currencies other than those in which the Group bills for the related services. An increase in the value of any foreign currency against the Danish kroner could increase costs for delivery of services at offshore sites by increasing labour and other costs that are denominated in local currency, without any offsetting increase in the amounts payable to the Group under its contracts with customers. If these risks were to materialise, this could have a material adverse effect on the Group's business, financial condition and results of operations. ## 42. Interest rate fluctuations could materially adversely affect the Group's business, results of operations, financial condition and cash flows The Group is exposed to interest rate risk primarily in relation to its long-term borrowings bearing interest at floating interest rates entered into in connection with mergers and acquisitions and has adopted a hedging strategy in relation to such exposure. The Group evaluates the share of interest rate hedging based on an assessment of its total interest rate risk and its strategy to manage interest rate risk, in order to achieve a balance between the desired interest rate expense and interest rate risk. Such interest rate fluctuations could have a material adverse effect on the Group's business, financial condition and results of operations. As of 31 December 2017, the Group had hedged all of its long term interest rates. The Company may, following the Offering, continue to hedge all of its interest rate exposure relating to long-term indebtedness incurred in connection with mergers and acquisitions depending on the exposure such transactions may generate. The use of interest rate derivatives exposes the Group to the risk of losses on its positions, which may not always be offset by corresponding gains on the related physical position, as a result of unanticipated market changes. In addition, the Group could be exposed to market interest rate risk when the interest rate swaps that it entered into in connection with its financing arrangements expire, if the Group requires financing and cannot hedge its interest rate exposure on commercially reasonable terms, or at all. To the extent that the Group does not hedge its exposure to interest rate fluctuations, or to the extent that such hedging is inaccurate or otherwise ineffective, the Group could incur higher than expected interest rate expenses, which could have a material adverse effect on the Group's business, financial condition and results of operations. In addition, the Group will recognise changes in fair value of its derivative positions as a result of changes to market interest rates. Any such change in fair value of derivatives could have a material adverse effect on the Group's business, financial condition and results of operations. ## Risks Relating to the Offering ## 43. Following the Offering, the Significant Shareholders and certain members of the Board of Directors, Executive Management and the Key Employee, will continue to be large shareholders and may control or otherwise influence important actions the Group takes The Significant Shareholders will upon completion of the IPO Reorganisation in connection with pricing and prior to the Admission hold 44.1% of the Shares assuming an Offer Price at the midpoint of the Offer Price Range. Upon the completion of the Offering, the Significant Shareholders will own 10,233,252 Shares, corresponding to 20.5% of the Company's share capital and voting rights, assuming full exercise of the Overallotment Option, and 13,233,252 Shares, corresponding to 26.5% of the Company's share capital and voting rights, assuming no exercise of the Overallotment Option, in each case assuming an Offer Price at the midpoint of the Offer Price Range. In addition, Carsten Gomard, a member of the Board of Directors, André Rogaczewski and Claus Jørgensen (the latter two through their joint holding company) and the Key Employee, will upon completion of the IPO Reorganisation in connection with pricing and prior to the Admission hold, respectively, 4.4%, 17.0% and 7.6% of the Shares assuming an Offer Price at the midpoint of the Offer Price Range. Upon completion of the Offering, Carsten Gomard, André Rogaczewski and Claus Jørgensen (the latter two through their joint holding company) and the Key Employee, will hold respectively 2.6%, 10.2% and 4.5% of the Shares (assuming an Offer Price at the midpoint of the Offer Price Range). Depending on general attendance at, or voting in writing prior to, the general meeting, the Significant Shareholders may hold more than 50% of the voting rights and the share capital represented at the Company's 80 --- general meeting following completion of the Offering and thereby have a controlling influence over decisions requiring a simple majority of the voting rights and the share capital represented at the general meeting, including, among other things, the election and dismissal of the members of the Board of Directors and declarations of dividends. Also, depending on general attendance at, or voting in writing prior to, the general meeting, the Significant Shareholders may also hold two-thirds or more of the voting rights and the share capital represented at the general meeting and thereby have a controlling influence over decisions requiring a two-thirds majority, including the amendment of the Company's articles of association (the "Articles of Association"), an increase or decrease of the share capital, decisions on mergers and demergers etc. For more information regarding the majority requirements at the Company's general meeting, see "Description of the Shares and Share Capital—Resolutions by the General Meetings and Amendments to the Articles of Association". Accordingly, the Significant Shareholders may be able to influence the direction of the Group's operations and other affairs through representation on the Board of Directors. This concentration of share ownership could have the effect of delaying, postponing or preventing a change of control in the Company, and impact mergers, consolidations, acquisitions or other forms of combinations, which may or may not be desired by other shareholders. No assurances can be given that the interests of the Significant Shareholders or the investors who directly or indirectly control the Significant Shareholders will not differ from the interests of other shareholders. The interests of the Significant Shareholders may not be aligned with the interests of minority shareholders with respect to such voting decisions. ## 44. There is limited free float in the Shares The Significant Shareholders' shareholding following the completion of the Offering may affect the demand in the Shares. If the Significant Shareholders continue to hold on to their Shares, this may affect the liquidity of the Shares, impair the ability of investors to sell their Shares at the times or volumes they may wish to do so and increase the volatility of the price of the Shares. In addition, the Significant Shareholders' share ownership may materially adversely affect the trading price of the Shares because investors often perceive disadvantages in owning shares in companies with a significant shareholder. ## 45. The Shares have not previously been publicly traded, and their price may be volatile and fluctuate There is currently no public market for the Shares, and an active and liquid trading market may not develop or be sustained after the Offering. If an active and liquid trading market does not develop or is not sustained, the liquidity and trading price of the Shares could be materially adversely affected and investors may have difficulty selling their Shares. The market price of the Shares may subsequently vary from the Offer Price and may be higher or lower than the price paid by investors. The trading price of the Shares may fluctuate in response to many factors, including extraneous factors beyond the Company's control, which may include, but are not limited to, the following: - results of operations that vary from the expectations of securities analysts and investors; - results of operations that vary from those of the Company's competitors; - changes in expectations as to the Company's future financial performance, including financial estimates and investment recommendations by securities analysts and investors; - technology changes or changes in customers' relationships in the Company's industry; - security breaches related to the Company's systems or those of the Company's customers or competitors; - changes in economic conditions for companies in the Company's industry; - changes in market valuations of, or earnings and other announcements by, companies in the Company's industry; - declines in the market prices of shares generally, particularly those of IT companies; - strategic actions by the Company or the Company's competitors; - announcements by the Company, the Company's competitors or the Company's alliance partners of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; - changes in general economic or market conditions or trends in the Company's industry or the economy as a whole; 81 --- - changes in business or regulatory conditions; - future sales of the Shares or other securities; - investor perceptions of the investment opportunity associated with the Shares relative to other investment alternatives; - the public’s response to press releases or other public announcements by the Company or third parties; - announcements relating to litigation or governmental investigations (including those of competition authorities); - guidance, if any, that the Company provides to the public, any changes in this guidance, or the Company’s failure to meet this guidance; - changes in accounting principles; and - events such as system failures and disruptions, natural disasters, war or acts of terrorism. In addition, Nasdaq Copenhagen or the global securities markets may experience significant price and volume fluctuations, as they have done in recent years, which may have a material adverse effect on the market price of the Shares and create a risk that investors may not be able to sell their Shares at the Offer Price or a higher price. ## 46. Future sales of Shares after the Offering may cause a decline in the market price of the Shares The market price of the Shares could decline as a result of sales by the Company, the Significant Shareholders or the Company’s other shareholders after the Offering or the perception that these sales could occur. These sales also may make it difficult for the Company to issue equity securities in the future at a time and a price that the Company deems appropriate. Following the Offering, the Company, the Selling Shareholders, certain members of the Company’s management and the MIP Participants and Employee Shareholders will be subject to certain contractual lock-up provisions, in each case for a limited period only and subject to important exceptions. After the expiry of the applicable 180-day, 360-day or three year lock-up periods, see “Plan of Distribution—Lock-up Arrangements”, the Company, the Selling Shareholders, certain members of the Executive Management and the MIP Participants and Employee Shareholders could sell their holdings of Shares in whole or in part. In addition, the Company could offer to sell new Shares in public or private transactions. Any such future sales by the Company could dilute the ownership interests of the Company’s then-existing shareholders, and sales by the Company’s existing shareholders or by the Company, or the perception that such sales could occur, could materially adversely affect the trading price of the Shares. ## 47. The issuance of additional Shares in the Company in connection with future acquisitions, any share incentive or share option plan or otherwise may dilute all other shareholdings The Company may seek to raise financing to fund future acquisitions and other growth opportunities, invest in its business, or for general corporate purposes. The Company may, for these and other purposes, such as in connection with share incentive and share option plans, issue additional equity or convertible equity securities. As a result, the Company’s existing shareholders may suffer dilution in their percentage ownership or the price of the Shares may be materially adversely affected. ## 48. The Company may not be able or may decide not to pay dividends at a level anticipated by shareholders on its Shares, which could reduce investors’ return on Shares The Company’s results of operations and financial condition are entirely dependent on the trading performance of the members of the Group. The Company’s ability to pay dividends will depend, among other things, on its financial performance, any restrictions relating to regulatory capital in subsidiaries and the availability of distributable profits and reserves and cash available for this purpose, and such other factors as the Board of Directors may deem relevant as well as other legal and regulatory requirements. As a holding company, the Company’s ability to pay dividends in the future is affected by a number of factors, principally the Company’s ability to receive sufficient dividends from its subsidiaries. The payment of dividends by subsidiaries is, in turn, subject to restrictions, including the existence of sufficient distributable reserves and cash in those subsidiaries as well as certain restrictions in the Company’s debt financing arrangements. These restrictions could limit or prohibit the payment of dividends to the Company by its subsidiaries, which could restrict the Company’s ability to pay dividends to shareholders. The Board of Directors has adopted a dividend policy pursuant to which it intends to use its available financial resources and free cash flow to service the Group’s debt and invest in continued future growth and 82 --- therefore does not expect to pay out dividends in 2018 or 2019, see “Dividends and Dividend Policy”. Consequently, there can be no guarantee that the Group’s revenue, profit and cash flow may support the payment of dividends. The payment of dividends is at the discretion of the Board of Directors and will be subject to, among other things, applicable law, regulations, restrictions, the Company’s financial position, regulatory capital requirements, working capital requirements, finance costs, general economic conditions and other factors that the Board of Directors deems significant from time to time. ## 49. Shareholders in the United States and other non-Danish jurisdictions may not be able to participate in future equity offerings The Articles of Association to be adopted upon Admission provide for preemptive rights to be granted to shareholders, unless such rights are disapplied by a shareholder resolution at a general meeting or the Shares are issued on the basis of an authorisation to the Board of Directors under which the Board of Directors may disapply the preemption rights. See “Description of the Shares and Share Capital—Authorisation to Increase the Share Capital” for a description of the authorisations to increase the share capital which have been granted to the Board of Directors. However, securities laws of certain jurisdictions may restrict the Company’s ability to allow participation by shareholders in future offerings. In particular, shareholders in the United States or in certain other jurisdictions may not be entitled to exercise these rights unless either the rights and the Shares are registered under the U.S. Securities Act, or the rights and the Shares are offered pursuant to an exemption from, or transaction not subject to, the registration requirements of the U.S. Securities Act, or equivalent local securities laws. In such cases, shareholders resident in such non-Danish jurisdictions may experience a dilution of their shareholding, possibly without such dilution being offset by any compensation received in exchange for subscription rights. The Company cannot assure prospective investors that any exemption from such overseas securities law requirements would be available to enable shareholders in the United States or certain other jurisdictions to exercise their preemption rights or, if available, that the Company will utilise any such exemption. ## 50. The Offering may be withdrawn after Admission to trading and official listing of the Shares and until settlement of the Offering As described in “The Offering—Withdrawal of the Offering”, the Underwriting Agreements (as defined herein) contains provisions entitling the Joint Global Coordinators to terminate the Offering (and the arrangements associated with it) after admission of the Shares to trading and official listing on Nasdaq Copenhagen (expected on or around 7 June 2018) and prior to settlement of the Offering by delivery and payment of the Offer Shares (expected on or around 11 June 2018). Such termination rights may only be exercised under certain circumstances, including force majeure and material changes in the financial condition of the Company’s business. Such termination rights will lapse upon settlement of the Offering, currently expected to take place on 11 June 2018, except in respect of the Option Shares. The termination rights of the parties to the Underwriting Agreements will lapse, in respect of the Option Shares, upon settlement of the sale of the Option Shares, if the Overallotment Option is exercised. Nasdaq Copenhagen’s approval of the Admission is subject to such termination rights not having been exercised after pricing and prior to settlement of the Offering (excluding any termination rights in respect of the Overallotment Option). The Underwriting Agreements contain closing conditions which the Company believes are customary for offerings such as the Offering. In addition, the Company and the Selling Shareholders have given customary representations and warranties to the Managers. The completion of the Offering is dependent on compliance with all of the closing conditions set forth in the Underwriting Agreements. If one or more closing conditions are not met, the Managers may, at their discretion, withdraw the Offering. If the Offering is terminated or withdrawn prior to settlement, the Offering and any associated arrangements will lapse, all submitted orders will be automatically cancelled, any monies received in respect of the Offering will be returned to the investors without interest (less any transaction costs) and admission to trading and official listing of the Shares on Nasdaq Copenhagen will be cancelled. Consequently, any trades in the Shares effected on or off the market before settlement of the Offering may subject investors to liability for not being able to deliver the Shares sold, and investors who have sold or acquired Shares on or off the market may incur a loss. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. 83 --- 84 # IMPORTANT NOTICE RELATING TO THE OFFERING CIRCULAR In this Offering Circular, the “Company” refers to Netcompany Group A/S registered under (CVR) no. 39 48 89 14. As of the date of this Offering Circular, the Company does not have any material assets or liabilities and does not conduct any operating activities prior to effectiveness of the IPO Reorganisation. The “Group” refers to (i) NC TopCo A/S or NC TopCo A/S together with its consolidated subsidiaries, as the context may require, for the period prior to completion of the IPO Reorganisation, which is expected to occur in connection with pricing of the Offering and no later than Admission; and (ii) Netcompany Group A/S or Netcompany Group A/S together with its consolidated subsidiaries, as the context may require, for the period thereafter. No representation or warranty, express or implied, is made by Danske Bank A/S, Deutsche Bank AG, London Branch or Morgan Stanley & Co. International plc (together, the “Joint Global Coordinators”), or Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige (the “Joint Bookrunner” and together with the Joint Global Coordinators, the “Managers”) as to the accuracy or completeness of any information contained in this Offering Circular. The information in this Offering Circular is as of the date printed on the front of the cover, unless expressly stated otherwise. The delivery of this Offering Circular at any time does not imply that there has been no change in the Group’s business or affairs since the date hereof or that the information contained herein is correct as of any time subsequent to the date hereof. In the event of any changes to the information in this Offering Circular that may affect the valuation of the Offer Shares during the period from the date of announcement to the first day of trading, such changes will be announced pursuant to the rules of the Danish Executive Order on Prospectuses, inter alia, which governs the publication of prospectus supplements. In connection with the Offering, the Company has prepared three versions of this offering document: (i) a prospectus in English for purposes of the Danish Offering (the “English Language Prospectus”); (ii) an offering circular in English for use in the international private placement outside of Denmark and the United States and Canada (the “International Offering Circular”); and (iii) an offering circular in English in connection with the private placement in the United States and Canada (the “U.S. Offering Circular” and, together with the English Language Prospectus and the International Offering Circular, the “Offering Circular”). The English Language Prospectus has been prepared in compliance with the standards and requirements of Danish law. The English Language Prospectus, the International Offering Circular and the U.S. Offering Circular are equivalent, except that (i) the English Language Prospectus includes a summary in Danish; (ii) the English Language Prospectus includes an application form for the Danish Offering; (iii) the English Language Prospectus and the International Offering Circular contain a report from the Company’s auditors with respect to the Company’s “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” that is required under the Prospectus Regulation and is not included or incorporated by reference in the U.S. Offering Circular; and (iv) the U.S. Offering Circular includes a third-party notification relating to the Company’s “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021”. In the event of any other discrepancy between the International Offering Circular and the English Language Prospectus, the English Language Prospectus shall prevail. The U.S. Offering Circular shall be the prevailing version for any private placement to qualified institutional buyers in the United States as contemplated herein. In making an investment decision, investors must rely on their own assessment of the Company and the terms of this Offering, as described in this Offering Circular, including the merits and risks involved. Any purchase of the Offer Shares should be based on the assessments of the information in the Offering Circular that the investor in question may deem necessary, including the legal basis and consequences of the Offering, and including possible tax consequences that may apply, before deciding whether or not to invest in the Offer Shares. Investors should rely only on the information contained in this Offering Circular, including the risk factors described herein. None of the Selling Shareholders, the Managers or the Company have taken any action or will take any action in any jurisdiction with the exception of Denmark that may result in a public offering of the Offer Shares. No person has been authorised to give any information or make any representation not contained in this Offering Circular and, if given or made, such information or representation must not be relied upon as having been authorised by the Selling Shareholders, the Managers or the Company. Neither the Company, the Selling Shareholders nor the Managers accept any liability for any such information or representation. --- The distribution of this Offering Circular and the offer or sale of the Offer Shares in certain jurisdictions are restricted by law. By purchasing Offer Shares, investors will be deemed to have made certain acknowledgements, representations and agreements as described in this Offering Circular. Prospective investors should be aware that they may be required to bear the financial risks of any such investment for an indefinite period of time. Persons into whose possession this Offering Circular may come are required by the Selling Shareholders, the Managers and the Company to inform themselves about and to observe such restrictions. This Offering Circular may not be used for, or in connection with, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which such offer or solicitation is not authorised or is unlawful. For further information with regard to restrictions on offers and sales of the Offer Shares and the distribution of this Offering Circular, see "Selling Restrictions". This Offering Circular does not constitute an offer to sell or a solicitation of an offer to buy any of the Offer Shares in any jurisdiction to any person to whom it would be unlawful to make such an offer. This Offering Circular may not be forwarded, reproduced or in any other way redistributed by anyone but the Managers and the Company. Investors may not reproduce or distribute this Offering Circular, in whole or in part, and investors may not disclose the content of this Offering Circular or use any information herein for any purpose other than considering the purchase of Offer Shares. Investors agree to the foregoing by accepting delivery of this Offering Circular. The Managers are acting for the Selling Shareholders and the Company and no one else in relation to the Offering and admission to trading and official listing of the Shares on Nasdaq Copenhagen. The Managers will not be responsible to anyone other than the Selling Shareholders and the Company for providing the protections afforded to clients of the Managers, or for providing advice in relation to the Offering and admission to trading and official listing of the Shares on Nasdaq Copenhagen. ## Stabilisation IN CONNECTION WITH THE OFFERING, DANSKE BANK A/S, AS THE STABILISING MANAGER, OR ITS AGENTS, ON BEHALF OF THE MANAGERS, MAY ENGAGE IN TRANSACTIONS THAT STABILISE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SHARES FOR UP TO 30 DAYS FROM THE COMMENCEMENT OF TRADING OF THE SHARES ON NASDAQ COPENHAGEN. SPECIFICALLY, THE MANAGERS MAY OVERALLOT OFFER SHARES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SHARES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. THE STABILISING MANAGER AND ITS AGENTS ARE NOT REQUIRED TO ENGAGE IN ANY OF THESE ACTIVITIES AND, AS SUCH, THERE IS NO ASSURANCE THAT THESE ACTIVITIES WILL BE UNDERTAKEN; IF UNDERTAKEN, THE STABILISING MANAGER OR ITS AGENTS MAY END ANY OF THESE ACTIVITIES AT ANY TIME AND THEY MUST BE BROUGHT TO AN END AT THE END OF THE 30-DAY PERIOD MENTIONED ABOVE. SAVE AS REQUIRED BY LAW OR REGULATION, THE STABILISING MANAGER DOES NOT INTEND TO DISCLOSE THE EXTENT OF ANY STABILISATION TRANSACTIONS UNDER THE OFFERING. SEE "PLAN OF DISTRIBUTION". 85 --- SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS Certain statements in this Offering Circular constitute forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and the Group's anticipated or planned financial and operational performance. The words "targets", "believes", "expects", "aims", "intends", "plans", "seeks", "will", "may", "might", "anticipates", "would", "could", "should", "continues", "estimates" or similar expressions or the negatives thereof, identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements appear in a number of places in this Offering Circular, including, without limitation, under the headings "Summary", "Risk Factors", "Dividends and Dividend Policy", "Business" and "Operating and Financial Review", and include, among other things, statements addressing matters such as: - The Group's future results of operations, including in particular, any statements relating to the Group's forecast of consolidated financial information and projections of consolidated medium term financial targets; - the Group's working capital, cash flow and capital expenditure; - the Group's dividend policy; - the Group's business strategy, plans and objectives for future services, investments, operations and events; - the benefits, growth and profitability expected to be achieved from acquired companies; - the Group's revenue visibility; - the number and size of contracts announced in future tenders; - the impact of regulations on the Group and its operations; - general economic trends and trends in the Group's industry, including the expectations as to developments of digitalisation and future growth in demand for IT services; and - the competitive environment in which the Group operates. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Group's actual results, performance, achievements or industry results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: - failure of the Group's IT services or disruption in data centre operations or telecommunications systems; - the Group's ability to hire, attract, motivate, retain and train its management team, highly skilled IT professionals and consultants; - economic, political and cyber security risk; - risks of generally reduced IT expenditure levels, including changes in government policy and public spending constraints; - risks associated with the identification, acquisition or integration of other businesses or technologies; - the Group's ability to manage and sustain its own growth and change; - failure of the Group to accurately forecast volumes required for fixed fee contracts; - changes in laws and regulation in the jurisdictions in which the Group operates; - risks related to data privacy concerns and privacy regulations and requirements; - the Group's ability to keep pace with changes in technology, customer demand and market developments; - the Group's dependence on its strategic partners, vendors or service providers to provide certain services and licenses; - risks relating to intellectual property rights; - the Group's ability to deliver complex and large projects; 86 --- - the Group’s ability to maintain utilisation levels; - fluctuations in foreign currency exchange rates; and - other factors referenced in this Offering Circular. Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be incorrect, the Group’s actual financial condition, cash flows or results of operations could differ materially from what is described herein as anticipated, believed, estimated or expected. The Group urges investors to read the sections of this Offering Circular entitled “Risk Factors”, “Business”, “Operating and Financial Review” and “Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021” for a more complete discussion of the factors that could affect the Group’s future performance and the industry in which the Group operates. The Group does not intend, and does not assume any obligation, to update any forward-looking statements contained herein, except as may be required by law or the rules of Nasdaq Copenhagen. All subsequent written and oral forward-looking statements attributable to the Group or to persons acting on the Group’s behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Offering Circular. 87 --- 88 # ENFORCEMENT OF CIVIL LIABILITIES AND SERVICE OF PROCESS The Company is organised under the laws of Denmark, almost all of the Company's directors and executive officers reside in countries other than the United States, and a majority of the Group's assets are located outside of the United States. Also, the Selling Shareholders are organised under the laws of Denmark, Jersey, England and Sweden and all the directors and executive officers of the Selling Shareholders reside in countries other than the United States, and the assets of the Selling Shareholders are primarily located outside of the United States. As a result, it may not be possible for investors to effect service of process upon the Company, the Selling Shareholders or such directors and officers or to enforce against any of the aforementioned parties a judgement obtained in a United States court. Original actions, or actions for the enforcement of judgements of United States courts, relating to the civil liability provisions of the federal or state securities laws of the United States are not directly enforceable in Denmark, Jersey, England or in Sweden. The United States and Denmark do not have a treaty providing for reciprocal recognition and enforcement of judgements, other than arbitration awards, in civil and commercial matters. Accordingly, a final judgement for the payment of money rendered by a United States court based on civil liability will not be directly enforceable in Denmark. However, if the party in whose favour such final judgement is rendered brings a new lawsuit in a competent court in Denmark, that party may submit to the Danish court the final judgement that has been rendered in the United States. A judgement by a federal or state court in the United States against the Company will neither be recognised nor enforced by a Danish court, but such judgement may serve as evidence in a similar action in a Danish court. The United States and Jersey and the United States and England currently do not have treaties providing for reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. A final and conclusive judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon U.S. federal securities laws, would not automatically be recognized or enforceable in Jersey or in England. However, such U.S. judgment could be enforced subject to compliance with Jersey or English procedures and provided that all Jersey law or English law requirements for enforcement of foreign court awards are complied with. The United States and Sweden do not have a treaty providing for reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Accordingly, a final judgment for the payment of money rendered by a United States court based on civil liability will not be directly enforceable in Sweden. However, if the party in whose favour such final judgment is rendered brings a new lawsuit in a competent court in Sweden, that party may submit to the Swedish court the final judgment that has been rendered in the United States. A judgment by a federal or state court in the United States against us or the Selling Shareholders will neither be recognised nor enforced by a Swedish court, but such judgment may serve as evidence in a similar action in a Swedish court. --- PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION The Company was incorporated on 16 April 2018 for the purpose of acquiring NC TopCo A/S (the ultimate parent holding company of the Group prior to the effectiveness of the IPO Reorganisation) in connection with the IPO Reorganisation. The Company does not have any material assets or liabilities and will not conduct (and as of the date of this Offering Circular has not conducted) any operating activities prior to the effectiveness of the IPO Reorganisation. NC Topco A/S, in turn, became the parent holding company of the Group in connection with the Significant Shareholders' acquisition of a majority stake in the Group on 1 February 2016. See "Reorganisation" for further details and a group chart showing the Group structure before and after completion of the IPO Reorganisation. As the Company and its subsidiaries have not constituted a separate legal group for the historical periods presented, no consolidated financial statements are available with respect to the Company and its subsidiaries for the entire reporting period. For purposes of this Offering Circular, however, combined financial statements of the Group have been prepared for the reporting period covering the years ended 31 December 2017, 2016 and 2015 in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union. Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018) and Mesan AS (renamed to Netcompany Norway AS in March 2018), which were acquired during the periods under review, were consolidated into the Group's financial statements as of 25 October 2017 and 22 November 2016, respectively. As such, this Offering Circular includes the following financial information, which has been prepared in accordance with IFRS, as adopted by the European Union: - the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015 (the "Combined Financial Statements"), which have been audited by the Group's independent auditors, Deloitte, as stated in their report appearing therein; and - the unaudited condensed consolidated interim financial statements of the Group as of and for the three months ended 31 March 2018 and 2017 (the "Condensed Consolidated Interim Financial Statements"), which have been reviewed by the Group's independent auditors, Deloitte, as stated in their report appearing therein. The functional currency of each entity within the Group is translated into Danish kroner. Financial information that has previously been published for any financial year can differ from subsequently published financial information due to the retrospective implementation of changes in accounting policies and other retrospective adjustments made in accordance with IFRS, as adopted by the European Union. ## Non-IFRS Financial Measures The non-IFRS financial measures presented herein are not measures of financial performance under IFRS, as adopted by the European Union, but measures used by management to monitor the underlying performance of the Group and the Company. Further, they may not be indicative of historical operating results, nor are such measures meant to be predictive of future results. The Company has presented these non-IFRS measures in this Offering Circular because it considers them an important supplemental measure of its performance and believes that they are widely used by investors in comparing performance between companies. However, not all companies may calculate the non-IFRS financial measures in the same manner or on a consistent basis, and, as a result, the presentation thereof may not be comparable to measures used by other companies under the same or similar names. Accordingly, undue reliance should not be placed on the non-IFRS financial measures contained in this Offering Circular and they should not be considered as a substitute for revenue, EBIT, cash and cash equivalents or other financial measures computed in accordance with IFRS, as adopted by the European Union. The following financial measures included in this Offering Circular are not measures of financial performance or liquidity under IFRS, as adopted by the European Union: ## Organic revenue/organic revenue growth Organic revenue, as calculated by the Group, represents revenue from any entity that the Group has owned for the preceding 12 month period and where the revenue from that entity has been fully consolidated in the 89 --- Group's results over the full 12 month period. Organic revenue is calculated in local currencies excluding any impact from currency exchange rate fluctuations. Organic revenue growth, as calculated by the Group, represents the percentage change in the Group's organic revenue as compared to total revenue from the prior period to the current period. In order to calculate organic revenue growth (i) for the three years ended 31 December 2017, 2016 and 2015, the Group applies a constant currency adjustment based on the average exchange rates for the prior year¹ and (ii) for the three months ended 31 March 2018 and 2017, the Group applies a constant currency adjustment based on the average exchange rates for the three months ended 31 March for the prior year.² ## EBITA Earnings before interest, taxes and amortisation ("EBITA"), as calculated by the Group, represents revenue minus cost of services, sales and marketing costs, administrative costs and special items. ## EBITA margin EBITA margin, as calculated by the Group, represents EBITA divided by revenue. ## Adjusted EBITA Adjusted EBITA, as calculated by the Group, represents EBITA excluding acquisition-related costs, transaction costs and Offering-related costs, which are non-recurring in nature. ## Adjusted EBITA margin Adjusted EBITA margin, as calculated by the Group, represents Adjusted EBITA divided by revenue. ## Utilisation Utilisation, as calculated by the Group, represents the percentage of a standard working hour that a consultant spends on customer-related work, based on an average work week of 40 hours per full time employee ("FTE") in all geographies other than Norway, where the calculation is based on an average work week of 37.5 hours per FTE. ## Customer-facing FTEs and total FTEs Customer-facing FTEs, as measured by the Group, are those employees and freelancers whose role involves direct customer interaction and engagement. Total FTEs, as measured by the Group, includes all FTEs of the Group including long-term subcontractors in the UK and freelancers in Denmark and Norway. ## Revenue visibility Revenue visibility, as measured by the Group, is calculated on a 12-month basis based on two main input parameters: (1) the total estimated value of contractually committed engagements, which comprise fixed price agreements and service agreements and (2) total estimated value of planned continued engagements, which comprise ongoing time and material engagements which the Group believes have a high likelihood of conversion and/or prolongation. For a reconciliation of the non-IFRS financial measures presented in this Offering Circular to the nearest IFRS measures, please see "Operating and Financial Review—non-IFRS financial measures and other key performance indicators". ¹ Average exchange rates during the year ended 31 December 2017 were DKK 79.60 and DKK 839.02 per 100 units of NOK and GBP, respectively. Average exchange rates during the year ended 31 December 2016 were DKK 82.41 per 100 units of NOK. ² Average exchange rates during the three months ended 31 March 2018 were DKK 77.02 and DKK 841.02 per 100 units of NOK and GBP, respectively. Average exchange rates during the three months ended 31 March 2017 were DKK 82.78 per 100 units of NOK. 90 --- Constant currency basis With respect to year-on-year comparisons of certain income statement line items, the Group presents certain data on a constant currency basis, which excludes the effects of changes in currency variation from the Group’s reported results under IFRS, as adopted by the European Union. Constant exchange rates for the years ended 31 December 2017, 2016 and 2015 are determined by using the average exchange rates during 2017 and constant exchange rates for the three months ended 31 March 2018 and 2017 are determined by using the average exchange rates during the first quarter of 2018. The Group believes that this measure facilitates an understanding of the underlying economic performance of its operations. Rounding Adjustments Rounding adjustments have been made in calculating some of the financial information included in this Offering Circular. As a result, figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them. Trademarks The Group owns or has rights to certain trademarks, trade names or service marks that it uses in connection with the operation of its business. The Group asserts, to the fullest extent under applicable law, its rights to its trademarks, trade names and service marks. Each trademark, trade name or service mark of any other company appearing in this Offering Circular belongs to its holder. Solely for convenience, the trademarks, trade names and copyrights referred to in this Offering Circular are listed without the ©, ® or ™ symbols. Presentation of Compound Annual Growth Rate The compound annual growth rates (“CAGR”) presented in this Offering Circular represent the CAGR between stated dates or for a period. 91 --- FOREIGN CURRENCY PRESENTATION The Company publishes its financial information in Danish kroner. Unless the Company notes otherwise, all amounts in this Offering Circular are expressed in Danish kroner. As used herein, references to (i) "Danish kroner" or "DKK" are to the Danish kroner, the lawful currency of Denmark; (ii) "euro", "EUR" or "€" are to the euro, the lawful currency of the participating member states in the Third Stage of the European and Monetary Union of the Treaty Establishing the European Community; (iii) "U.S. dollar" or "$" are to the United States dollar, the lawful currency of the United States; (iv) "British pound sterling", "GBP" or "£" are to the British pound sterling, the lawful currency of the United Kingdom; (v) "Norwegian kroner" or "NOK" are to the Norwegian kroner, the lawful currency of Norway; (vi) "Polish zloty" or "PLN" are to the Polish zloty, the lawful currency of Poland; and (vii) "Vietnamese dong" or "VND" are to the Vietnamese dong, the lawful currency of Vietnam. ## Exchange Rates ### Exchange Rates DKK/EUR The following table sets forth, for the periods and dates indicated, the average, high, low and period-end euro buying rates expressed in Danish kroner per one euro, such data having been provided by Danmarks Nationalbank (the "Danish Central Bank"). The Danish Central Bank fixes exchange rates on the basis of information obtained from a number of central banks on a daily conference call hosted by the European Central Bank at 2:15 p.m. (CET). The average rates for each calendar year represent the average of the euro buying rates on the last business day of each month for such calendar year, and the average rates for each month represent the daily average of the euro buying rates for such month. The exchange rate of Danish kroner per euro is regulated by the exchange rate mechanism, a system originally established in 1979 for controlling exchange rates within the monetary system of the EU. Under this system, Denmark sets its central exchange rate to 7.46 Danish kroner per euro and allows fluctuations of the exchange rate within a 2.25% band. This means that the exchange rate can fluctuate from a high of DKK 7.63 per €1.00 to a low of DKK 7.29 per €1.00. If the market-determined floating exchange rate rises above or falls below the band, the Danish Central Bank must intervene. | Calendar Year | Reference Rates of Danish kroner per €1.00 | | | | | --- | --- | --- | --- | --- | | | Average | High | Low | Period End | | 2015 | 7.46 | 7.47 | 7.43 | 7.46 | | 2016 | 7.45 | 7.46 | 7.43 | 7.43 | | 2017 | 7.44 | 7.45 | 7.43 | 7.44 | | 2018 (through 9 May 2018) | 7.45 | 7.45 | 7.44 | 7.45 | | Month | | | | | | January through March 2018 | 7.45 | 7.45 | 7.44 | 7.45 | | April 2018 | 7.45 | 7.45 | 7.44 | 7.45 | | May (through 9 May 2018) | 7.45 | 7.45 | 7.45 | 7.45 | ### Exchange Rates DKK/NOK The following table sets forth, for the periods and dates indicated, the average, high, low and period-end Norwegian kroner buying rates expressed in Danish kroner per Norwegian kroner, such data having been provided by the Danish Central Bank. The average rates for each period represent the daily average of the NOK buying rates for such period. | Calendar Year | Reference Rates of Danish kroner per NOK 1.00 | | | | | --- | --- | --- | --- | --- | | | Average | High | Low | Period End | | 2015 | 0.83 | 0.90 | 0.78 | 0.78 | | 2016 | 0.80 | 0.83 | 0.77 | 0.82 | | 2017 | 0.80 | 0.84 | 0.75 | 0.76 | | 2018 (through 9 May 2018) | 0.77 | 0.79 | 0.76 | 0.78 | | Month | | | | | | January through March 2018 | 0.77 | 0.79 | 0.76 | 0.77 | | April 2018 | 0.77 | 0.78 | 0.77 | 0.77 | | May (through 9 May 2018) | 0.77 | 0.78 | 0.77 | 0.78 | --- 93 # Exchange Rates DKK/GBP The following table sets forth, for the periods and dates indicated, the average, high, low and period-end British pound sterling buying rates expressed in Danish kroner per British pound sterling, such data having been provided by the Danish Central Bank. The average rates for each period represent the daily average of the GBP buying rates for such period. | Calendar Year | Reference Rates of Danish kroner per GBP 1.00 | | | | | --- | --- | --- | --- | --- | | | Average | High | Low | Period End | | 2015 | 10.28 | 10.72 | 9.49 | 10.11 | | 2016 | 9.11 | 10.19 | 8.22 | 8.68 | | 2017 | 8.49 | 8.92 | 8.00 | 8.39 | | 2018 (through 9 May 2018) | 8.46 | 8.63 | 8.32 | 8.52 | | Month | | | | | | January through March 2018 | 8.43 | 8.55 | 8.32 | 8.51 | | April 2018 | 8.54 | 8.63 | 8.47 | 8.47 | | May (through 9 May 2018) | 8.47 | 8.52 | 8.44 | 8.52 | # Exchange Rates DKK/PLN The following table sets forth, for the periods and dates indicated, the average, high, low and period-end Polish zloty buying rates expressed in Danish kroner per Polish zloty, such data having been provided by the Danish Central Bank. The average rates for each period represent the daily average of the PLN buying rates for such period. | Calendar Year | Reference Rates of Danish kroner per PLN 1.00 | | | | | --- | --- | --- | --- | --- | | | Average | High | Low | Period End | | 2015 | 1.78 | 1.88 | 1.71 | 1.76 | | 2016 | 1.71 | 1.76 | 1.65 | 1.69 | | 2017 | 1.75 | 1.78 | 1.69 | 1.78 | | 2018 (through 9 May 2018) | 1.78 | 1.80 | 1.74 | 1.75 | | Month | | | | | | January through March 2018 | 1.78 | 1.80 | 1.76 | 1.77 | | April 2018 | 1.78 | 1.79 | 1.76 | 1.76 | | May (through 9 May 2018) | 1.75 | 1.75 | 1.74 | 1.75 | # Exchange Rates DKK/VND The following table sets forth, for the periods and dates indicated, the average, high, low and period-end Vietnamese dong buying rates expressed in Danish kroner per 1,000 Vietnamese dong, such data having been sourced from the Bloomberg Composite Rate. The average rates for each period represent the daily average of the PLN buying rates for such period. | Calendar Year | Reference Rates of Danish kroner per VND 1,000 | | | | | --- | --- | --- | --- | --- | | | Average | High | Low | Period End | | 2015 | 0.31 | 0.33 | 0.29 | 0.31 | | 2016 | 0.30 | 0.32 | 0.29 | 0.31 | | 2017 | 0.29 | 0.31 | 0.27 | 0.27 | | 2018 (through 9 May 2018) | 0.27 | 0.28 | 0.26 | 0.28 | | Month | | | | | | January through March 2018 | 0.27 | 0.27 | 0.26 | 0.27 | | April 2018 | 0.27 | 0.27 | 0.26 | 0.27 | | May (through 9 May 2018) | 0.27 | 0.28 | 0.27 | 0.28 | # Exchange Controls and Other Limitations Affecting Shareholders of a Danish Company There is no legislation in Denmark that restricts the export or import of capital (except for certain investments in areas in accordance with applicable resolutions adopted by the United Nations and the European Union), including, but not limited to, foreign exchange controls, or which affects the remittance of dividends, interest or other payments to non-resident holders of the Offer Shares. As a measure to prevent money laundering and financing of terrorism, persons travelling into or out of Denmark carrying amounts of money (including, but not limited to, cash, traveller's cheques and securities) worth the equivalent of €10,000 or more must declare such amounts to the Danish tax authorities when travelling into or out of Denmark. --- 94 # AVAILABLE INFORMATION Copies of the following documents may be inspected and obtained during usual business hours on any day (excluding Saturdays, Sundays and Danish public holidays) at the Company's registered office, Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark, during the period in which this Offering Circular is in effect: (i) the Company's memorandum of association and the Articles of Association; (ii) the Combined Financial Statements; (iii) the Condensed Consolidated Interim Financial Statements; (iv) the statutory financial statements of the Group's material subsidiaries, as set out in “Additional Information—Material Subsidiaries”, for the last two financial years; (v) the market study commissioned from Bain & Company Denmark ApS; and (vi) this Offering Circular. The Danish Consolidated Act no. 1089 of 14 September 2015 on limited liability companies, as amended (the "Danish Companies Act") requires the Company to make its statutory annual reports, including the audited financial statements, available to its shareholders on the Company's website three weeks before the Company's annual general meeting. At the same time, the Company is required to send the notice convening the general meeting to registered shareholders who have so requested. The English Language Prospectus is, subject to certain restrictions, together with the Articles of Association, the Combined Financial Statements and the Condensed Consolidated Interim Financial Statements, available on the Group's website. The Company has agreed that, for so long as any Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the U.S. Securities Act, the Company will, during any period in which the Company is neither subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, provide to any holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, upon the request of such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) under the U.S. Securities Act. The Company is not currently subject to the periodic reporting and other information requirements of the U.S. Exchange Act. --- 95 # MARKET AND INDUSTRY INFORMATION This Offering Circular contains statistics, data and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Group's business and markets. Unless otherwise indicated, such information is based on the Group's analysis of multiple sources, including market studies commissioned from Bain & Company Denmark ApS, Vesterbrogade 1 L, 7th floor, DK-1620 Copenhagen V, Denmark, which is based inter alia on IDC (International Data Corporation) data, and information otherwise obtained from IDC, the International Digital Economy and Society Index and the Department for Digital, Culture, Media and Sport of the United Kingdom. Such information has been accurately reproduced and as far as the Group is aware and able to ascertain, no facts have been omitted which would render the reproduced information provided inaccurate or misleading. Bain & Company Denmark ApS is a management consulting firm providing consultancy services within, inter alia, strategy, marketing, organization, operations, technology and mergers & acquisitions. Bain & Company Denmark ApS does not have any material interests in the Group. The Group understands from Bain & Company Denmark ApS that the market study includes or is otherwise based on information obtained from: (i) data providers, including IDC; (ii) industry associations; and (iii) publicly available information from other sources, such as information publicly released by the Group's competitors as well as primary interviews and field visits conducted with industry experts and participants, secondary market research and internal financial and operational information supplied by, or on behalf of, the Group. While the Group can confirm that information from external sources has been accurately reproduced, the Group has not independently verified and cannot give any assurances as to the accuracy of market data as presented in this Offering Circular that was extracted or derived from these external sources. As far as the Group is aware and able to ascertain from this information, no facts have been omitted which would render the information provided inaccurate or misleading. Industry publications or reports generally state that the information they contain has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. Market data and statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgements by the researchers and the respondents, including judgements about what types of products and transactions should be included in the relevant market. Unless otherwise indicated in this Offering Circular, any references to or statements regarding the Company's competitive position have been based on the Company's own assessment and knowledge of the market, regions and countries in which it operates. Additionally, unless otherwise indicated in this Offering Circular, any references to or statements regarding customer perception of the Company have been based on the Company's own assessment and knowledge, including customer surveys. As a result, prospective investors should be aware that statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data in this Offering Circular (and projections, assumptions and estimates based on such information) may not be reliable indicators of the Company's future performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to a high degree of uncertainty and risk due to the limitations described above and to a variety of other factors, including those described under "Risk Factors" and elsewhere in this Offering Circular. --- 96 # EXPECTED TIMETABLE OF OFFERING AND FINANCIAL CALENDAR ## Expected Timetable of Principal Events Offer Period starts ... 23 May 2018 Offer Period will not be closed in whole or in part before ... 1 June 2018 at 0:01 a.m. (CET) Offer Period expires ... 6 June 2018 at 11:00 a.m. (CET) Completion of the IPO Reorganisation ... 7 June 2018 Publication of the pricing statement containing the Offer Price ... 7 June 2018 no later than 7:30 a.m. (CET) First day of trading and official listing of the Shares on Nasdaq Copenhagen under the permanent ISIN (subject to the Offering not being terminated or withdrawn) ... 7 June 2018 at 9:00 a.m. Completion of the Offering, including settlement of the Offer Shares (excluding the Overallotment Option, unless exercised by that date) ... 11 June 2018 Announcement of completion of Offering ... 11 June 2018 ## Financial Calendar The Company’s financial year runs from 1 January through 31 December. Financial reporting will be published on a quarterly basis. The Company currently expects to publish financial reports according to the following schedule: Interim report for the six months ended 30 June 2018 ... 21 August 2018 Interim report for the nine months ended 30 September 2018 ... 6 November 2018 Annual report for the full year ending 31 December 2018 ... 6 February 2019 Annual General Meeting 2019 ... 13 March 2019 --- 97 # BACKGROUND TO THE OFFERING AND USE OF PROCEEDS After many years under private ownership, during which time the Group’s business model has been further developed and its operations have grown substantially, the Group’s shareholders and Board of Directors believe that it is now an appropriate time to broaden the Group’s shareholder base and to apply for admission to trading and official listing of its Shares on Nasdaq Copenhagen. The Offering is expected to support the Group’s operational strategy, advance the Company’s public and commercial profile, and provide improved access to public capital markets and a diversified base of new Danish and international shareholders. The Group believes that these factors will further enhance its competitive position, in relation to other IT services companies, and provide the appropriate platform for the Group’s future development. The Group will not receive any part of the proceeds from the sale of Offer Shares sold by the Selling Shareholders. For more information about the ownership in the Selling Shareholders, please see “Ownership Structure and Selling Shareholders”. --- DIVIDENDS AND DIVIDEND POLICY ## General All Shares, including the Offer Shares, have the same rights and the Offer Shares will rank *pari passu* with all other Shares, including in respect of eligibility to receive dividends and participate in share buybacks. ## Dividend Policy and Share Buybacks The Company currently intends to use its available financial resources and free cash flow to service the Group’s debt and invest in continued future growth and therefore does not expect to pay out dividends in 2018 or 2019. Any future decision to propose dividends and the amounts and timing thereof, will be made at the discretion of the Board of Directors and will depend on a number of factors, including future revenue, profits, financial conditions, general economic and business conditions, and future prospects and such other factors as the Board of Directors may deem relevant, as well as other legal and regulatory requirements. There can be no assurances that the Group’s performance will facilitate adherence to the dividend policy, and, in particular, the Company’s ability to pay dividends may be impaired if any of the risks described in this Offering Circular were to occur, see “Risk Factors”. Furthermore, the Company’s dividend policy is subject to change as the Board of Directors will revisit the dividend policy from time to time. There can be no assurances that in any given year a dividend will be proposed or declared. As an alternative, or in addition to, making dividend payments, the Board of Directors may initiate share buybacks. The decision by the Board of Directors to engage in share buybacks, if any, will be made in accordance with the factors applicable to dividend payments set forth above. The information on the Company’s policies relating to dividend and share buybacks constitutes forward-looking statements. Forward-looking statements are not guaranteed of future financial performance, and the Company’s actual dividends or share buybacks could differ materially from those expressed or implied by such forward-looking statements as a result of many factors, including those described under “Special Notice regarding Forward-Looking Statements” and “Risk Factors”. ## Recent Dividends The Company was established in April 2018 and has not made any dividend payments. In respect of the financial years 2016 and 2015, the Group declared and paid out dividends to its shareholders (excluding intra-group dividends) amounting to DKK 116.4 million (equal to DKK 1.62 per share in NC TopCo A/S) and DKK 100 million (equal to DKK 1.39 per share in NC TopCo A/S), respectively, in each case calculated on the basis of NC TopCo A/S’ outstanding share capital of DKK 71,734,945 divided into 71,734,945 shares of nominally DKK 1, as at the date of this Offering Circular. As at the date of this Offering Circular, the Group has not made any dividend payments (excluding intra-group dividends) in respect of the financial years 2018 and 2017. ## Legal and Regulatory Requirements ### Dividends In accordance with the Danish Companies Act, dividends, if any, are declared with respect to a financial year at the annual general meeting of shareholders in the following year at the same time as the statutory annual report which includes that the audited financial statements for that financial year are approved. Further, the Company’s general meeting may resolve to distribute interim dividends or authorise the Board of Directors to decide on the distribution of interim dividends. A resolution to distribute interim dividends within six months after the date of the balance sheet as set out in the Company’s latest adopted annual report shall be accompanied by a balance sheet from either the Company’s latest annual report or an interim balance sheet which must be reviewed by the Company’s auditors. If the decision to distribute an interim dividend is resolved more than six months after the date of the balance sheet as set out in the Company’s latest adopted annual report, an interim balance sheet must be prepared and reviewed by the Company’s auditors. The balance sheet or the interim balance sheet, as applicable, must in each case show that sufficient funds are available for distribution. 98 --- Dividends may not exceed the amount proposed or recommended by the Board of Directors. Moreover, dividends and interim dividends may only be made out of distributable reserves and may not exceed what is considered sound and adequate with regard to the Company's financial condition and such other factors as the Board of Directors may deem relevant. As of the date of this Offering Circular, the Board of Directors has been authorised to distribute interim dividends but currently has no plan to do so in the near future. Dividends paid to the Company's shareholders may be subject to withholding tax. See "Taxation" for a description of Danish withholding taxes in respect of dividends declared on the Shares and certain other Danish and U.S. federal income tax considerations relevant to the purchase or holding of Shares. ## Share buybacks In accordance with the Danish Companies Act, share buybacks, if any, may only be carried out by the Board of Directors using funds that could have been distributed as dividends at the latest annual general meeting. Any share buyback shall as a main rule be carried out in accordance with an authorisation granted by the general meeting. The authorisation shall be granted for a specific period of time which may not exceed five years. The authorisation shall specify the maximum permitted value of treasury shares as well as the minimum and maximum amount that the Company may pay as consideration for such shares. As of the date of this Offering Circular, the Board of Directors is authorised in the period until 21 May 2023 to approve the acquisition of treasury shares, on one or more occasions, with a total nominal value of up to 10% of the share capital of the Company, for so long as the Company's holding of treasury shares after such acquisition does not exceed 10% of the Company's share capital. The consideration may not deviate more than 10% from the official price quoted on Nasdaq Copenhagen at the time of the acquisition. The authorisation to acquire treasury shares cannot be exercised until the Company's annual report for the financial year ending 31 December 2018 has been approved at the Company's annual general meeting. Share buybacks will be deemed a sale of shares for Danish tax purposes and as a general rule are not subject to Danish withholding tax, provided that the Company is admitted to trading on a regulated market. See "Taxation" for a description of Danish withholding taxes and certain other Danish and U.S. federal income tax considerations relevant to the purchase or holding of Shares. ## Other Requirements Dividends, if any, will be paid in accordance with the rules of VP Securities, as in force from time to time, and will be paid to the shareholders' accounts with their account holding banks in Danish kroner to those recorded as beneficiaries. Settlement of the Offering is expected to take place within two business days after the announcement of the Offer Price and allocation, and is expected to be on 11 June 2018. Registration through the holder's account holding bank will take place as soon as practically possible thereafter. Dividends not claimed by shareholders are forfeited in favour of the Company, normally after three years, under the general rules of Danish law or statute of limitations. Under the Articles of Association and applicable Danish law, there are no dividend restrictions or special procedures for non-Danish resident holders of Shares. 99 --- # CAPITALISATION AND INDEBTEDNESS The following table sets forth the capitalisation and indebtedness of the Group as of 31 March 2018: - on an actual basis reflecting the carrying amounts on the consolidated balance sheet of the Group; and - on an adjusted basis to reflect the Refinancing and commitments under the LTIP Equity Swap arrangement. For further information on the Refinancing, please see “Operating and Financial Review—Financing Arrangements and Commitments—Description of the New Facilities”. For further information on the LTIP Equity Swap, please see “Board of Directors, Executive Management and Key Employees—Incentive Programmes—Performance-Based Programmes—Post-offering long-term incentive programme”. See “Description of the Shares and Share Capital” for information relating to the Company’s issued share capital and number of outstanding Shares. You should read this table in conjunction with the Combined Financial Statements and Condensed Consolidated Interim Financial Statements and the notes thereto included elsewhere in this Offering Circular and “Operating and Financial Review”. ## Capitalisation | | As of 31 March 2018 | | | | --- | --- | --- | --- | | | Actual | Adjustments(2) | As Adjusted | | | DKK million | | | | Total current debt | 12.8 | — | 12.8 | | Guaranteed | — | — | — | | Secured(1) | 12.8 | — | 12.8 | | Unguaranteed/Unsecured(3) | — | — | — | | Total non-current debt | 1,182.3 | 106.0 | 1,288.3 | | Guaranteed | — | — | — | | Secured(1) | 15.0 | — | 15.0 | | Unguaranteed/Unsecured | 1,167.3 | 106.0 | 1,273.3 | | Total shareholders’ equity | 1,702.6 | (50.0) | 1,652.6 | | Share capital | 71.7 | — | 71.7 | | Retained earnings | 1,652.8 | (50.0) | 1,602.8 | | Other reserves | (21.9) | — | (21.9) | | Total capitalisation | 2,897.7 | 56.0 | 2,953.7 | (1) Secured debt represents leasing debt related to the Group’s right of use assets. See “Operating and Financial Review—Key Accounting Policies—Effect of Changes in Accounting Policies—Application of IFRS 16 “Leases””. (2) Adjustments represent financing used to settle interest and currency swaps of DKK 25 million related to the existing debt and the expensing of loan costs capitalized as part of the existing debt of DKK 31 million. Loan costs relating to the Refinancing of DKK 10 million will be capitalized and amortised over the term of the New Facilities. Additionally, adjustments reflect DKK 50 million commitment under the LTIP Equity Swap arrangement, to be settled on 15 April 2019, which will be accounted for as purchase of own shares and thereby also shown as a reduction to Retained earnings. (3) The New Facilities do not include any commitments to pay instalments the next 12 months, hence no current debt from the New Facilities is reflected in the table. The Group plans that excess cash generated from operations will be used to reduce borrowings. See “Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-year Period Ending 31 December 2021”. 100 --- # Indebtedness | | As of 31 March 2018 | | | | --- | --- | --- | --- | | | Actual | Adjustments(1) | As Adjusted | | | DKK million | | | | Cash and cash equivalents | 154.2 | — | 154.2 | | Undrawn committed credit facilities(2) | 10.1 | 60.6 | 70.7 | | Liquidity | 164.3 | 60.6 | 224.9 | | Current bank debt | — | — | — | | Current portion of non-current debt(3) | — | — | — | | Current financial debt | — | — | — | | Net current financial indebtedness | (164.3) | (60.6) | (224.9) | | Non-current borrowings | 1,167.3 | 106.0 | 1,273.3 | | Non-current financial indebtedness | 1,167.3 | 106.0 | 1,273.3 | | Net financial indebtedness | 1,003.0 | 45.4 | 1,048.4 | (1) Adjustments to undrawn committed credit facilities reflect increase in credit facilities of DKK 266.6 million less (i) DKK 140 million allocated to guarantees and less (ii) changes in borrowings as a result of settling currency and interest swaps related to existing debt of DKK 25 million and the expensing of capitalized loan costs related to the existing debt of DKK 31 million and less (iii) loan costs of DKK 10 million relating to obtaining the New Facilities. Additionally, adjustments to non-current borrowings reflect the commitment under the LTIP Equity Swap to be settled on 15 April 2019 relating to purchase of own shares at an amount of DKK 50 million. (2) Undrawn committed credit facilities do not include the Accordion Option to increase the commitments under the New Facilities by up to DKK 400 million. See “Operating and Financial Review—Liquidity and Capital Resources—Financing Arrangements and Commitments—Description of the New Facilities”. (3) The New Facilities do not include any commitments to pay instalments the next 12 months, hence no current debt from the New Facilities is reflected in the table. Though the Group plans that excess cash generated from operations will be used to reduce borrowings. See “Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-year Period Ending 31 December 2021”. 101 --- 102 # INDUSTRY This Offering Circular contains statistics, data and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Group's business and markets. Unless otherwise indicated, such information is based on the Group's analysis of sources as listed in "Market and Industry Information". Such information has been accurately reproduced, and, as far as the Group is aware from such information, no facts have been omitted which would render the information provided inaccurate or misleading. # The Next-Generation IT Services Market and Trends ## IT Services Focusing on Innovation and Differentiation The IT services market is undergoing a secular shift from traditional low-value added services such as infrastructure management and enterprise resource planning ("ERP") implementation towards high-value added services including digitalisation, custom application development and business process re-engineering. This shift presents opportunities for service providers focused on this large and fast growing segment as organisations across sectors embrace, adapt and respond to the new digital opportunities and efficiency potential made possible by technologies available today. Digitalisation is the current wave of IT services sweeping the market, and is facilitated by a variety of factors: - Need for agility: Organisations are increasingly facing pressure to transform their business and fight off competitive threats and adapt quickly to market changes. They no longer have the luxury of long implementation cycles with unknown outcomes as customers and competition demand shorter response times; - Availability of new technologies: Technologies such as cloud services, big data, automation, artificial intelligence, social technologies, mobile devices, and others provide the possibility of creating enhanced experiences, more efficient processes and new business models; - Need for upgrades: Most organisations still run on older legacy systems that have been upgraded and enhanced over many decades and have become fragile and expensive to run, making it difficult to be integrated with new digital offerings; and - Talent crunch: There are a limited number of companies able to provide the competency required to manage these types of projects and change the core of the IT operation which combines expert creative, strategy, business and technology skills. These factors are creating a strong tailwind for IT services companies that help their customers embrace new opportunities. However, not all areas of IT services will grow at the same pace. Traditional areas like infrastructure management and ERP implementation, for example, are likely to continue to face pressure, while demand for agile solution development is likely to outpace other segments. With digitalisation sweeping the IT services market, IT companies can be categorised according to how focused they are on providing the flexible and agile solutions to complex issues that customers are facing. A new approach to IT services, "New World IT", is focused on solutions that help customers change their businesses and use IT as a part of their strategy compared to just supporting their business. New World IT services providers utilise next-generation technologies to provide customers with innovative and flexible digitalisation projects and bespoke services for complex situations. Companies such as the Group are pure-play providers of those services and hence clearly differentiated from traditional IT companies that focus on legacy IT solutions that are primarily built to support the business, back office enabling solutions, and inflexible and slow-moving systems and IT assets. --- ![img-0.jpeg](img-0.jpeg) Figure 1. New vs. Old World within IT Services # Increased Customer Demand for Digitalised Processes that Enable Competitive Advantage Customer focus is shifting from legacy systems to next-generation systems, following the development and fast adoption of new technologies and need to integrate these systems with new digital offerings. This shift is moving project focus from enhancing or maintaining large, monolithic systems and inflexible data assets, to smaller and more flexible architecture for seamless experiences and advanced analytics. In Old World IT, spending was concentrated on supporting business activities, with projects characterised by long lead times, rigid scope of work and extended release cycles. In New World IT, attention is shifting to more agile and flexible ways of working, which deliver complex functionality faster to market. The focus is now on finding opportunities to grow and change the business, continued efficiency and making IT an integral part of a company's core strategy. This digital transformation also adds complexity, driving strong demand for highly skilled resources that can deliver swiftly and in an agile manner, while IT spend is redirected to "digital" with attention shifting away from "legacy". The figure below shows that innovative digital solutions are forecast to account for approximately $80\%$ of planned IT spend for the companies surveyed. --- ![img-1.jpeg](img-1.jpeg) Figure 2. Results of Survey on Split of Private Market IT Services Spend WHERE WILL THE NEXT DOLLAR OF INIncrementAL IT SPENDING GO TO High quality and stable solutions, on-time delivery and at-budget delivery are the key purchasing criteria for customers when selecting IT services providers. ![img-2.jpeg](img-2.jpeg) Figure 3. Key Purchasing Criteria by Priority To win in this market, IT service providers must have a good understanding of customer needs and the business implications of broader digitalisation. Furthermore, IT services providers need to have an excellent track record of delivering on time, on budget and within scope and must have an agile delivery model that is not tied to any given product or framework. The technological requirements and changing customer needs are creating a market backdrop that allows IT services companies like the Group to continue to expand and benefit from market trends. --- # Next-Generation IT Market is Segmented by the Degree of Complexity and Innovation in the Process Customers are now looking at IT services spend in a "pace layered approach" which includes the following three categories: - 'Records', which focuses on commoditisation and operational efficiency, and is characterised by an infrequent pace of change and limited customisation. It is usually found in business capabilities with a clear focus on standardisation and/or operational efficiency. - 'Differentiation', which focuses on unique processes strengthening current competitive advantage, and is typically related to business capabilities that enable unique company processes or industry-specific capabilities. Differentiation can be characterised by more frequent change and emphasis on configurability, with some degree of customisation. - 'Innovation', which focuses on next competitive advantage, around new applications built on an ad hoc basis to address emerging business requirements or opportunities. This leads to a very frequent pace of change, with a high degree of customisation. In the future, what is currently categorised as Records might become Differentiation or Innovation once legacy systems are upgraded or changed. A substantial shift of IT spend towards Differentiation and Innovation is expected by 2020, with approximately $50\%$ of total IT spend in 2020 expected to be in Differentiation and Innovation, compared to approximately $10\%$ in 2016. ![img-3.jpeg](img-3.jpeg) Figure 4. Segmentation of IT Services into Pace-Layered Approach # Descriptions # Innovation - Solutions built on ad-hoc basis - At the forefront of each new technological wave # Differentiation - Customized solutions built around existing infrastructure # Records - Commodity solutions (one size fits all) # Focus Markets and Segments The Group is focused on the market segments where it can best utilise its competitive advantage. The total addressable market for the Group is the IT services market where the Group could offer services. However, within the addressable market, the Group focuses primarily on Differentiation and Innovation, its core market. The Group also provides Records-type services but these mainly include upgrading older legacy systems to newer, more complex systems. This type of business is provided mainly in connection with offerings spanning multiple product categories, which integrate the three pace layer methods into so called cross-category offerings. The demand for agile concepts and integrated solutions within cross-category offerings is expected to grow and allows the Group to compete for a wider array of projects. Within the core market, the Group specialises on complex projects which require innovative solutions and highly-skilled development capabilities. In the public sector, the core market includes large, complex projects for the central government focused on developing IT services designed to facilitate and automate public welfare systems, and selected large --- municipalities that, post-development phase, have significant share of maintenance and operations recurring spending volume. The Group specialises in large and complex projects involving several stakeholders and technical interdependencies, and companies in need of innovative thinking for projects that are innovative or differentiated in nature and end-to-end systems integration, including systems of records. The public sector has a significant number of known tenders coming to the market and the majority of the IT spend is driven by multi-year contracts. The multi-year nature of the public sector contracts and the recurring revenue from the maintenance and operations phases of such contracts provide for revenue visibility and allow for upselling and cross-selling opportunities. In the private sector, the core market includes medium and large companies with significant annual IT spend, companies with strategic focus on using digitalisation as a competitive advantage, and "non-vanilla" projects where sophisticated IT capabilities are required. The Group specialises in highly complex and large IT projects for customers that use IT services to innovate and differentiate themselves from competition and projects that require highly-skilled development. ![img-4.jpeg](img-4.jpeg) Figure 5: Market Segment Definitions | Definitions - Private Market | Definitions - Public Market | | --- | --- | | Addressable market ✓ IT service market where Netcompany offers solutions ● Excludes IT hardware and support functions | Addressable market ✓ IT service market where Netcompany offers solutions ● Excludes dedicated IT hardware/software; Infrastructure | | Core market ✓ Medium and large companies with significant annual IT budget envelope ✓ Companies with strategic focus on using digitalization as a competitive advantage ✓ "Non-Vanilla" projects where sophisticated IT capabilities are required ● Excludes 70% of "systems of records" ● Excludes companies with small annual core IT Spend | Core market ✓ Central government e.g. Ministries ✓ Select Municipalities: Only the largest municipalities Municipal purchasing organisations (✓) Regions/healthcare, potential for targeting select projects ● Small individual municipalities with little total annual spend; however for projects if large size or potential | | Sweetspot ✓ Highly complex and large IT projects for customers that use IT solutions to innovate and differentiate themselves from competition ✓ Projects that require highly skilled development to offer service ● Excludes less complex Records type projects | Sweetspot ✓ Large & complex projects involving several stakeholders and technical interpendencies ✓ Need for innovative thinking (Projects of innovative or differentiated nature + end-to-end systems integration incl. systems of records) ✓ Multi-year projects (+4 year) with significant share of recurring (maintenance) revenue and potential for operations | # The Broader European IT Services Market Digitalisation is a key focus point for the European IT services market. The market was worth approximately DKK 1,500 billion in 2016, of which approximately $72\%$ was attributable to Records, $27\%$ Differentiation and approximately $1\%$ Innovation. Differentiation and Innovation are estimated to grow at a CAGR of $10\%$ and $15\%$ , respectively, until 2020, far outpacing the growth of Records. Growth is driven by digitalisation, which is a major focus for the European Commission. The Juncker Commission has set the Digital Single Market Strategy as one of its top priorities, with the goal of enhancing the transformation and growth potential of the European Digital Economy. A ranking study, measuring the digitalisation of countries, done by the EU Commission found that the extent of digitalisation in EU countries varies to a large degree. The study measures the digitalisation of countries based on five categories: Connectivity, Human Capital, Use of Internet, Integration of Digital Technology and Digital Public Services. The study has found that the top European performing countries, Denmark, Sweden, Finland, are also the leading countries on the global stage. --- ![img-5.jpeg](img-5.jpeg) Figure 6: I-DESI (International Digital Economy and Society Index) 2015 Main Ranking of digitally advanced countries Although Denmark, Finland and Sweden are among the most digitally advanced countries, the overall EU average is still lagging behind countries such as Korea, Iceland, the US, Japan, Canada and Australia. Due to the high focus on bringing up the digital standards of all European countries to a leading level, the growth in digitalisation has, however, been more rapid than in other western countries, such as the US. # The Danish IT Services Market Denmark is a very advanced market for IT services. It is one of the most digitalised countries in the world and the most digitalised country in the European Union, ranking among the top-five countries in Europe when it comes to the digitalisation of public services (Source: Digital Economy and Society Index ("DESI"), 2017). The total Danish IT services market was worth approximately DKK 37 billion in 2016 and is expected to grow by a CAGR of between $0\%$ and $2\%$ from 2016 to 2022. Within the Danish IT services market, the addressable market was worth approximately DKK 22 billion in 2016 and is expected to grow by a CAGR of between $2\%$ and $4\%$ from 2016 to 2022 and the core market was worth approximately DKK 12 billion in 2016 and is expected to grow by a CAGR of between $8\%$ and $10\%$ from 2016 to 2022. Growth within the core market, from 2016 to 2022, is driven by Differentiation which is estimated to grow by a CAGR of approximately $8\%$ to $12\%$ , and Innovation which is estimated to grow by a CAGR of approximately $15\%$ to $20\%$ , far outpacing the growth of Records. The core market has historically consisted of approximately $50\%$ Records, but due to the forecasted rapid growth within Differentiation and Innovation, the core market is anticipated to shift more towards Differentiation and Innovation. This shift is supported by the Danish Government's "New Digital Strategy 2016-2020", which has outlined the aspiration to make Denmark a digital frontrunner. ![img-6.jpeg](img-6.jpeg) Figure 7: Danish IT-Services Core Market Forecast (DKK billion) --- 108 # Danish Public Market The core public market within Denmark was worth approximately DKK 5 billion in 2016, and is forecast to grow by a CAGR of 8% to 10% from 2016 to 2022. The core market includes the central government (e.g. Ministries), selected projects with the regions and within the local government, and the largest municipalities (including, for example, Copenhagen, Aarhus, Aalborg, and other top 10 municipalities). Within the central government, SKAT (the Danish tax authority) is the largest spender, with approximately DKK 1.9 billion of IT spend in 2016. While the Group holds a significant market share within this account, there is still room for further expansion of scope. Other central government spend amounted to approximately DKK 1.0 billion in 2016, with potential for further market share gains for the Group. The overall market has become more accessible for disruptive companies such as the Group, as EU directives have liberalised the tender process for public IT projects. The public market has also been transforming, with the incumbents (See “Business—Key Business Areas—Sectors—Public—Competitive landscape/competitors” for an overview of the incumbents) losing market share as a result of reputational damages due to poorly executed projects, while the Group has had a consistent track record of gaining market share. Local government market IT spend amounted to approximately DKK 3.7 billion in 2016 (including in the non-core market), of which approximately DKK 0.3 billion was through KOMBIT (a centralised shared municipality IT project delivery unit owned by the municipalities) and approximately DKK 0.3 billion was through Arbejdsmarkedets Tillægs pension (Danish Pension and Benefits Provider and Administrator) (“ATP”). The remaining approximately DKK 3.1 billion is from other local government, consisting of the largest municipalities, as well as smaller municipalities not part of the Group’s core market. The large and dominant market share within local government was historically held primarily by KMD. The market has become increasingly competitive following the privatisation of KMD in 2009 and the creation of KOMBIT. Through the introduction of KOMBIT, the 98 Danish municipalities have collaborated to invite a wider array of vendors into their public tender processes. As the Group has a strategic focus on the largest tenders in the public market, tenders from KOMBIT and ATP are key. In other local government IT spend, the Group only focuses on the core market of largest municipalities, a fragmented market that offers room for market share gains. Unifying the tendering process of municipalities and public re-tendering of legacy contracts, combined with the liberalisation of the central government market, has made the market large and transparent. The value of announced public core market tenders (including new tenders and re-tenders of ongoing contracts) amount to an estimated DKK 13 billion for the period from 2018 to 2022, of which the majority consists of new tenders. In addition, the share of known tenders comprises approximately 63% of expected total core market IT spend per year from 2017 to 2022. # Danish Private Market The core private market in Denmark was worth approximately DKK 7 billion in 2016, and is forecast to grow by a CAGR of 10% to 12% from 2016 to 2022. Large accounts, i.e. companies with estimated IT spend of more than DKK 10 million per year, are a compelling customer segment for the Group, as the share of Danish private companies spending more than DKK 10 million on IT services has increased from approximately 40% in 2015 to approximately 53% of total private market revenues in 2017, outpacing the growth in all customer segments with smaller annual IT spend. The business critical nature of the services offered and the high risks associated with switching vendors improve customer stickiness in this sector. Furthermore, these large accounts provide better project economics, as they are characteristically longer term and larger in scale, and provide potential for cross-selling. Large projects are excellent references to use when competing for other projects, and also provide better learning opportunities for the consultants, as they introduce exposure to a broader range of competencies and technologies. Not only is the private market attractive, but there are not many competitors that have both the scale and capabilities required to compete. Small competitors focus on niche capabilities, lacking a consolidated scope, and larger competitors are still heavily reliant on legacy technologies, lacking the capability of cross selling the more complex and innovative solutions. The Group has consistently been gaining market share as big spenders continue to digitalise their processes, this presents the Group with further potential for market share gains. # The Norwegian IT Services Market Similar to Denmark, Norway is a highly digitalised country, with a high emphasis on digital public services. Although the Norwegian society is advanced in terms of digitalisation, the IT services market is lagging behind the wave of next-generation IT disruption that is taking place in Denmark, presenting a large opportunity for the Group. --- In 2016, the total Norwegian IT services market was DKK 25 billion and within the Norwegian IT services market, the addressable market was worth approximately DKK 13 billion and the core market was worth approximately DKK 7 billion. From 2016 to 2022, Differentiation is estimated to grow by a CAGR of approximately $8\%$ to $12\%$ , and Innovation is estimated to grow by a CAGR of $15\%$ to $20\%$ , far outpacing the growth of Records. As in the Danish market, the core market has historically consisted of approximately $50\%$ Records, but due to the forecasted rapid growth within Differentiation and Innovation, the core market is anticipated to shift more towards Differentiation and Innovation. ![img-7.jpeg](img-7.jpeg) Figure 8: Norwegian Core IT-Services Market Forecast (DKK billion) # Norwegian Public Market The core public market in Norway was worth DKK 3 billion in 2016, and is forecast to grow by a CAGR of $8\%$ to $10\%$ from 2016 to 2022. The core public market includes central government (e.g. ministries) and the top-10 largest municipalities with over approximately DKK 78 million in annual IT spend (such as Oslo, Bergen, Trondheim, Stavanger, Bærum, Drammen and Fredrikstad). Growth is driven by increased spending on healthcare systems, updating state IT-systems, and de-centralised spending from municipalities on elderly care. The core public market is dominated by a few large incumbents, with the smaller challengers focused on niche and narrow offerings, providing opportunity for the Group for market share gains. # Norwegian Private Market The core private market was worth DKK 4 billion in 2016, and is forecast to grow by a CAGR of $10\%$ to $12\%$ per year from 2016 to 2022. The core private market includes medium and large companies, with growth driven by a strategic focus on digitalisation across all verticals in the private sector, and projects becoming increasingly sophisticated requiring sophisticated IT capabilities. The core private market is less consolidated than the core public market and has seen the major incumbents lose market share, allowing other IT services companies, like the Group, to gain market as the need for customised industry solutions increases. # The UK IT Services Market While the United Kingdom is less advanced in digitalisation compared to Denmark and Norway (ranking number seven among the European countries in the I-DESI study), the UK government has taken steps to increase the rate of digitalisation, for example, by publishing its UK Digital Strategy on 1 March 2017. The strategy outlines the need to develop single cross-government platform services, to use digitalisation to improve the efficiency of their public services, and to make the government itself a digital organisation. The UK IT services market is the largest in Europe. In 2016, the total UK IT services market was DKK 330 billion and the addressable market was DKK 171 billion in 2016. Within the UK IT services market, the core market was worth approximately DKK 77 billion in 2016. The core UK market is the largest of the countries in which the Group is present, and at the same time the least advanced in terms of digitalisation. --- ![img-8.jpeg](img-8.jpeg) Figure 9: UK IT-Services Core Market Forecast (DKK billion) The core UK market is forecast to grow by a CAGR of $7\%$ to $9\%$ from 2016 to 2022, in aggregate. The Group's core segments are forecast to grow at higher pace than the overall market, with Innovation expected to grow at a CAGR of $14\%$ to $20\%$ from 2016 to 2022 and Differentiation expected to grow at a CAGR of $7\%$ to $11\%$ from 2016 to 2022. Growth is expected to be driven by the UK government's vision to push user friendliness and efficiency through investments in digital solutions, the need for digital investments in key verticals, large enterprises' investments in new innovative technology and supportive IT-systems, and the rise of modularised solutions replacing traditional enterprise wide platforms and the resulting demand for product innovation and system integration. The UK public market spend consists of approximately $60\%$ spend coming from municipalities and regions and the remainder from the government. The market is fragmented, with the top-10 players holding less than half of the market share in 2016, and with opportunities to grow due to the problems some IT services providers are experiencing. Currently, the UK government has several IT services projects on track to fail and is increasingly favouring agile and nimble players, capable of delivering more Differentiation and Innovation based services. In connection with Brexit, the UK government is likely to require additional IT services as part of the shifting regulatory framework, thereby providing the Group with further opportunities for market share gains. --- 111 # BUSINESS Investors should read this section in conjunction with the more detailed information contained in this document, including the financial and other information appearing in “Risk Factors” and “Operating and Financial Review”. ## Overview The Group is a pure-play next-generation IT services company, focused on delivering business critical IT solutions to large Public and Private sector customers to lead and support them in their digital transformation journeys. These solutions are at the heart of an organisation’s core strategy or function and are thus highly significant for customers in conducting their core business. The Group has developed and institutionalised a highly differentiated business model that, for over 18 years, has proven to be repeatable and scalable and enables the Group to deliver projects on time, on budget and within scope. The uniqueness of the Group’s business model is characterised by an integrated sales and delivery approach, IT people leading IT people, a very customer transparent and deliverable-driven methodology and a highly skilled team of IT professionals, with an average age in 2017 of approximately 33 years. The Group’s business is comprised of two main segments, each of which is an operating segment for financial reporting purposes: - **Public sector.** Through the Group’s Public sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to central and local government, i.e. the state and large municipalities and regions. The Group’s projects in the Public sector encompass the delivery of society critical systems, including tax collection from citizens and on vehicles, payments of public benefits to citizens (e.g. pensions, cash assistance, children/family and property/housing), central registries for companies, properties, employees and public self-service portals relating to public services, including health. The Group estimates its share of the core public market in Denmark (defined as large complex projects for the central government and selected large municipalities that, post development phase, have a significant share of maintenance and operations recurring spending volume) based on total annual IT spend was approximately 6% for the year ended 31 December 2016. Public sector revenues accounted for 55.3% and 51.6% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 50.7% and 39.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. - **Private sector.** Through the Group’s Private sector segment, the Group offers end-to-end IT services (including development, maintenance and operations) to mid- and large-sized businesses as well as membership organisations, such as trade unions. The Group delivers business critical IT solutions covering various areas such as e-commerce, billing, document and case management, system integration, customer relationship management (“CRM”) and enterprise risk management (“ERM”), artificial intelligence and information management, very often in combination with each other. The Group estimates its share of the core private market in Denmark (defined as medium and large companies with significant annual IT budgets, companies with strategic focus on using digitalisation as a competitive advantage and complex projects where sophisticated IT capabilities are required) based on total annual IT spend was approximately 7% for the year ended 31 December 2016. Private sector revenues accounted for 44.7% and 48.4% of the Group’s total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 49.3% and 61.0% of the Group’s Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. The Group’s IT services cover development through to maintenance and operations. The Group’s development services include design, development and implementation of IT solutions driven by customer requirements in the digital transformation areas of systems modernisation, system differentiation and system innovation projects. Its maintenance and operations services include long term benefit realisation initiatives, to continuously maintain, operate and support customer IT solutions that the Group has delivered. As at 11 May, the Group had approximately 1,432 employees based in its key geographies of Denmark, Norway and the United Kingdom (excluding freelancers in Denmark and Norway) and an additional 319 employees based in Poland and Vietnam. --- The following table sets forth the Group's key performance indicators for the periods indicated: | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million, unless otherwise indicated | | | | | | Organic revenue (non-IFRS)(1) | 443.2 | 297.8 | 1,232.0 | 887.9 | 758.1 | | Organic revenue growth (non-IFRS)(2) | 33.1% | 45.3% | 37.0% | 17.1% | 20.5% | | Gross profit margin | 38.3% | 42.2% | 43.3% | 41.4% | 41.1% | | EBITA (non-IFRS) | 120.1 | 95.7 | 369.0 | 212.9 | 207.4 | | EBITA margin (non-IFRS) | 23.2% | 28.7% | 26.1% | 23.7% | 27.4% | | Adjusted EBITA (non-IFRS)(3) | 127.8 | 95.7 | 402.0 | 248.0 | 207.4 | | Adjusted EBITA margin (non-IFRS)(4) | 24.7% | 28.8% | 28.4% | 27.6% | 27.4% | | Utilisation | 88.2% | 87.3% | 87.6% | 86.2% | 87.9% | | Customer-facing(5) full time employees | 1,613 | 952 | 1,534 | 869 | 631 | | Freelancers in Denmark and Norway(6) | 83 | 44 | 78 | 38 | 8 | | Non customer facing FTEs(7) | 105 | 44 | 93 | 40 | 29 | | Total FTEs(8) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (2) Represents the percentage change in the Group's revenue as compared to the prior period, excluding changes in such revenue attributable to businesses acquired as a result of acquisitions at constant foreign exchange rates and the impact of foreign currency exchange rates on revenue. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (3) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non -IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. (4) Adjusted EBITA margin is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. (5) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. As at the period ended and rounded to the nearest whole number. (6) As at the period ended and rounded to the nearest whole number. (7) As at the period ended and rounded to the nearest whole number. (8) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. As at the period ended and rounded to the nearest whole number. # The Group's Business Model In order to deliver complex projects "on time, on budget and within scope" the founders, when the Group was formed, developed and institutionalised a scalable and repeatable business model that the Group has followed ever since. That business model (illustrated through the diagram below) is still core to the Group as the Group focuses on delivering complex business critical solutions to enable customers in their digital transformation. The Group maintains a highly disciplined approach to new customers and projects and by focusing only on strategic customers who are a good fit with the Group's delivery capabilities, the Group ensures that it is best placed to deliver its projects on time, on budget and within scope. The Group focuses on strategic customers who require such business critical IT services, including in the Public sector segment, central government, large municipalities and regions, and in the Private sector segment, mid- and large-sized businesses as well as membership organisations, such as trade unions, with significant annual IT spend relevant to the Group's IT services. The Group's business model is designed around three key pillars: (i) an outstanding talent and career development model; (ii) a differentiated management model and integrated sales approach (which is characterised as business development within in the Group) and (iii) a unique, agile, deliverable-driven methodology and toolkit. --- ![img-9.jpeg](img-9.jpeg) # The Group's Competitive Strengths The Group believes that the following key strengths will help it maintain and extend its strong position in the Danish IT services market, strengthen its position in the Norwegian and UK IT services markets and assist its entry into other Northern European countries with high levels of digitalisation. # Excellent track record in project delivery, high customer satisfaction and customer retention The Group has an excellent track record of delivering business critical IT solutions to customers on time, on budget and within scope. Digitaliseringsstyrelsen (the Danish Agency for Digitalisation) publishes semi-annual status updates for large IT projects and their respective IT service providers. From 2013 to 2017, the Group maintained a "green" track record for each of the projects it has been involved in, meaning that it has delivered each project on budget, on time (defined as including up to one month of delay) and within scope (defined as delivery of more than $95\%$ of expected project net present value). The Group's track record for delivering on time, on budget and within scope has created high customer satisfaction among the Group's customers. As at 31 December 2017, the Group had a net promoter score ("NPS") of $32\%$ in the Public sector, which was 58 percentage points above that of its competitors at $-26\%$ on average, and a NPS of $-4\%$ in the Private sector, which was 31 percentage points above that of its competitors at $-35\%$ on average. In the Private sector, the Group has a particularly strong NPS among its core focus group of large customers with a total IT spend (including IT spend outside of the Group) exceeding DKK 100 million per year, at $33\%$ as at 31 December 2017. The Group's high rate of customer satisfaction has led to high customer retention and significant repeat customer business, with more than $89\%$ of total Group revenue in Denmark coming from existing customers each year since 2015. The excellent delivery track record and high customer satisfaction is a key to the Group's high revenue visibility and growth trajectory. # Pure-play next-generation approach designed for delivering complex business critical systems Digitalisation (or industry 4.0 as it is often called) is changing business models and whole industries. The Group's customers are embarking on digital transformation journeys where old legacy IT systems, such as mainframe or enterprise resource planning ("ERP") systems, are integrated into, minimised or completely replaced by more differentiated, innovative parts of the future IT system landscape, so-called "next-generation IT". This includes aspects such as self-service, artificial intelligence, workflow automation and robotisation, modern case management and knowledge sharing, all of which are focus areas of the Group. The Group considers itself to be a "pure-play next-generation" IT company, leading and supporting its Public and Private sector customers in their digital transformation journeys. At the core of any complex, business critical project, the Group focuses on understanding its customer's operations and needs with a view to managing complexity by breaking down projects into smaller parts so that it --- can ultimately deliver a simple solution designed to digitally transform the customer's business. The Group is technology agnostic which means that its service offering is not restricted or limited to a particular technology or platform, and it can therefore use a specific technology or combination of technologies in order to develop the right solution for the customer. This allows greater flexibility in the service offering and enables more efficient execution as the Group is not tied to particular systems or providers. ## Institutionalised, repeatable and scalable business model The Group operates its own unique, institutionalised, repeatable and scalable business model designed to deliver excellence in digital transformation on time, on budget and within scope through three key pillars: - Outstanding talent and career development model. The Group's IT professionals are highly skilled, many coming from top universities with advanced IT or science related degrees. In 2017, 86% of new hires had bachelor (or higher) degrees. The Group maintains stringent hiring criteria, aiming to attract young and ambitious candidates among the top 5-10% of graduates with IT or science related degrees. As a result of the Group's success in attracting top talent from universities and large influx of graduates each year, the average age of the Group's employees in 2017 was approximately 33 years. The Group focuses on talent and career development through its accelerated merit based career development programme which rewards top performers with accelerated progression through the various career stages from Consultant to Partner. The programme ensures focus on maximising each individual employee's personal and professional growth through specially designed performance feedback, career counselling, mentoring and training at all stages in the career model. This, together with giving new graduates the opportunity to work on complex, business critical IT development projects, along with a competitive remuneration model, has earned the Group a positive reputation among graduates from top ranked Danish universities. In addition, the hands-on management approach by people who are themselves IT professionals allows for continuous feedback and learning for new consultants who are assigned to customer-facing projects from the outset of their careers alongside more experienced consultants. The Group also provides employees with a dedicated and highly specialised employee training programme through mandatory training courses delivered as part of the Netcompany Academy, which provides employees with efficient and effective training courses designed and developed around the Group's methodology and toolkit by experienced Group executives, managers and systems architects. See “—Employees—Career development programme”. - Differentiated management model and integrated sales approach. The Group's business model is centered around a decentralised management model focused on IT people leading IT people throughout all levels of the organisation. Unlike most IT services providers that maintain separate teams for sales, management and development/operations, the Group employs an integrated sales and delivery approach whereby the same individuals responsible for selling IT services to customers are also responsible for delivering such systems and solutions, maintenance and operations. The Group believes that the benefits of this approach are significant, as highly skilled and experienced IT people are best positioned to advise, formulate, detail and price realistic customer proposals, to identify and mitigate risk and also be responsible for ongoing customer communications thereby ensuring trusted quality customer relationships. In addition, the Group's risk assessment calculation, which is important when pricing, scoping and committing to new projects, is based on an operational evaluation by the Group's experienced IT professionals who assess the complexity of each new project, and can apply discipline and steer the Group to entering into contracts at the right price level and contracts which they believe the Group can successfully execute. From an overall risk perspective, the Group strongly believes that IT people are the best people to lead the delivery of IT projects as practical hands-on delivery experience, gained from participating in building IT systems, provides the project managers with a crucial understanding of IT solution complexity, project plan and risks. The Group's management model is also characterised by the staffing of projects whereby most consultants work on a day-to-day basis in small teams which can be scaled up or down based on project needs. Due to its effectiveness, the Group has not changed this approach even though the Group has experienced rapid growth. - Unique, transparent, agile, deliverable-driven methodology and toolkit. The Group's business model involves the use of an agile, transparent and deliverable-driven methodology and toolkit which the Group believes is unique. This methodology and toolkit provides a complete set of guidelines, tools and templates for planning, delivering, managing and documenting complex integrated IT solutions. It is used across all projects and throughout all stages, from development to maintenance and operations. The Group's methodology ensures that large, complex projects are broken down into smaller and more manageable work packages in order to reduce the overall project risk. The Group's deliverable driven 114 --- approach ensures that measurable progress is actively monitored and managed on each project throughout the project's lifecycle, in order to provide early indications of any potential deviations from the plan. The Group's agile methodology is supplemented with control elements from a more traditional waterfall project management approach. The Group combines the best of the two approaches, recognising the need to demonstrate quick wins and short time to market and reduces risk significantly by adopting classic built-in controls relevant to large-scale, fixed priced projects. The Group's supporting toolkit includes stringent collaboration and approval processes with customers, in order to ensure that both the Group and customers have a firm, common and completely transparent understanding of all deliverables as well as project progress. As all of the Group's employees are trained in the very same methodology across all projects and customer engagements, the Group has the ability to mobilise and change assignments on projects at short notice. ## Leader in driving digital transformation in Denmark The Group has been a leader in driving the digital transformation agenda in Denmark. Denmark is one of the most digitalised countries in the world and the most digitalised country in Europe and ranks among the top five countries when it comes to digital public services (Source: European Commission, DESI, 2017). The Group delivers state-of-the-art, user-friendly and effective administrative systems regulating major social benefits areas for all Danish citizens, such as child, housing and benefits and pensions for the elderly. The Group also runs the majority of new IT projects for the Danish tax collection centre Implementerings Center for Inddrivelse (Implementation Centre for Debt Collection) ("ICI"), in order to provide Denmark with a state-of-the-art modern tax collection system. In addition, the Group has also been chosen and is currently delivering the highly prestigious AULA education platform for knowledge sharing that is aimed at all children in kindergartens and schools across Denmark. In addition to the significant impact the Group has had in the Public sector segment, the Group has also built a B2B platform for the sale of tools and equipment for some of Denmark's largest companies in the plumbing industry and has delivered some of Denmark's most advanced marketing and sales solutions through an additional B2B platform for the sale of tools, components and equipment for some of Denmark's largest companies within the wholesale industry. The platforms help companies to optimise the supply of goods to the professional market across distribution channels. Further, the Group has delivered numerous advanced marketing and sales solutions enabling clients to deliver a tailored and personalised customer experience and thereby improve conversion rates and customer loyalty. In addition, the Group has delivered solutions to a number of utility companies optimising their efficiency and product range by introducing new and flexible billing platforms, making it easier for these companies to introduce new products, packages and subscriptions to their end-customers. As a result of these and other projects, the Group has a very visible presence in Denmark and voice in the public debate relating to the promotion of digitalisation as a main driver for creating and sustaining wealth in Danish society. ## Experienced Executive Management and Partner team with proven track record The Group's Executive Management and Partner team is comprised of individuals with strong operational experience and execution capabilities gained through extensive customer interactions during their tenure at the Group. In addition, specific experience relating to international financial reporting, corporate governance and investor relations has been added to the Group by expanding the Executive Management team through the hire in 2017 of a Group CFO with substantial experience in these particular areas. The Group's founders continue to actively manage and lead the Group's business and strategy and exemplify how the Group's approach of IT people leading IT people runs all the way up the organisation. In addition, leadership is provided by the Group's Partners, substantially all of whom started in more junior roles within the Group and have progressed and developed through the Group's accelerated merit-based career model. The Group believes that its performance culture, both driven and supported by its business model, is important to develop and preserve. ## The Group's Strategies The Group's key strengths have positioned it favourably to take advantage of the underlying continued growth in demand for digitalisation and to selectively continue its expansion in Northern Europe. As part of the Group's 2022 strategy, the Group will focus on continuing what has made it successful while also leveraging the momentum from recent contract wins through continuing to advance the digitalisation agenda, implementing its business model and performance culture in acquired companies, continuing to enhance its talent pool and continuing to expand in Northern Europe and increase market share. 115 --- 116 # Continue advancing the digitalisation agenda in both the Public and Private sectors A central pillar of the Group’s 2022 strategy is to maintain its leadership position in advancing the digitalisation agenda in both the Public and Private sectors by supporting customers in their digital transformation journeys. The Group aims to continue to increase its market share in both Denmark and the other countries in which it operates. By being at the forefront of digitalisation in the Public sector, the Group is able to play a meaningful role in preserving the social welfare system and develop IT services designed to facilitate and automate public welfare systems to promote efficiency and free up public resources so that they may be dedicated to serving the Public sector in a more meaningful manner. In order to advance the digitalisation agenda, the Group leverages its experience across sectors. For example, the Group has used its experience to deliver digital solutions to the central government within tax collection, vehicle registration, unemployment benefit and other key welfare systems which in turn has increased the efficiency of the public sector more generally. The Group expects its future growth to be organically derived from increasing sales to existing customers as well as from sales to new customers. In Denmark, Norway and the UK, there are large core markets (defined as the core public and private markets) that provide the Group with the opportunity to continue to increase its market share. Being a pure-play next-generation IT services company, the Group mainly focuses on the parts of the market relating to systems of differentiation and innovation which together are expected to grow at twice the rate of records in terms of total core market over the next several years in all three of the geographies in which the Group has a significant presence. See “Industry—The Next-Generation IT Services Market and Trends” for further details. # Implementation of business model and performance culture in acquired companies Implementing the Group’s unique business model and performance culture in the companies that the Group has acquired and may in the future acquire is a key priority for the Group as part of its 2022 strategy. The Group believes that its business model and performance culture set it apart from other IT service providers and are critical to its success. By ensuring that the business model and performance culture are effectively implemented in new markets and by newly acquired companies, the Group believes it will be able to grow its margins in the future as the acquired companies gradually shift their delivery and business model towards the Group’s and enhance their ability to deliver their IT services on time, on budget and within scope. The Group intends to continue to pursue selective acquisitions of targets that are agile companies with a strong talent pool, which it can then grow organically. See “—Continue to expand in Northern Europe and increase market share” below. # Continued enhancement of the talent pool The Group’s IT professionals are critical to the success of its business and the Group’s ability to grow and continue to capitalise on its key strengths will depend on the Group’s ability to continue to attract, retain and develop ambitious young, talented and highly skilled individuals. The Group expects to continue to capitalise on its strong employer brand and reputation in recruiting top graduates from top universities in order to continue to refresh its consultant pool. Continued development of such professionals through the Group’s career development programme based on an accelerated merit-based approach and competitive remuneration models for top performers is a key component of the Group’s strategy. While a strong talent pool is one of the Group’s key criteria for selecting acquisition targets, a key priority for the Group is to ensure that IT professionals coming from such acquisitions are able to assimilate into the Group’s performance culture. As a means to ensure rapid implementation of its business model and performance culture within the recently acquired Hunter Macdonald Ltd business and, in particular, the development of Group operations in Vietnam, the Group has sent senior managers to Vietnam to work alongside employees based in Vietnam. Such presence of senior personnel helps to reinforce the philosophy of IT people leading IT people, ensuring that the Group’s methodology and toolkit are being used in a consistent manner and that the review process for employees is done by senior people who are familiar with the relevant performance measures and targets, and are on the ground to help local employees learn and succeed. The Group also plans to establish a larger UK office in the London area and has begun the recruitment of developers using the approach institutionalised in the Group’s business model and executed by the Group’s human resources function. # Continue to expand in Northern Europe and increase market share The Group intends to pursue selective acquisitions in markets that have an advanced digitalisation agenda, including Northern European countries such as Sweden and Finland as well as the Netherlands. Through its --- acquisitions of Mesan AS and Hunter Macdonald Ltd, the Group has recently entered into the Norwegian and UK markets. As a result, the Group does not expect to make further acquisitions in those particular markets, instead focusing on organically growing its presence in these markets in the future. In pursuing acquisition opportunities, in addition to focusing on markets with high digitalisation agendas, the Group intends to focus on ensuring that potential targets have access to the types of strategic customers that the Group targets and that such acquisition targets are agile companies with a strong talent pool. The Group believes that selecting companies on the basis of these criteria facilitates for easier integration and the profitable growth of the business. While looking at new growth opportunities through selective acquisitions is a key focus area of the Group, the Group's Executive Management and Partners will not enter into transactions that they view as incompatible with the Group's unique business model and merit-based performance culture and will generally focus on acquisition targets of a size and nature broadly similar to Mesan AS and Hunter Macdonald Ltd. The Group's Executive Management and Partners are disciplined and dedicated in integrating acquired companies both operationally and culturally in order to facilitate the profitable growth of the business. Generally, the Group believes that full integration of an acquired company from its current state of performance to that of the Group, in terms of being able to match the Group's growth and profitability metrics, takes between three and five years. During that period, the Group gradually transforms and expands the type of services offered by the acquired company as well as its business model to align them with the Group. The integration of Mesan AS in Norway has been ongoing since its acquisition by the Group in November 2016 and was completed, from an organisational, infrastructure and systems perspective, in December 2017. The full benefit potential from this acquisition is expected to be realised by the Group during the next couple of years through expansion and gradual transformation of the Group's customers and services in the Norwegian market. In relation to the integration of Hunter Macdonald Ltd which the Group acquired in October 2017, the Group expects that revenue development and margin expansion in the United Kingdom will be in line with what it has experienced in Norway following the Mesan AS acquisition. However, the Group expects that it will likely take a longer time and require more resources, before Hunter Macdonald Ltd is fully integrated with the Group and can begin to realise the full benefits of the acquisition, due primarily to the current structure of the UK operations with a relatively higher proportion of independent subcontractors delivering development work. ## History and Development The Group was established 18 years ago. André Rogaczewski, Carsten Gomard and Claus Jørgensen have since the foundation of the Group as it is known today, focused on delivering complex business critical IT services through the use of modern technologies, with a heavy focus on strong and timely delivery to its customers. Initially, the Group mainly delivered single point systems such as self-service portals, CRM, e-commerce and collaborative case management systems, and was primarily focused on the Danish market. In 2005, the Group opened its office in Warsaw, Poland, as a sourcing centre, and also started offering maintenance services. In 2006, the Danish private equity firm Axcel became a majority shareholder with a 60% ownership stake alongside the three founders and a number of other key employees. In 2011, Axcel sold its 60% ownership interest in the Group to the founders and other key employees. In 2012, the Group acquired Tieto Enator Danmark, the original developer of the Modulus platform, used widely by Danish labour unions and unemployment funds to manage unemployment payments. In 2013, the Group established a Public sector vertical focusing on building up a high market share in delivering complex public IT systems. At the same time, the Group extended its service offering to include 24/7 IT service management and operations. In February 2016, the Norwegian private equity fund FSN Capital Partners acquired, through the Significant Shareholders, a controlling stake in the Group. Under FSN ownership, the Group has expanded outside of Denmark. With the acquisition of Mesan AS in November 2016, the Group entered the Norwegian market. Most recently, in October 2017, the Group acquired the UK-based group Hunter Macdonald Ltd as an entry platform to the UK market, and to add modern IT infrastructure and cyber security consulting services, as well as a sourcing platform in Vietnam. 117 --- # Key Business Areas # Sectors The following table sets forth a breakdown of revenue, organic revenue and Adjusted EBITA on a segment level as a percentage of overall Group revenue, organic revenue and Adjusted EBITA for the three months ended 31 March 2018 and 2017 and the years ended 31 December 2017, 2016 and 2015. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | (%) Public sector | | | | | | Revenue | 55.3 | 45.8 | 51.6 | 40.9 | 41.1 | | Organic revenue (non-IFRS)(1) | 62.2 | 47.4 | 52.7 | 41.2 | 41.1 | | Adjusted EBITA (non-IFRS)(2) | 50.7 | 34.3 | 39.0 | 32.7 | 38.9 | | Private sector | | | | | | | Revenue | 44.7 | 54.2 | 48.4 | 59.1 | 58.9 | | Organic revenue (non-IFRS)(1) | 37.8 | 52.6 | 47.3 | 58.8 | 58.9 | | Adjusted EBITA (non-IFRS)(2) | 49.3 | 65.7 | 61.0 | 67.3 | 61.1 | (1) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (2) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. The following table sets forth a breakdown of revenue, organic revenue and Adjusted EBITA on a geographic basis as a percentage of overall Group revenue, organic revenue and Adjusted EBITA for the three months ended 31 March 2018 and 2017 and the years ended 31 December 2017, 2016 and 2015. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | (%) Denmark(1) | | | | | | Revenue | 76.8 | 89.5 | 86.2 | 98.7 | 100.0 | | Organic revenue (non-IFRS)(2) | 89.7 | 100.0 | 99.1 | 100.0 | 100.0 | | Adjusted EBITA (non-IFRS)(3) | 87.3 | 91.9 | 89.2 | 99.2 | 100.0 | | Norway | | | | | | | Revenue | 8.2 | 10.5 | 9.5 | 1.3 | — | | Organic revenue (non-IFRS)(2) | 10.3 | — | 0.9 | — | — | | Adjusted EBITA (non-IFRS)(3) | 7.4 | 8.1 | 7.7 | 0.8 | — | | United Kingdom(4) | | | | | | | Revenue | 14.9 | — | 4.3 | — | — | | Organic revenue (non-IFRS)(2) | — | — | — | — | — | | Adjusted EBITA (non-IFRS)(3) | 5.3 | — | 3.1 | — | — | (1) Includes the revenue, organic revenue and Adjusted EBITA from the Group's Danish projects, including revenue generated from the Group's sourcing center in Poland. (2) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (3) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Adjusted EBITA (non-IFRS)" for a reconciliation to EBIT. (4) Includes the revenue, organic revenue and Adjusted EBITA from the Group's UK projects, including revenue generated from the Group's sourcing center in Vietnam. # Public # Overview In the Public sector segment, the Group provides IT services from development to maintenance and operations to both the central government and to local governments consisting of large municipalities and regions. See “—Categories of Services and Solutions” below for further detail on the Group’s IT services. In the --- Danish IT market, IT deliveries to central governments are made directly to the relevant purchasing entities, whereas deliveries to local governments are either made directly to one or more of the 98 municipalities or to KOMBIT. KOMBIT supports local authorities creating and maintaining systems used by all municipalities. In 2015, some IT solutions services relating to social benefits were moved to Udbetaling Danmark (the Danish authority responsible for the collection, disbursement and control of a number of public benefits), which is operated by ATP. The Group has strong relationships with both KOMBIT and ATP, through its involvement in the IT systems used to administer family and housing benefits, social welfare and public pension payments, as well as the maintenance of registries for properties and street addresses, among others. Similarly, the Group provides key IT services to major Danish central government ministries and authorities, such as Skatteministeriet (Danish Ministry of Taxation) ("Skatteministeriet"), Erhvervsstyrelsen (Danish Business Authority) and Arbejdstilsynet (Danish Working Environment Authority) ("Arbejdstilsynet"), Finansministeriet (Danish Ministry of Finance), Justitsministeriet (Danish Justice Department), and Udlændingestyrelsen (Danish Immigration Service). While the Group's customers continue to focus on cost effectiveness generally, the tender process in the Public sector segment has evolved over the last five years, with increased weight being given to the bidding IT service provider's quality of service and execution track record when awarding tenders and less focus on quoted price as the main determinant. The Group also provides IT services from development to maintenance and operations in Norway to Skatteetaten (Norwegian Tax Authority) and Oslo Kommune (Oslo Municipality) and in the United Kingdom to the armed forces, as a subcontractor for Capita, an international business process outsourcing and professional services company, as well as to the Home Office and to the Ministry of Justice, as a subcontractor for Sodexo. ## Public sector segment case study—Skatteministeriet In August 2016, the Group won a contract to develop a new system for ICI, a specially created division within Skatteministeriet, for the collection of all debt, including tax, utility and television license liabilities and fines, owed by Danish citizens to the government. The new system is designed to replace the previous system, Et Fælles Indrivelsessystem ("EFI"), which had never been successfully put into full production resulting in a significant amount of outstanding citizen debt being owed to the Danish state. Utilising a team of over 100 consultants initially on the project and by taking an agile, flexible and iterative approach, the Group rapidly developed and delivered a new debt collection system with the successful first release of the project in April 2017. A further two releases of the debt collection system are scheduled for delivery by the Group in the first quarter of 2018 and the third quarter of 2018, at which point the Group will have replaced EFI. First debt re-payments have already successfully been made under the new debt collection system. ## Contractual framework The Public sector has a high degree of visibility from already announced tenders and is typically driven by multi-year fixed price contracts for the delivery of complex solutions, with a significant share of maintenance and operations revenue. The multi-year nature of contracts in the Public sector makes it an attractive sector for the Group. On average, most large public tender contracts have a duration of approximately five to seven years. The first 12 to 18 months are typically the development phase, which is usually followed by 48 to 72 months of maintenance and operations services. Typically the revenue derived from maintenance and operations services will be approximately 2.5 times the revenue derived in the development phase. Re-tenders of maintenance and operations contracts will typically have higher win-rates compared to the original tenders due to the existing knowledge of the current contract holder, having actually developed the underlying system. While contract structures differ between customers, in 2017 the Group had an approximately even split between fixed price and time and material contracts based on number of contracts and a 71% to 29% split between fixed price and time and material contracts based on revenue in the Public sector segment. Frequently, the Group's Public sector contracts are initially fixed price for the development of the project/IT service and then switch to time and material for the operations and maintenance services of the project/IT service. While the contract structure mix between development and maintenance fluctuates from year to year, the Group believes it will converge over the longer term towards an overweighting of maintenance contracts given the increase in development projects and, as a result, it is anticipated that the Group's share of time and material contracts will increase. 119 --- The Group takes a different approach when selling to customers in the Public sector segment than it uses when selling to customers in the Private sector segment due to the high frequency of tenders and strict regulations around EU tender processes. The EU tender process demands a higher level of investment into the sales process for both the potential project/IT service provider and customer. Tenders delivered in the Public sector segment need to follow rigid formalities and every aspect of the tender has to be formally documented in writing. This often requires the Group to prepare detailed tender offer documents that are responsive to customer criteria and specification requirements in order to be awarded a tender. This complex and time consuming tender process has traditionally favoured the Group's larger and more established competitors, as many of the Group's competitors in the Public sector segment have specialised tender departments, tender managers and organisational units who specifically handle the complex EU tender process. The Group approaches tenders differently than most of its competitors, as it uses integrated sales and delivery teams to prepare the tenders. IT professionals who will be involved in the actual delivery of a project will analyse, scope, describe, estimate and document the tender. This way multiple individual employees with deep skills and knowledge of particular facets of a project or of a particular customer's needs assist in the preparation of certain aspects of the tender, which are then reviewed by more senior employees with greater experience in project planning and delivery. These more senior employees are specially selected to manage and review specific project tenders. While this approach to tenders requires a high-level of discipline and alignment from all of the Group's various employees who are involved in the process, it reflects the Group's interaction with its potential customers and the Group believes that its approach leads to more accurate quotes, considerably reduced risk profile and is generally more efficient in terms of employee hours spent on the preparation and review of tenders than under the approach generally adopted by the Group's competitors, who frequently have dedicated sales teams, who are not involved in the subsequent development and delivery phases. The Group believes this to be a key differentiator that is hard to replicate, as it requires a broader culture of IT people leading IT people. The Group's win rate in Danish public tenders (including new tenders and re-tenders of ongoing contracts) in which it participated was 44%, 72% and 87% calculated as total value of contracts won as a percentage of total maximum potential value of contracts tendered for, in each of the year's ended 31 December 2015, 2016 and 2017, respectively. The total potential value of contracts in which the Group participated in the applicable tender processes was DKK 1.9 billion, DKK 2.1 billion and DKK 3.5 billion in 2015, 2016 and 2017, respectively (Source: EU Tender Database (Tenders Electronic Daily) and Group data). In addition to focusing on winning new tenders, the Group focuses on re-tenders in order to retain existing customers. During 2017, the Group won all re-tenders on which it had the current contract, including re-tenders with Arbejdstilsynet (Danish Working Environment Authority), Motorregistret (Register of Motor Vehicles) (within the Danish Customs and Tax Administration), ("FLIS") (Danish municipalities information management system) and Styrelsen for IT og Læring (National Agency for IT and Learning) ("STIL"). In Norway, the Group has also had recent success in the public sector, including winning tenders such as Oslo Kommune (Oslo Municipality) and Skatteetaten (the Norwegian Tax Administration), where Netcompany Norway AS, even though it had only been part of the Group for six months, managed to secure a place on the large framework agreement as one of five companies engaged on all six subcontracts Netcompany Norway AS bid on. This was accomplished by utilising the Group brand, references and capacity, as well as the approach of its unique business model to integrated sales and delivery. ## Competitive landscape/competitors The Group's competitors in the Danish Public sector segment comprise: (1) large incumbents with established relationships, comprising large international companies, such as DXC Technology (formerly CSC) and IBM, and national companies, such as KMD (that evolved from the early centralised development of municipality solutions) and CGI which each hold between 15% and 40% of total Public sector segment market share, (2) adapting incumbents and agile at-scale companies, comprising regional companies with the scale and scope to compete with the incumbents on large-scale projects, such as Visma, EG and Systematic, which each hold between 3% and 10% of total Public sector segment market share and (3) niche developers, comprising local, niche companies typically specialised in certain technology or focused on smaller projects with individual municipalities, such as Proactive, Delegate, Miracle and Nine, which, on average, each hold less than 1% of total Public sector segment market share. In recent years, the Group has had success in challenging large incumbents. For the year ended 31 December 2016, the Group held market share based on total annual IT spend of approximately 6% and 1.4% of the core Public sector markets in Denmark and Norway (defined as the core public market), respectively. For 120 --- further details on the core Public sector markets, see “Industry—The Next-Generation IT Services Market and Trends—The Danish IT Services Market—Danish Public Market” and “Industry—The Next-Generation IT Services Market and Trends—The Norwegian IT Services Market—Norwegian Public Market”. The Group is now well positioned to increase its market share in the Public sector segment with a proven project win and delivery track-record in the last two years, as well as strong customer advocacy. The Group’s win rate with respect to tenders in the Public sector segment has continued to increase. In addition, in 2016 and 2017 the Group has achieved pre-qualification in almost all tenders in which it participated, i.e., being one out of three to five companies allowed to make bids on the respective tenders. ## Key focus areas The Group’s key focus within the Public sector segment is to continue to lead the digitalisation agenda, thereby continuing to disrupt and replace traditional incumbents with a focus on large and complex projects within KOMBIT and ATP, the Danish central government and the largest municipalities and regions in Denmark. In Norway, the Group is building up its market position, but is still considered to be a relatively new and upcoming player. In this market, the Group intends to continue to strengthen its position by leveraging its local and Group knowledge and experience, as well as its unique and extensive customer reference base in the Danish Public sector market. To date, this has already resulted in the awarding of two key contracts to the Group during the summer of 2017, with Oslo Kommune and Skatteetaten. In the United Kingdom, the Group intends to leverage its knowledge and experience of the Danish market and bid on government public tenders in a market that is already large and that the Group expects to grow further as a consequence of the UK government’s increased digitalisation agenda (including in connection with Brexit). The Group is working on developing its relationships with the relevant government agencies and organisations in order to enhance its current good position even further in order to increase its tender win rates and to utilise its existing strong contacts and engagements within key UK ministries, such as the Home Office, the Ministry of Defence and the Ministry of Justice. ## Private ### Overview In the Private sector segment, the Group provides IT services from development to maintenance and operations for mid- to large-sized customers which are often leaders in their respective industries, such as, in Denmark, TDC, Falck, Solar, Novo Nordisk, Ørsted, PensionDanmark and AO Johansen; in Norway, Norgesgruppen, DNB and Møller Gruppen, and in the United Kingdom, Airbus, Rolls Royce and Meggitt. The Group provides IT services from development to maintenance and operations in the Private sector segment to membership organisations, such as trade unions, with very complex business rules governed by unemployment benefits laws. See “—Categories of Services and Solutions” below for further detail on the Group’s IT services. ### Private sector segment case study—Copenhagen Airports Since 2012, Copenhagen Airports (“CPH”) has been a strategic client of the Group. CPH is the largest airport operator in the Nordic region with more than 29 million passengers annually, approximately 21,000 service personnel and 2,400 employees. The number of passengers has grown 25% since 2012 and with limited options to expand due to physical constraints, CPH considers every opportunity to optimise its operations and to accommodate increased customer demand for a strong retail experience as well as unique customer service. Using artificial intelligence, the Group has developed an advanced data operation system for CPH that provides information across all operating areas with high accuracy for estimated baggage arrival times. Precise estimated baggage arrival times are critical to optimally manage passenger flow through the airport. In addition, when detailed customer preference data is also incorporated into the total solution, CPH will be able to direct passengers to either baggage claim or retail areas depending on the estimated baggage arrival time. As a result, passengers have a better airport experience and CPH is able to manage its physical space more efficiently. CPH now has access to a new level of information flows and is able to optimise its internal operations, providing a much better service for travellers and their customers. ### Contractual framework On average, most large Private sector segment contracts have a duration of approximately 12-18 months and larger share of time and material engagements reflecting a fundamental difference in the purchasing pattern for 121 --- Private sector segment customers compared to Public sector segment customers. Private customers typically renew their ongoing contractual engagements with the Group meaning a higher proportion of revenue will therefore be maintenance-based, which is also different from the dynamics in the Public sector segment. While contract structures differ between customers, in 2017 the Group had an approximate 10%/90% split between fixed price and time and material contracts in the Private sector segment based on the number of contracts. In the Private sector segment, the Group is in the process of transitioning out of smaller, niche solutions based on time and material contracts into more complex and multi-year, contract engagements. These projects typically involve more innovation and allow the Group to better utilise competencies to solve complex problems. These projects also tend to have higher strategic value to customers and more limited competition from other IT services companies in the Private sector segment, as they require a higher degree of agility and scaling capacity. This frequently justifies a higher price premium compared to more commoditised solutions. The Group's sales approach in the Private sector segment differs from its competitors in two aspects: - All sales activities are conducted by integrated sales and delivery teams, that are the same people who deliver the actual IT projects (this is the same approach the Group uses in the Public sector segment). - Most new sales activities are initiated in close cooperation with existing customers through referrals. Due to the increasing complexity of many enterprise IT systems, the sales process has itself become more complex and is now characterised by the inclusion of high-end competency at many levels, including both technical and within the customer's particular business domain. As a result, it is now more important to demonstrate actual knowledge and detailed insight to a prospective customer than through more traditional sales and marketing focused efforts with limited customer or domain expertise and knowledge. There is also an increasing focus by customers on agile deliveries and digitalisation solutions, well suited to the services offered by, and the established reputation of, the Group. By focusing on these aspects in its sales approach and on delivery of quality solutions within budget to its customers, the Group has been able to increase its relative share of revenue generated from customers with an annual IT spend of over DKK 10 million in the Private sector segment in Denmark, from 40% of total revenue in the Private sector segment in the year ended 31 December 2015 to 53% of total revenue in the Private sector segment in the year ended 31 December 2017. Typically most tenders in the Private sector segment are a combination of several meetings and sales presentations to potential customers. Frequently, the Group conducts a pre-analysis phase with a prototype or proof of concept being one of the main sales deliverables that is shown to the prospective customer. If the Group is successful and wins the particular tender, the same team then continues to deliver the remaining phases of the project/IT service in conjunction with the additional resources necessary to successfully develop the project/IT service to the customer's specifications and requirements. ## Competitive landscape/competitors The Group's competitors in the Danish Private sector segment comprise: (1) large incumbents, comprising large companies that have generally been in the market for more than 20 years and tend to focus on larger, less complicated projects with revenues primarily driven from maintenance and operations, such as Capgemini, IBM and Tata, which each hold between 5% and 10% of total private sector market share, (2) adapting incumbents, comprising companies focused on closing the gap by offering simple, innovative IT services with a limited backlog of larger legacy work, such as Accenture, NNIT and EG, which each hold between 2% and 5% of total private sector market share and (3) niche companies, comprising small companies with niche focus on either specific verticals or services, such as Systematic and AlfaPeople among many others, which, on average, each hold less than 1% of total private sector market share. For the year ended 31 December 2016, the Group held market share based on total annual IT spend of 7% and 1.9% of the core private markets in Denmark and Norway, respectively. ## Key focus areas The Group's key focus within the Private sector segment is to become a leader among mid- and large-sized companies as well as membership organisations, such as trade unions, with an annual external IT and digital services spend of more than DKK 10 million. The Group intends to focus on delivering large and complex projects on time, on budget and within scope, thereby building a high share of wallet with selected core customers. The Group's goal is to benefit from the "tailwind" that typically follows increased private spend on innovation and differentiation. The Group aims to win a few accounts per year among mid- and large-sized 122 --- companies, enabling it to firmly establish a position and build scale with large customer accounts. Part of the Group's key focus is to complement the core customers in the Private sector segment with additional mid-sized accounts, for which the Group will take an end-to-end project ownership approach. In these mid-markets, the Group's aim is to win "full scope" contracts pursuant to which it will be responsible for providing customers with a full range of services. ## Categories of Services and Solutions The Group provides end-to-end next-generation IT services to its customers, including development, maintenance and operations. The Group is legacy free and technology agnostic which means that its service offering is not restricted to older, more traditional systems or technologies, or limited to a particular technology or platform. The Group will deliver business critical IT solutions using any modern platform or technology preferred by its customers. The Group's revenue from the Private sector segment is derived from development, and maintenance and operations, which comprised 13.8% and 23.9%, respectively, of the Group's total organic revenue for the three months ended 31 March 2018 and 15.5% and 31.8%, respectively, of the Group's total organic revenue for the year ended 31 December 2017. Development, and maintenance and operations for the Group's Public sector segment comprised 27.9% and 34.3%, respectively, of the Group's total organic revenue for the three months ended 31 March 2018 and 33.2% and 19.5%, respectively, of the Group's total organic revenue for the year ended 31 December 2017. The following table sets forth a breakdown of the revenue from the Group's development and maintenance and operations services on a segment level as a percentage of overall Group revenue as well as the total revenue derived from development, maintenance and operations services in each segment for the three months ended 31 March 2018 and 31 March 2017 and the years ended 31 December 2017, 2016 and 2015. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million, unless otherwise indicated | | | | | | Public sector | | | | | | | Revenue derived from development | 44.8% | 57.4% | 60.3% | 45.2% | 43.9% | | Revenue derived from maintenance and operations | 55.2% | 42.6% | 39.7% | 54.8% | 56.1% | | Total revenue derived from development, maintenance and operations | 285.8 | 152.6 | 730.2 | 368.3 | 311.5 | | Private sector | | | | | | | Revenue derived from development | 41.2% | 29.4% | 30.1% | 51.2% | 47.1% | | Revenue derived from maintenance and operations | 58.8% | 70.6% | 69.9% | 48.8% | 52.9% | | Total revenue derived from development, maintenance and operations | 231.2 | 180.3 | 685.9 | 531.3 | 446.6 | --- The following table sets forth a breakdown of the organic revenue from the Group's development and maintenance and operations services on a segment level as a percentage of overall Group organic revenue as well as the total organic revenue derived from development, maintenance and operations services in each segment for the three months ended 31 March 2018 and 31 March 2017 and the years ended 31 December 2017, 2016 and 2015. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million, unless otherwise indicated | | | | | | Public sector | | | | | | | Organic revenue derived from development (non-IFRS)(1) | 44.8% | 60.2% | 63.0% | 45.4% | 43.9% | | Organic revenue derived from maintenance and operations (non-IFRS)(1) | 55.2% | 39.8% | 37.0% | 54.6% | 56.1% | | Total organic revenue derived from development, maintenance and operations (non-IFRS)(1) | 275.8 | 141.2 | 649.1 | 365.6 | * | | Private sector | | | | | | | Organic revenue derived from development (non-IFRS)(1) | 36.6% | 33.9% | 32.7% | 51.5% | 47.1% | | Organic revenue derived from maintenance and operations (non-IFRS)(1) | 63.4% | 66.1% | 67.3% | 48.5% | 52.9% | | Total organic revenue derived from development, maintenance and operations (non-IFRS)(1) | 167.4 | 156.6 | 583.0 | 522.3 | * | (1) Represents revenue adjusted for the impact of constant currency adjustments and acquisitions. See "Operating and Financial Review—Non-IFRS financial measures and other key performance indicators—Organic revenue/organic revenue growth (non-IFRS)" for a reconciliation to revenue. (*) Not meaningful. ## Development The Group offers development services to its customers within the Private and Public sector segments. Development involves the design, development and implementation of complex business critical IT solutions in the digital transformation areas of systems modernisation, system of differentiation and systems of innovation projects. A focus area within development is systems modernisation. The Group helps its customers to digitally transform their systems from older legacy based systems and solutions of various kinds, which were internally developed or based on older legacy applications. The implementation of the ICI project as described above, is an example of such a systems modernisation. See “—Key Business Areas—Sectors—Public—Public sector segment case study—Skatteministeriet”. As part of development, the Group also offers system integration services by helping customers migrate from legacy solutions to standardised solutions. System integration is typically centred on customers with large governance and service complexity, for example in the finance and telecom (billing) industries, and the solutions that the Group provides its customers are frequently described as being business critical for its customers. This also includes establishing the digital platform for customers, including customer centric systems, ecosystem integration and data insight. Further, the Group develops innovative bespoke, complex and business critical IT solutions, often initiated through a "Design Thinking" approach that seeks to uncover potential solutions that could provide customers value in terms of a digital advantage. The solutions are developed in fast-paced project teams using modern technologies and then validated by customers. Many of the projects employ next-generation technologies such as predictive analytics and artificial intelligence to recognise complex patterns and develop complex algorithms using machine learning. ## Maintenance and operations The Group has been offering maintenance of IT solutions delivered by the Group to its customers since 2005 and operations of its customer's IT platforms and systems since 2013. Through its maintenance services, the Group helps clients realise significant ongoing business and cost benefits through its deep and comprehensive understanding of clients' systems landscape, the IT solutions it implements and helps keep customer systems up to date with new and changed business and organisational demands. --- 125 # Maintenance The Group’s maintenance services are a natural follow on from any IT service. Maintenance services are delivered by the Group through: (1) extending the work of the development team after the initial project, by providing new releases and support, (2) its dedicated application management centre with more than 160 employees focused on providing maintenance and services and (3) its employees throughout the various delivery units, where employees perform both development and maintenance tasks. Customers who select the Group as an IT services provider frequently also enter into a maintenance agreement after the IT system has been delivered and is in use. The principal component of the Group’s maintenance services consists of maintaining the original systems and solutions delivered by the Group, but also in some cases, systems and solutions originally developed by the customer itself or by a third party. A significant amount of the Group’s maintenance services contracts are multi-year contracts covering the day-to-day management of customers’ IT systems. In most instances relating to large system implementation programs, the maintenance of an IT system may involve large enhancement projects that then remain with the Group team that originally built the solution. In this case, maintenance services are not moved to the Group’s application services centre but remain with the team and the delivery unit that managed the project initially (not necessarily at the customer site), which will then for several years maintain and further develop the solution. This ensures that any loss of knowledge is minimised when a project is handed over from one team to another, ensuring that the team with the most insight and knowledge of the project remains in place, significantly increasing the efficiency in maintaining the solution and minimising the risk of introducing errors. Depending on the size and complexity of the solution, maintenance agreements can vary from a small monthly fee accompanied by an agreement with the Group to provide assistance invoiced by the hour, to having large teams of full time application management professionals allocated to the customer on a yearly basis, all the way up to having significant teams allocated to the customer on multi-year contracts. # Operations In addition to maintenance, the Group has been offering operations services to its customers since 2013. The Group originally started offering these services in order to gain market share in the Public sector segment, where it needed to be able to offer turnkey tenders for the entire operation of customer systems, including providing operations services. Operations services involve day-to-day operational management for customers of Group developed IT services. Technological developments, including growth in cloud-based IT services, opened up a more flexible and cost effective way for the Group to offer operations services to its customers. As a result of the modern solutions offered by the Group that build on new technologies, the Group is able to offer operations services to customers that do not require large-scale data centres to operate. The more traditional organisational set-up of IT services providers is based on two separate teams in charge of creating and operating IT solutions, a development team and an operations team, often with competing goals and focus (for example, functionality and features versus stability of servers, networks and hardware). Instead of following the traditional organisational set-up where classic operational IT specialists monitor servers, network and hardware, the Group has built a “DevOps” center, where the operations services are handled by teams with both systems developers and operations specialists. The Group offers customers day-to-day operational management primarily of systems and solutions it has developed or where the Group is already providing application management to a customer. The Group currently provides operations services for more than 100 customer systems in both the Public and Private sector segments. As at 31 March 2018, the Group ran approximately 3,000 servers and had a storage area network capacity of more than 3,500 TB of storage capacity from two data centres based in Ballerup and Glostrup, which feature automatic capacity “over-flow” capabilities and have experienced operating “up-time” of 99.99% from 31 March 2015 through to 31 March 2018. # Customers The Group’s five largest customers generated approximately 37.8% and 33.3% and its ten largest customers generated approximately 48.8% and 43.7%, of total revenue in the three months ended 31 March 2018 and in the year ended 31 December 2017, respectively. --- The Group conducts a number of annual customer satisfaction surveys which help to ensure focus on customer satisfaction. The Group uses the results of these customer satisfaction surveys to monitor and improve its relationship with its customers. As at 31 December 2017, the Group had a NPS of 32% in the Public sector, which was 58 percentage points above that of its competitors at -26% on average, and a NPS of -4% in the Private sector, which was 31 percentage points above that of its competitors at -35% on average. In the Private sector, the Group has a particularly strong NPS among its large customers with an IT spend in total (including IT spend outside of the Group) of over DKK 100 million per year, at 33% as at 31 December 2017. Over time, the Group has turned a large portion of its customer relationships into strategic partnerships resulting in an expansion in the number and diversification of the types of IT services delivered by the Group to its customers. In the year ended 31 December 2017, 90.6% of revenue in Denmark was generated from existing customers, defined as those customers from who the Group derived revenue in the previous year, in the year ended 31 December 2016 and 77.4% of the revenue in 2017 was generated from customers who have been with the Group for more than three years. ## Sales and Marketing The same organisational units are responsible for both sales and project delivery at the Group. This approach requires certain personal and organisational capabilities, but the Group believes that the benefits are significant as the people responsible for sales will be the same people responsible for delivering the solution and therefore are best positioned to both formulate the most realistic proposal and to be responsive to follow-up questions from the customer as and when they arise. For further details, see “—Key Business Areas—Sectors—Public—Contractual framework” and “—Key Business Areas—Sectors—Private—Contractual framework”. ## Vendor Relationships and Strategic Partnerships The Group is technology agnostic, but maintains a variety of strong collaborative partnerships with key software, hardware and platform vendors in order to provide IT services that incorporate, integrate or modify technology from such third-party vendors. Partner engagements may be based on joint business plans that include customer targeting, marketing efforts, training employees and cultivating strong executive-level working relationships. The Group considers such relationships important to its development efforts and an important part of its business strategy. The possibility of new vendor relationships and strategic partnerships is constantly monitored by the Group once new third-party vendors gain an appropriate level of market share. The Group enjoys a strong market position in Denmark, and believes that most of the relevant third-party vendors actively pursue the possibility of partnerships with the Group. Once entered into, these partnerships can often then be leveraged in other markets. Strategic partnerships are long-term, multi-year engagements with partners with significant market positions in the Group's primary markets and where a significant part of the IT services the Group develops are based on the partner's technologies. The Group maintains a number of strategic partnerships, including with Microsoft and Oracle. The Group is a Microsoft Gold Certified Partner, SalesForce Gold Certified Partner and Oracle Partner, and its employees have certifications from various technology partners (including Microsoft and Oracle). ## Employees The quality and dedication of the Group's IT personnel are critical to the Group's success. The Group believes that the quality and level of service that its employees deliver are among the highest in the IT services industry. The Group believes its unique and accelerated career development programme, merit based performance culture, differentiated management model, as well as its reputation and track-record for successfully delivering complex, business-critical IT development projects have all enabled it to attract, recruit and retain some of the best available young and talented university graduates with IT and science related degrees. The Group is known among potential candidates as an excellent workplace to build a career, among the best and brightest, with some of the most interesting projects and empowering jobs and where young ambitious people grow and progress faster than with most other employers in the industry. Through this attractive employee value proposition, combined with word of mouth employee referrals, extensive employer branding activities and partnership programmes with certain of the top universities in Denmark, the Group is able to continue its recruitment of young ambitious top talent. 126 --- The Group's continuing ability to attract such talent is critical to its continued success. In 2017, 86% of the Group's new hires had bachelor (or higher) degrees and approximately 68% of its consultants, 75% of its senior consultants, 86% of its managers, 89% of its principals and 100% of its Partners had an IT background or significant experience within the IT industry. The Group firmly believes in IT people leading IT people. As outlined further below, the Group's talent and career development programme is delivered through the Netcompany Academy and is designed to continuously monitor and develop its employees. It is focused on attracting and building top talent through an accelerated merit-based career model. The Group offers continuous, dedicated, personal and professional career counselling, mentoring and training throughout each individual employee's career from consultant through to Partner. The Group constantly monitors, maintains and manages its fast growing organisation, through monthly performance meetings between Executive Management and individual delivery unit Partners. In addition, Executive Management meets monthly to discuss personnel and human resource issues across delivery units. These meetings are supported by a monthly organisational review report with detailed information on headcount, recruitment, employee churn and employee well-being. ## Current FTEs The Group has experienced high growth in the number of employees since its inception. The following table sets forth the Group's FTEs by location on the dates presented. As at 11 May 2018 (the most recent practicable date prior to the date of this Offering Circular), the Group had 1,751 FTEs (excluding freelancers in Denmark and Norway). | Region | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Denmark(1) | 999 | 763 | 951 | 707 | 608 | | United Kingdom(2) | 263 | — | 252 | — | — | | Poland | 194 | 121 | 173 | 91 | 52 | | Norway(1) | 141 | 110 | 141 | 111 | | | Vietnam | 121 | — | 110 | — | — | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Total(3) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Does not include freelancers, as such personnel are not a prominent feature of the Danish or Norwegian IT systems and solutions labour market. (2) Includes subcontractors, as such personnel are a prominent feature of the United Kingdom IT systems and solutions labour market. (3) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. The Group's sourcing centers in Poland and Vietnam are not traditional outsourcing centers, but rather provide the Group with additional large sourcing pools of skilled employees who are able to work together as part of integrated project teams with all of the Group's employees based in other locations all supported by virtual and physical IT environments. The Group believes that it will continue to increase the number of employees based in its sourcing centres over time to meet the needs of its future growth. The following table sets forth the Group's customer-facing FTEs, non-customer-facing FTEs and total FTEs at year-end for the periods indicated. | | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Customer-facing FTEs(1) | 1,613 | 952 | 1,534 | 869 | 631 | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Non-customer-facing FTEs | 105 | 44 | 93 | 40 | 29 | | Total FTEs(2) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. (2) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. ## Headcount scaling The Group's growth and continued development requires it to continue growing its employee base. As part of the Group's performance culture and career development model, the Group plans its headcount growth and --- scaling based on a consultant to manager leverage ratio that reflects its project and team organisation on all customer projects. This has been a stable principle of the Group's business model since the Group's inception. # Career development programme As illustrated in the graphic example below, the Group's career development programme is carefully designed to continuously monitor and develop each individual employee's professional and personal skills. The overall aim is to continuously accelerate and facilitate each individual employee to keep growing, develop new professional, personal and leadership skills, take on more responsibility and perform better. Through regular performance appraisals and active mentoring, new areas of individual professional and personal development are constantly identified, leading to new and increasingly more complex tasks, assignments and responsibilities for each employee. This particular program applies for the Danish development organisation and similar models exist for the other parts of the Group. ![img-0.jpeg](img-0.jpeg) THE GROUP'S CAREER DEVELOPMENT PROGRAM OFFERS A STRUCTURED CAREER PATH WITH SPECIALISATION AFTER INITIAL NEW-STARTER LEVEL | Career tracks | % of total consultant staff 2017 | Description | | --- | --- | --- | | Consultants & Test Specialists | ~40% | • New junior hires start as generalists before specialization into either Specialist, Generalist, or Architect consultants | | Architects | ~8% | • Technical expertise in the management of technical architecture and software development | | Generalists | ~35% | • Project management, sales, relations, management of client expectation | | Specialists | ~6% | • Development of domain expertise, acquire profound practical knowledge and be a technical programmer | | Others (not illustrated) | ~13% | • Analysts, Interface or System consultants, etc. | The Group's career development programme encompasses: - Carefully designed role descriptions defining professional, personal and leadership role attributes for all roles at all career levels. Different career tracks are designed to support the different roles needed to deliver complex IT projects and to accommodate and support individual career preferences for generalist project managers, architects, technology and domain specialists etc. - Detailed performance appraisal templates supporting all career model roles to facilitate performance feedback and regular appraisal meetings. All employees are given regular and detailed performance feedback from the experienced IT professional direct reports, ensuring both individual relevance while enforcing common criteria across all employees. - Mentoring scheme and templates to facilitate regular mentoring meetings to discuss long-term career development planning and counseling, with relevant and more experienced IT professionals within the same career track. - On-the-job training through carefully and individually selected project assignments, based on individual feedback from project performance appraisals and the mentoring scheme. - Mandatory and optional Netcompany Academy training courses and certification. --- The following table sets forth the breakdown of the Group's FTEs on a professional role level on the dates presented. | Employees | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Partners | 28 | 19 | 30 | 19 | 15 | | Principals | 48 | 27 | 48 | 28 | 22 | | Managers | 211 | 168 | 235 | 170 | 134 | | Senior Consultants | 450 | 288 | 437 | 271 | 198 | | Consultants | 634 | 416 | 535 | 353 | 245 | | Administrative | 105 | 44 | 93 | 40 | 29 | | Trainees | 45 | 33 | 70 | 29 | 18 | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Subcontractors | 197 | 0 | 180 | 0 | 0 | | Total(1) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. ## Netcompany Academy The Netcompany Academy is the Group's dedicated and highly specialised employee training programme. It is designed to support rapid and focused career and skill development in the Group's career development programme. All Netcompany Academy training courses are designed and developed by experienced Group executives, managers and systems architects. Each training course is designed to accelerate particular skill development in specific roles, in different career tracks within the career development model. This ensures conformity across projects and builds and promotes common Group culture. The courses are continuously evaluated and updated to reflect changes in technologies, methodologies and tools. Employee feedback ensures continuous input from customer projects and maintenance teams. Instructors who teach Netcompany Academy courses are typically Group seniors or managers with extensive relevant hands-on experience. The mandatory training courses ensure that all employees receive uniform training, tailored to the Group's project management model and methodology. Optional training sessions, external courses and conferences are also offered at manager level to complement the mandatory element of the Netcompany Academy. Netcompany Academy offers all employees the opportunity to participate in relevant vendor certification programmes. ## Netcompany After Dark After Dark is the Group's platform for employee social events, providing strong cultural glue across delivery units and seniority and allowing employees to meet through informal events, parties and sports activities. After Dark offers an extensive number of activities, all fully sponsored by the Group and operated on a voluntary basis by the employees themselves. ## Employee churn Historically, the yearly churn of Group employees, both voluntary and involuntary, has been stable at approximately 17%. This level of attrition is in line with the Group's target attrition rate to maintain its effective pyramid structure in line with a typical high-performance management consultancy up-or-out model. ## IT Audit Standards Within the Group's operations services division (aimed at external customers) and application services, the Group regularly undertakes external audits and obtains ISAE 3000 and ISAE 3402 IT certifications. These certifications are focused on operations that the Group is conducting of clients' IT environments (and to some extent application services) controls and processes. ## Material Contracts ### Material agreements entered into outside the ordinary course of business Save as disclosed below, there are no contracts (other than those entered into in the ordinary course of business) to which the Group is a party which (i) are, or may be, material to the Group and which have been entered into in the two years immediately preceding the date of this Offering Circular; or (ii) contain any obligations or entitlements which are, or may be, material to the Group as of the date of this Offering Circular. --- 130 # Material acquisitions ## Acquisition of Mesan AS On 31 October 2016, the Group entered into a share purchase agreement with the owners of the Norwegian based IT services company, Mesan AS, relating to the acquisition of 100% of the share capital of Mesan AS for an aggregate consideration of DKK 195.6 million. Adjusting for the cash position in Mesan AS at the closing of the transaction, the net consideration paid by the Group for the company was NOK 205.8 million (DKK 168.2 million). The transaction was completed on 22 November 2016. See “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations—Acquisitions”. Pursuant to the share purchase agreement, some of the Mesan AS selling shareholders who were part of the company’s management team, reinvested a portion of the proceeds from their sale of shares, as well as prepaid bonuses, extraordinary bonuses and some own funds, into the Group. Certain of the Mesan AS selling shareholders have covenanted pursuant to the share purchase agreement that they would not directly or indirectly compete with the Group’s business, solicit for employment certain key employees or encourage customers and/or suppliers to terminate or negatively alter their commercial relationship with the Group’s business for a period of 24 months following closing of the transaction. The acquisition has allowed the Group to further its expansion strategy across Northern Europe and into Norway, which is an attractive market for the Group given its similar characteristics to the Danish market and high digitalisation. The integration of Mesan AS into the Group has now been completed and was characterised by the following integration processes: 1. Marketing and sales—aligning sales messages, increasing awareness of the Netcompany brand and integrating sales and delivery responsibility, to enable the Group to sell larger and more complex IT projects in Norway. 2. People and organisation—implementing the Group’s employer branding programme to attract and scale recruitment of top class IT talent and to implement the Group’s career development model encompassing: performance appraisals, the mentoring scheme, Netcompany Academy and centres of excellence. 3. Quality management—implementing a quality management roadmap, goals and toolkit for documentation, aligning with Group methodology and project tools. 4. Finance management—creation of a 2017 budget and alignment of financial reporting, integration of systems and finance and implementation of a new ERP system. 5. Infrastructure—aligning Group infrastructure, hardware, policies and common systems. See “Risk Factors—Risks Relating to the Group’s Business and Operations—The Group may not be successful at identifying, acquiring or integrating other businesses or technologies”. ## Acquisition of Hunter Macdonald Ltd On 13 October 2017, the Group entered into a share purchase agreement with the owners of the United Kingdom based IT services company, Hunter Macdonald Ltd, relating to the acquisition of 100% of the share capital of Hunter Macdonald Ltd for an aggregate consideration of GBP 40.3 million (DKK 345.9 million as at the date of closing of the transaction). The transaction was completed on 25 October 2017. See “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations—Acquisitions” Pursuant to the share purchase agreement, the aggregate consideration was partly paid in cash and partly in NC TopCo A/S shares to Hunter Macdonald Ltd selling shareholders who were part of the company’s management team. The Hunter Macdonald Ltd selling shareholders have covenanted pursuant to the share purchase agreement that they would not directly or indirectly compete with the Group’s activities or solicit, entice away or attempt to solicit or entice away customers or suppliers of the Group for a period of 24 months following closing of the transaction, or solicit for employment employees for a period of 6 months following closing of the transaction. The acquisition of Hunter Macdonald Ltd was made as part of the Group’s expansion strategy across Northern Europe and as an entry into the United Kingdom, which is an attractive market for the Group given its large size and developed market for IT services. --- As of the date of this Offering Circular, a number of system integration tasks have been completed in order to bring Hunter Macdonald Ltd onto the Group's IT platform. The Group's standard integration plan, which was used during the integration of Mesan AS, is being used for the integration of Hunter MacDonald Ltd and is progressing in line with the Group's expectations. See “Risk Factors—Risks Relating to the Group’s Business and Operations—The Group may not be successful at identifying, acquiring or integrating other businesses or technologies”. ## Reorganisation Agreements For a description of the Reorganisation Agreements relating to the IPO Reorganisation and the Post-IPO Reorganisation, see “Reorganisation”. ## Financing Arrangements For a description of the Group’s financing arrangements, see “Operating and Financial Review—Liquidity and Capital Resources—Financing Arrangements and Commitments”. ## Underwriting Agreements For a description of the Underwriting Agreements relating to this Offering, see “Plan of Distribution”. ## LTIP Equity Swap For a description of the LTIP Equity Swap see “The Board of Directors, Executive Management and Key Employees—Incentive Programmes”. ## Intellectual Property Rights The Group relies on a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect its proprietary technology and its brand. The Group holds a trademark for its document management system (GetOrganized) and also leases a number of internet domains, the most important of which is www.netcompany.com. The Group relies on open source software (“OSS”) for a large number of the IT services it provides customers. ## Legal Proceedings, Investigations and Other Regulatory Matters The Group may from time to time be subject to claims and various legal proceedings arising in the ordinary course of business. The Group has not within the last twelve months from the date of this Offering Circular been, and is not currently, party to or aware of any threatened governmental, litigation, administrative, arbitration or dispute proceedings which could in the future have, or have had in the recent past, a material adverse effect on the Group’s business, reputation, results of operations or financial condition. ## Real Property The Group’s headquarters are located at Grønningen 17, DK-1270 Copenhagen K, Denmark, where the Group leases office space of a total of approximately 6,500 square meters. The Group also leases other offices and sales facilities in Aalborg and Aarhus C in Denmark and in other markets in which the Group is represented, including in Oslo, Norway in Warsaw, Poland, in Derby and Reading, United Kingdom and in Ho Chi Minh City and Hanoi, Vietnam. The Group does not consider any real property to be material to the Group’s operations. The Group believes that the properties are generally adequate for their present needs and believes that suitable additional or replacement space would be available to the extent required. None of these properties are subject to material easements that prevent or restrict the Group’s current business activities or will require major investments or incur significant costs going forward. ## Insurance The Group’s insurance coverage covers risks associated with its business, including property and business interruption insurance; business travel insurance; corporate responsibility, professional indemnity and employee 131 --- liability insurance; accident and workers' compensation insurance; D&O insurance and product liability insurance. The Executive Management believes that the Group carries insurance of a type customary for the industry in which the Group operates and at a level which is generally adequate. ## Regulation The Group is subject to EU data protection legislation (Directive 95/46/EC as implemented under Danish law). In May 2018, new requirements related to the treatment of personal data and sensitive personal data will become effective within the EU under a new EU law, the General Data Protection Regulation (EU 2016/679). In addition, many of the Group’s customers are subject to industry-specific regulations, and accordingly these customers’ use of the Group’s services is subject to industry regulation. Some customers are also public entities and are subject to Danish and EU tender process rules. In addition, in large Private sector segment projects, although they are not subject to the same procurement rules, tender procedures are used to select suppliers. ## Risk Management The Group takes a structured approach towards risk management and identified risks are discussed regularly, including formally at the quarterly meetings of the Executive Management and the Board of Directors. The level of significance that the Group gives to a particular risk is based on the assessment of the risk based on past events and the specific risk at hand. During 2018, the Group plans to implement an IT-based tool to assist in the identification, mitigation and management of the Group’s risks. This tool will also facilitate and automate the Enterprise Risk Management process and reporting across the Group and assist in significantly escalating relevant risks from the employee level up through the Risk Manager (Group Finance), the Executive Management and the Audit Committee to the Board of Directors. ## Corporate Social Responsibility and Environment The Group takes corporate responsibility seriously and strives to conduct its activities in a socially responsible way. This includes its attempts at minimising the environmental implications of the Group’s operation and also the Group’s Corporate Social Responsibility (“CSR”) efforts relating to the fight against corruption as well as efforts relating to human rights and labour rights. The Group has therefore joined the UN’s Global Compact. The respective report of the ultimate parent company prior to the IPO Reorganisation, NC TopCo A/S, can be downloaded from: https://www.unglobalcompact.org/what-is-gc/participants/18841-Netcompany-IT-Business-Consulting#cop. Information included on this website does not form part of and is not incorporated into this Offering Circular. 132 --- REORGANISATION # IPO Reorganisation and Post-IPO Reorganisation Steps The IPO Reorganisation described below will be effected prior to Admission but after the publication of this Offering Circular, and the Post-IPO Reorganisation will be effected after Admission. The purpose of the IPO Reorganisation is to modify the corporate structure and ownership from a private ownership structure to a structure suitable for a publicly traded company. The disclosure below, including the structure charts referred to under the headings “Group Structure as at the Date of this Offering Circular” and “Group Structure after Completion of the IPO Reorganisation” are presented to show the historical corporate structures immediately before the corporate structure was adopted which will be in place upon Admission. The diagram “Group Structure after Completion of the Post-IPO Reorganisation” is thus the only relevant diagram describing the group structure in which investors acquire ownership interests through the purchase of Offer Shares. The Company, NC TopCo A/S, the Significant Shareholders and the other existing shareholders of NC TopCo A/S, including NC ShareCo ApS, the joint holding company of certain of the MIP Participants and Employee Shareholders, (the Significant Shareholders and the other existing shareholders of NC TopCo A/S are jointly referred to as the “Existing Group Shareholders”) as well as the shareholders of NC ShareCo ApS and the shareholders of NC ManCo AS, the joint holding company of the Norwegian MIP Participants and Employee Shareholders, have prior to the date hereof entered into certain reorganisation agreements (the “Reorganisation Agreements”), in which it was agreed that the following reorganisation steps (together the “IPO Reorganisation”) be carried out in connection with pricing and prior to Admission and subject to the Offer Price being determined: (a) Settlement of Matching Shares: Those of the MIP Participants and Employee Shareholders who are entitled to matching shares under the Group’s matching shares incentive programme in NC TopCo A/S will be granted such matching shares (“Matching Shares”) in the form of bonus shares issued by NC TopCo A/S. (b) Contribution of the Group to the Company: The Significant Shareholders and the other Existing Group Shareholders will exchange all shares in NC TopCo A/S (including Matching Shares) for new Shares in the Company via a share-for-share exchange. After the share-for-share exchange, there will only be one share class in the Company. The Company will hereafter be the parent company of the Group. The value of the Significant Shareholders’ and the other Existing Group Shareholders’ new Shares in the Company will correspond to the value of their shares in NC TopCo A/S since the value of the different share classes in NC TopCo A/S will be included in the calculation of the number of new Shares in the Company to be allocated to each of the Existing Group Shareholders in the share-for-share exchange. Prior to the share-for-share exchange, a capital decrease to zero will be carried out in NC TopCo A/S to ensure that the Existing Group Shareholders’ respective ownership stakes in the Company correspond to their current ownership stakes of NC TopCo A/S. The nominal share capital of the Company after the completion of the share-for-share exchange will be DKK 50,000,000, whereas the allocation of the new Shares between the Existing Group Shareholders will not be fixed until the final Offer Price has been determined. See “Ownership Structure and Selling Shareholders—Table of shareholders” for an overview of the Existing Group Shareholders’ Shares in the Company following the IPO Reorganisation assuming an Offer Price at the mid-point, top-end and bottom-end, respectively, of the Offer Price Range. Following Admission, and in accordance with the terms of the Reorganisation Agreements, the following steps will be completed (together, the “Post-IPO Reorganisation”): (c) Demerger of NC ShareCo ApS: A demerger of NC ShareCo ApS will be executed as an “immediate demerger” (in Danish: straksspaltning), and the demerger will therefore not be subject to the otherwise applicable four-week notification period. The demerger is expected to be adopted on the date of Admission and registered with the Danish Business Authority before settlement of the IPO. Following the demerger, each current shareholder of NC ShareCo ApS, except for NC ManCo AS, will hold 100% of their own holding company which, in turn, will hold a number of shares in the Company. In order to simplify the group structure, NC ManCo AS will not receive a new holding company upon completion of the demerger, but will receive its indirect proportion of the Shares in the Company as consideration in the demerger. (d) Liquidation of NC ManCo AS: After settlement of the IPO, NC ManCo will be liquidated and its Shares in the Company will be distributed to its shareholders. (e) Possible simplification of Danish holding structure: Netcompany Holding I A/S, NC NewCo A/S and NC TopCo A/S may be merged into Netcompany Group A/S. 133 --- The diagrams below set out the Group structure as at the date of this Offering Circular and following completion of the IPO Reorganisation and the Post-IPO Reorganisation, respectively. ![img-1.jpeg](img-1.jpeg) Group Structure as at the Date of this Offering Circular ![img-2.jpeg](img-2.jpeg) Group Structure after Completion of the IPO Reorganisation --- Group Structure after Completion of the Post-IPO Reorganisation ![img-3.jpeg](img-3.jpeg) ## Reorganisation Agreements The Company, NC TopCo A/S, the Significant Shareholders and the other Existing Group Shareholders as well as the shareholders of NC ShareCo ApS and the shareholders of NC ManCo AS have prior to the date hereof entered into the Reorganisation Agreements to effect the IPO Reorganisation and the Post-IPO Reorganisation upon an Offer Price being determined. See above “—IPO Reorganisation and Post-IPO Reorganisation Steps” for further details regarding the transactions to be effected as part of the IPO Reorganisation and the Post-IPO Reorganisation. The IPO Reorganisation and the Post-IPO Reorganisation are subject to determination of the final Offer Price. Pursuant to the terms and conditions set out in the Reorganisation Agreements, the parties undertake to take certain specified actions required by each of them to effect the IPO Reorganisation and the Post-IPO Reorganisation. The Existing Group Shareholders provide no representations or warranties to the Company or the Group in connection with the IPO Reorganisation and the Post-IPO Reorganisation except as regards to authorisation to enter into the Reorganisation Agreements and their respective title to any shares in NC TopCo A/S contributed by them to the Company in connection with the IPO Reorganisation as well as to any shares they may hold in NC ShareCo ApS and NC ManCo AS. The Reorganisation Agreements will terminate on 31 December 2018 if the Offer Price has not been determined in connection with the Offering before this date. 135 --- # SELECTED HISTORICAL FINANCIAL AND OPERATING INFORMATION For purposes of this Offering Circular, combined financial statements of the Group have been prepared for the reporting period covering the years ended 31 December 2017, 2016 and 2015 in accordance with IFRS, as adopted by the European Union. Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018) and Mesan AS (renamed to Netcompany Norway AS in March 2018), which were acquired during the periods under review, were consolidated into the Group's financial statements as of 25 October 2017 and 22 November 2016, respectively. See “Presentation of Financial and Certain Other Information” and “Reorganisation”. The Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular have been audited or reviewed, as applicable, by the Group's independent auditors, Deloitte, as stated in their reports appearing therein. The selected consolidated financial information comprising selected consolidated income statement, balance sheet and cash flow statements shown below has been derived from the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular. The selected Other Data and Financial Measures as well as the segmental and operating information below has been derived from the Group's regularly maintained records and operating systems. Investors should read the following data together with the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements including the notes to those financial statements and the section in this Offering Circular entitled "Operating and Financial Review". ## Combined Income Statement | | Three months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016(1) | 2015 | | | DKK million | | | | | | Revenue | 517.0 | 332.9 | 1,416.1 | 899.6 | 758.1 | | Cost of services | (318.8) | (192.3) | (803.4) | (527.0) | (446.8) | | Gross profit | 198.2 | 140.6 | 612.7 | 372.6 | 311.3 | | Sales and marketing costs | (2.7) | (2.0) | (9.7) | (3.7) | (3.8) | | Administrative costs | (67.7) | (42.8) | (201.0) | (120.9) | (100.1) | | Operating expenses | (70.4) | (44.8) | (210.7) | (124.6) | (103.9) | | Special items | (7.7) | 0 | (32.9) | (35.1) | — | | EBITA (non-IFRS) | 120.1 | 95.7 | 369.0 | 212.9 | 207.4 | | Amortisation | (28.8) | (23.9) | (95.9) | (73.8) | — | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | Net financials | (24.7) | (23.9) | (72.2) | (62.7) | 0.2 | | EBT | 66.5 | 48.0 | 201.0 | 76.4 | 207.6 | | Tax for the period | (15.3) | (12.1) | (59.4) | (43.6) | (19.8) | | Profit/(loss) for the period | 51.2 | 35.9 | 141.6 | 32.8 | 187.8 | (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) which, in total, comprise the Group. --- Balance Sheet Data | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million | | | | | | Goodwill | 2,108.7 | 1,883.9 | 2,108.7 | 1,883.9 | 0.0 | | Other intangible assets | 465.2 | 463.6 | 495.2 | 488.7 | 4.1 | | Intangible assets | 2,573.9 | 2,347.5 | 2,603.9 | 2,372.5 | 4.1 | | Leasehold improvements | 4.3 | 3.1 | 3.9 | 2.2 | 2.1 | | Equipment | 20.8 | 15.4 | 20.0 | 14.0 | 6.4 | | Right of use assets | 26.9 | 25.2 | 30.5 | 25.2 | 11.9 | | Property, plant and equipment | 52.0 | 43.8 | 54.5 | 41.5 | 20.4 | | Other receivables | 9.9 | 6.4 | 8.8 | 5.4 | 4.0 | | Deferred tax assets | 0.7 | 0.2 | 0.0 | 0.2 | 11.0 | | Financial assets | 10.6 | 6.6 | 8.8 | 5.6 | 15.0 | | Non-current assets | 2,636.4 | 2,397.9 | 2,667.2 | 2,419.6 | 39.5 | | Trade receivables | 318.7 | 193.6 | 445.4 | 258.2 | 180.3 | | Receivables from group entities | — | 0.0 | 0.0 | 0.0 | 97.7 | | Contract work in progress | 301.6 | 170.7 | 139.2 | 110.5 | 80.9 | | Other receivables | 9.3 | 2.2 | 11.0 | 6.8 | 1.0 | | Prepayments | 6.6 | 6.0 | 12.3 | 5.3 | 5.2 | | Receivables | 636.1 | 372.4 | 607.8 | 380.8 | 365.1 | | Cash | 154.2 | 71.2 | 194.5 | 60.0 | 111.5 | | Current assets | 790.4 | 443.7 | 802.3 | 440.8 | 476.6 | | Assets | 3,426.8 | 2,841.5 | 3,469.5 | 2,860.4 | 516.1 | | Share capital | 71.7 | 69.4 | 71.6 | 69.3 | 0.6 | | Cash flow hedging reserve | (29.8) | (38.7) | (30.0) | (39.8) | 0.0 | | Foreign currency translation reserve | (5.2) | (2.1) | (2.9) | (0.1) | 0.0 | | Deferred cost of hedging reserve | 13.1 | 20.9 | 10.4 | 18.0 | 0.0 | | Retained earnings | 1,652.8 | 1,252.8 | 1,594.8 | 1,213.1 | 299.8 | | Equity | 1,702.6 | 1,302.3 | 1,643.9 | 1,260.5 | 300.4 | | Borrowings | 1,167.3 | 1,175.7 | 1,264.9 | 1,178.0 | 0.0 | | Leasing | 15.0 | 13.6 | 17.6 | 13.6 | 6.1 | | Deferred tax liability | 116.9 | 106.1 | 112.4 | 111.2 | 0.0 | | Non-current liabilities | 1,299.2 | 1,295.4 | 1,394.9 | 1,302.8 | 6.1 | | Borrowings | — | 0.6 | 0.0 | 28.0 | 0.0 | | Leasing | 12.8 | 11.7 | 13.6 | 11.7 | 5.8 | | Prepayments received from customers | 46.2 | 19.5 | 36.2 | 27.5 | 27.2 | | Trade payables | 54.3 | 16.9 | 50.6 | 26.8 | 18.6 | | Payables to group entities | — | 0.0 | 0.0 | 0.0 | 52.1 | | Other payables | 199.9 | 157.7 | 223.1 | 163.3 | 80.0 | | Provisions | 30.4 | 2.5 | 30.4 | 8.9 | 5.0 | | Income tax payable | 81.4 | 34.8 | 76.8 | 31.0 | 20.9 | | Current liabilities | 425.0 | 243.8 | 430.7 | 297.1 | 209.6 | | Liabilities | 1,724.2 | 1,539.2 | 1,825.6 | 1,599.9 | 215.7 | | Equity and liabilities | 3,426.8 | 2,841.5 | 3,469.5 | 2,860.4 | 516.1 | 137 --- # Statement of Cash Flow Data | | Three months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016(2) | 2015 | | | DKK million | | | | | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | Depreciation and amortization | 38.5 | 27.7 | 129.2 | 94.2 | 20.8 | | Working capital changes | (35.0) | (20.7) | (95.0) | (19.6) | 9.1 | | Free cash flow(1) | 94.7 | 78.9 | 307.3 | 213.6 | 237.2 | | Paid taxes | (10.4) | (19.4) | (35.4) | (34.0) | (20.6) | | Net financials | (13.3) | (15.6) | (76.6) | (62.7) | 0.2 | | Cash flows from operating activities | 71.1 | 43.8 | 195.3 | 116.9 | 216.8 | | Net cash outflow on acquisition of subsidiaries | — | 0.0 | (120.3) | (2,516.1) | 0.0 | | Acquisition of intangible assets | — | 0.0 | (11.1) | (9.2) | (5.9) | | Acquisition of property, plant and equipment | (3.5) | (4.9) | (16.7) | (13.0) | (3.0) | | Other receivables (deposits) | (1.1) | 0.0 | (2.3) | (1.5) | (0.6) | | Cash flows from investing activities | (4.6) | (4.9) | (150.5) | (2,539.7) | (9.6) | | Dividends | — | 0.0 | 0.0 | (116.4) | (100.0) | | Proceeds from issue of share capital | 6.9 | 3.9 | 16.7 | 1,265.1 | 0.0 | | Proceeds from borrowings | — | 0.0 | 92.0 | 1,178.0 | 0.0 | | Repayment of borrowing | (114.7) | (3.9) | (16.6) | (11.0) | (8.6) | | Cash flows from financing activities | (107.7) | (0.0) | 92.2 | 2,315.7 | (108.6) | | Net cash flow | (41.2) | 38.9 | 137.0 | (107.0) | 98.6 | | Cash and cash equivalents at beginning of period | 194.5 | 32.0 | 32.0 | 111.5 | 12.9 | | Cash and cash equivalents balances acquired | — | 0.0 | 26.3 | 27.6 | 0.0 | | Effect of exchange rate changes on the balance cash held in foreign currencies | (1.0) | (0.2) | (0.8) | (0.1) | 0.0 | | Cash and cash equivalents at end of period | 154.2 | 70.7 | 194.5 | 32.0 | 111.5 | (1) Free cash flow is defined as cash flow from operating activities less cash flow from paid taxes, net financials and investing activities. (2) Cash flow during the period was impacted due to the Significant Shareholders acquiring a majority stake in the Group in February 2016 and a subsequent capital increase of DKK 1.3 billion. To allow for meaningful comparison between the full-year numbers, the cash flow for the year ended 31 December 2016 shows the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) which, in total, comprise the Group. --- 139 # OPERATING AND FINANCIAL REVIEW For purposes of this Offering Circular, combined financial statements of the Group have been prepared for the reporting period covering the years ended 31 December 2017, 2016 and 2015 in accordance with IFRS, as adopted by the European Union. Hunter Macdonald Ltd and Mesan AS, which were acquired during the periods under review, were consolidated into the Group's financial statements as of 25 October 2017 and 22 November 2016, respectively. See "Presentation of Financial and Certain Other Information" and "Reorganisation". The Combined Financial Statements and the Condensed Consolidated Interim Financial Statements included in this Offering Circular have been audited or reviewed, as applicable, by the Group's independent auditors, Deloitte, as stated in their reports appearing therein. You should read the following operating and financial review of the Group on a combined basis in conjunction with the sections entitled "Selected Historical Financial and Operating Information", "Presentation of Financial and Certain Other Information" as well as the Combined Financial Statements and the Condensed Consolidated Interim Financial Statements and the related notes included elsewhere in this Offering Circular. This discussion may contain forward-looking statements, which are subject to risks and uncertainties, including, but not limited to, certain risks described in the "Risk Factors" section of this Offering Circular. Actual results could differ materially from those expressed or implied in any forward-looking statements. See the section entitled "Special Notice Regarding Forward-Looking Statements" in this Offering Circular. ## Overview The Group is a pure-play next-generation IT services company, focused on delivering business critical IT solutions to large Public and Private sector customers to lead and support them in their digital transformation journeys. These solutions are at the heart of an organisation's core strategy or function and are thus highly significant for customers in conducting their core business. The Group has developed and institutionalised a highly differentiated business model that, for over 18 years, has proven to be repeatable and scalable and enables the Group to deliver projects on time, on budget and within scope. The uniqueness of the Group's business model is characterised by an integrated sales and delivery approach, IT people leading IT people, a very customer transparent and deliverable-driven methodology and a highly skilled team of IT professionals, with an average age in 2017 of approximately 33 years. The Group's business is comprised of two main segments, each of which is an operating segment for financial reporting purposes: - Public sector. Public sector revenues accounted for 55.3% and 51.6% of the Group's total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 50.7% and 39.0% of the Group's Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. - Private sector. Private sector revenues accounted for 44.7% and 48.4% of the Group's total revenues for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively and 49.3% and 61.0% of the Group's Adjusted EBITA for the three months ended 31 March 2018 and the year ended 31 December 2017, respectively. The Group's IT services cover development through to maintenance and operations. The Group's development services include design, development and implementation of IT solutions driven by customer requirements in the digital transformation areas of systems modernisation, system differentiation and system innovation projects. Its maintenance and operations services include long term benefit realisation initiatives, to continuously maintain, operate and support customer IT solutions that the Group has delivered. As at 11 May 2018, the Group had approximately 1,432 employees based in its key geographies of Denmark, Norway and the United Kingdom (excluding freelancers in Denmark and Norway) and an additional 319 employees based in Poland and Vietnam. ## Consolidated Income Statement Line Items The following section presents the Group's income statement line items derived from the Group's Combined Financial Statements and the Condensed Consolidated Interim Financial Statements. ## Revenue The Group's primary service offerings include IT services and operations solutions. Consulting services are generally provided on either a time and material or fixed price contract basis. Revenue from time and material --- contracts is recognised as hours are delivered and direct expenses are incurred. Revenue from fixed price contracts is recognised pursuant to the percentage-of-completion method, whereby revenue is recognised based on cost of hours incurred to date as a percentage of the total estimated cost of hours to fulfil the contract. Revenue from operations solutions is recognised in the period the solutions are provided, which will either be based on output measures or using the straight-line method over the term of the contracts. ## Cost of services Cost of services includes expenses, external project costs, wages, salaries and depreciation directly incurred as part of the Group’s delivery of projects to achieve revenue for the year. ## Gross profit Gross profit is the Group’s revenue minus cost of services. ## Sales and marketing costs Sales and marketing costs include expenses relating to the Group’s sales and marketing efforts, including expenses, external project costs, wages, salaries and depreciation indirectly incurred to achieve revenue for the year. ## Administrative costs Administrative costs include costs incurred for the Group’s administrative function, including wages and salaries for administrative staff and Group management, IT costs, as well as depreciation and impairment losses relating to intangible assets and property, plant and equipment used for administration of the Group. ## Operating profit before amortisation (EBITA) EBITA is defined as earnings before interest, taxes and amortisation, which is calculated as revenue minus cost of services, sales and marketing costs, administrative costs and special items. ## Amortisation Amortisation is the Group’s systematic allocation of cost of intangible assets over the life of the respective categories of intangible assets. ## Operating profit (EBIT) Operating profit (EBIT) is the Group’s earnings before interest and taxes, which is calculated as revenue minus cost of services, sales and marketing costs, administrative costs and special items. ## Financial income and expenses Financial income and expenses include interest income and expenses, currency gains and losses and tax surcharge and tax relief under the Danish Tax Prepayment Scheme. ## Special items This item includes non-recurring costs or income, which cannot be directly attributed to the Group’s ordinary activities, including acquisition-related costs, transaction costs and Offering-related costs. ## Tax for the period/year Tax for the period/year consists of current tax for the year and changes in deferred tax. The tax rate in Denmark is 22% and it is expected that the Group will gradually realise an effective tax rate roughly equal to the statutory rate. The Group is also exposed to tax rates in Poland, Norway and in the UK. In 2017, the Group’s effective tax rate was 29.6%. 140 --- Comprehensive income Comprehensive income is defined as the statement of all Group income and expenses recognised over a given period of time. Non-IFRS Financial Measures and Other Key Performance Indicators In assessing the performance of the Group’s business, it considers a variety of financial and operating metrics, including certain financial measures which are not measures of financial performance under IFRS, as adopted by the European Union. Such measures may not be indicative of historical operating results, nor are such measures meant to be predictive of future results. The Group has presented these non-IFRS measures in this Offering Circular because it considers them an important supplemental measure of its performance and believes that they are widely used by investors in comparing performance between companies. However, not all companies may calculate the non-IFRS financial measures in the same manner or on a consistent basis and, as a result, the presentation thereof may not be comparable to measures used by other companies under the same or similar names. Accordingly, undue reliance should not be placed on the non-IFRS financial measures contained in this Offering Circular and they should not be considered as a substitute for revenue, and EBIT or other financial measures computed in accordance with IFRS, as adopted by the European Union. For a description of non-IFRS measures discussed in this section, see “Presentation of Financial and Certain Other Information—Non-IFRS Financial Measures”. Organic revenue/organic revenue growth (non-IFRS) In order to analyse underlying trends in financial performance excluding the effects of acquired businesses, the Group measures organic revenue and organic revenue growth. Organic revenue is defined as revenue from any entity that the Group has owned for the preceding 12 month period and where the revenue from that entity has been fully consolidated in the Group’s results over the full 12 month period. Organic revenue is calculated in local currencies excluding any impact from currency exchange rate fluctuations. See “—Key Factors Affecting the Group’s Results of Operations—Acquisitions” below for a discussion of the Group’s acquisitions during the three years ended 31 December 2017, 2016 and 2015 for which adjustments have been made to arrive at the organic revenue figures included herein. Organic revenue growth represents the percentage change in the Group’s organic revenue as compared to total revenue from the prior period to the current period. In order to calculate organic revenue growth (i) for the three years ended 31 December 2017, 2016 and 2015, the Group applies a constant currency adjustment based on the average exchange rates for the prior year³ and (ii) for the three months ended 31 March 2018 and 2017, the Group applies a constant currency adjustment based on the average exchange rates for the three months ended 31 March for the prior year.⁴ The table below presents adjustments made to the Group’s reported revenue in order to arrive at organic revenue and organic revenue growth on a Group basis for the three months ended 31 March 2018 and 2017: | | 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million (unless otherwise indicated) | | | Revenue | 517.0 | 332.9 | | Impact of constant currency adjustments | 3.2 | — | | Impact of acquisitions | (77.1) | (35.1) | | Organic Revenue (non-IFRS) | 443.2 | 297.8 | | Organic Revenue Growth (non-IFRS) | 33.1% | 45.3% | ³ Average exchange rates during the year ended 31 December 2017 were DKK 79.60 and DKK 839.02 per 100 units of NOK and GBP, respectively. Average exchange rates during the year ended 31 December 2016 were DKK 82.41 per 100 units of NOK. ⁴ Average exchange rates during the three months ended 31 March 2018 were DKK 77.02 and DKK 841.02 per 100 units of NOK, and GBP, respectively. Average exchange rates during the three months ended 31 March 2017 were DKK 82.78 per 100 units of NOK. 141 --- The table below presents adjustments made to the Group's reported revenue to arrive at organic revenue and organic revenue growth on a segment basis for the three months ended 31 March 2018 and 2017: | | 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million (unless otherwise indicated) | | | Public sector | | | | Revenue | 285.8 | 152.6 | | Impact of constant currency adjustments | 1.8 | 0.0 | | Impact of acquisitions | (11.8) | (11.4) | | Organic Revenue (non-IFRS) | 275.8 | 141.2 | | Organic Revenue Growth (non-IFRS) | 80.7% | 63.7% | | Private sector | | | | Revenue | 231.2 | 180.3 | | Impact of constant currency adjustments | 1.4 | 0.0 | | Impact of acquisitions | (65.3) | (23.7) | | Organic Revenue (non-IFRS) | 167.4 | 156.6 | | Organic Revenue Growth (non-IFRS) | (7.2)% | 31.9% | The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth on a geographic basis for the three months ended 31 March 2018 and 2017: | | 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million (unless otherwise indicated) | | | Denmark(1) | | | | Revenue | 397.3 | 297.8 | | Impact of constant currency adjustments | — | — | | Impact of acquisitions | — | — | | Organic Revenue (non-IFRS) | 397.3 | 297.8 | | Organic Revenue Growth (non-IFRS) | 33.4% | 45.3% | | Norway | | | | Revenue | 42.6 | 35.1 | | Impact of constant currency adjustments | 3.2 | — | | Impact of acquisitions | — | (35.1) | | Organic Revenue (non-IFRS) | 45.8 | — | | Organic Revenue Growth (non-IFRS) | 30.6% | — | | United Kingdom(2) | | | | Revenue | 77.1 | — | | Impact of constant currency adjustments | — | — | | Impact of acquisitions | 77.1 | — | | Organic Revenue (non-IFRS) | — | — | | Organic Revenue Growth (non-IFRS) | — | — | (1) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s Danish projects including revenue generated from the Group’s sourcing center in Poland. (2) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group’s UK projects including revenue generated from the Group’s sourcing center in Vietnam. --- The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth for the Group for the years ended 31 December 2017, 2016 and 2015. Organic net revenue grew at a compound annual growth rate of 27.5% between 2015 and 2017. | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million (unless otherwise indicated) | | | | Revenue | 1,416.1 | 899.6 | 758.1 | | Impact of constant currency adjustments | 4.7 | — | — | | Impact of acquisitions | (188.8) | (11.7) | — | | Organic Revenue (non-IFRS) | 1,232.0 | 887.9 | 758.1 | | Organic Revenue Growth (non-IFRS) | 37.0% | 17.1% | 20.5% | The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth on a segment basis for the years ended 31 December 2017, 2016 and 2015: | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million (unless otherwise indicated) | | | | Public sector | | | | | Revenue | 730.2 | 368.3 | 311.5 | | Impact of constant currency adjustments | 2.4 | — | — | | Impact of acquisitions | (83.5) | (2.8) | — | | Organic Revenue (non-IFRS) | 649.1 | 365.6 | 311.5 | | Organic Revenue Growth (non-IFRS) | 76.2% | 17.4% | 16.8% | | Private sector | | | | | Revenue | 685.9 | 531.3 | 446.6 | | Impact of constant currency adjustments | 2.3 | — | — | | Impact of acquisitions | (105.2) | (9.0) | — | | Organic Revenue (non-IFRS) | 583.0 | 522.3 | 446.6 | | Organic Revenue Growth (non-IFRS) | 9.7% | 16.9% | 23.2% | --- The table below presents adjustments made to the Group's reported revenue in order to arrive at organic revenue and organic revenue growth on a geographic basis for the years ended 31 December 2017, 2016 and 2015: | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million (unless otherwise indicated) | | | | Denmark(1) | | | | | Revenue | 1,220.3 | 887.9 | 758.1 | | Impact of constant currency adjustments | — | — | — | | Impact of acquisitions | — | — | — | | Organic Revenue (non-IFRS) | 1,220.3 | 887.9 | 758.1 | | Organic Revenue Growth (non-IFRS) | 37.4% | 17.1% | 20.5% | | Norway | | | | | Revenue | 133.9 | 11.7 | — | | Impact of constant currency adjustments | (4.7) | — | — | | Impact of acquisitions | (126.9) | (11.7) | — | | Organic Revenue (non-IFRS) | 11.7 | — | — | | Organic Revenue Growth (non-IFRS) | 0.0% | — | — | | United Kingdom(2) | | | | | Revenue | 61.9 | — | — | | Impact of constant currency adjustments | 0.0 | — | — | | Impact of acquisitions | (61.9) | — | — | | Organic Revenue (non-IFRS) | — | — | — | | Organic Revenue Growth (non-IFRS) | — | — | — | (1) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (2) Includes the revenue, impact of constant currency adjustments and acquisitions and organic revenue from the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. ## EBITA (non-IFRS) EBITA is defined as revenue minus cost of services, sales and marketing costs, administrative costs and special items. The following table provides a reconciliation of the Group's EBITA to EBIT: | | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million, unless otherwise indicated | | | | | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | Amortisation | (28.8) | (23.9) | (95.9) | (73.8) | — | | EBITA (non-IFRS) | 120.1 | 95.7 | 369.0 | 212.9 | 207.4 | | EBITA margin | 23.2% | 28.7% | 26.1% | 23.7% | 27.4% | ## Adjusted EBITA (non-IFRS) Adjusted EBITA is defined as EBITA adjusted for special items. Adjusted EBITA is a non-IFRS measurement that management considers to be a useful measure of monitoring the underlying performance of the Group, excluding special items which are non-recurring in nature. --- The following table provides a reconciliation of the Group's Adjusted EBITA to EBIT: | | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million, unless otherwise indicated | | | | | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | Amortisation | (28.8) | (23.9) | (95.9) | (73.8) | — | | EBITA (non-IFRS) | 120.1 | 95.7 | 369.0 | 212.9 | 207.4 | | Acquisition-related costs(1) | (1.0) | — | (13.7) | (5.7) | — | | Transaction costs(2) | — | — | (1.7) | (29.4) | — | | Offering-related costs(3) | (6.7) | — | (17.5) | — | — | | Adjusted EBITA (non-IFRS) | 127.8 | 95.7 | 402.0 | 248.0 | 207.4 | | Adjusted EBITA margin | 24.7% | 28.8% | 28.4% | 27.6% | 27.4% | (1) Acquisition-related costs comprise costs related to external advisors, including strategy consultants, banks, legal and tax advisors, relating to acquisitions including contemplated acquisitions that were aborted. (2) Transaction costs comprise various fees incurred in connection with the transaction in February 2016, where the Significant Shareholders acquired a majority stake in the Group. (3) Offering-related costs comprise costs related to external advisors, including strategy and transactional services consultants and legal advisors incurred in connection with the Offering. ## Utilisation The Group measures the efficiency of its utilisation of the Group's customer facing FTE capacity by assessing a utilisation metric that is designed to help the Group track whether it has the right number of FTEs and whether its FTEs are working in an efficient manner. The efficient deployment of the Group's FTEs on its projects is influenced by the overall level of demand for its IT services; its ability to efficiently transition FTEs from completed projects to new assignments; its ability to hire and train new FTEs; its ability to accurately forecast demand for its IT services and thereby maintain an appropriate FTE headcount in each of its geographies and workforces; and its ability to effectively manage FTE turnover. Utilisation represents the percentage of a standard working hour that a consultant spends on customer-related work, based on an average work week of 40 hours per FTE in all geographies other than Norway, where the calculation is based on an average work week of 37.5 hours per FTE. The following table sets forth the Group's FTE utilisation for the periods indicated: | | For the three months ended 31 March | | For the year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Utilisation | 88.2% | 87.3% | 87.6% | 86.2% | 87.9% | ## Customer-facing FTEs and total FTEs The Group measures the number of customer-facing FTEs and the total number of FTEs at year-end. Customer-facing FTEs are those employees and freelancers whose role involves direct customer interaction and engagement and is a key metric for the delivery capacity of the Group. The number of non-customer-facing FTEs is assessed to evaluate efficiency of the administrative functions of the Group when benchmarking against other leading companies. The following table sets forth the Group's customer-facing FTEs, non-customer-facing FTEs and total FTEs at year-end for the periods indicated: | | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Customer-facing FTEs(1) | 1,613 | 952 | 1,534 | 869 | 631 | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Non-customer facing FTEs | 105 | 44 | 93 | 40 | 29 | | Total FTEs(2) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. Rounded to the nearest whole number. (2) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. --- 146 # Revenue visibility The Group measures revenue visibility on a 12-month basis, based on two main input parameters: (1) the total estimated value of contractually committed engagements, which comprise fixed price agreements and service agreements and (2) total estimated value of planned continued engagements, which comprise ongoing time and material engagements which the Group believes have a high likelihood of conversion and/or prolongation. The Public sector segment has a high degree of visibility from already won tenders and is typically driven by multi-year fixed price tender contracts with a significant share of maintenance and operations revenue. In contrast, Private sector contracts typically have a duration of approximately 12 to 18 months and larger share of time and material engagements reflecting a fundamental difference in the purchasing pattern for Private sector segment customers compared to Public sector segment customers. Private customers tend to renew their contractual engagements with the Group and a higher proportion of revenue will therefore by definition be maintenance-based, which is also different from the dynamics in the Public sector segment. The following table sets forth revenue visibility of contractually committed and planned continued engagements on a segment basis for the periods indicated. | | For the year ending 31 December | | --- | --- | | | 2018^{(1)} | | | DKK million | | Public sector | | | Revenue visibility on contractually committed engagements | 128 | | Revenue visibility on planned continued engagements | 447 | | Private sector | | | Revenue visibility on contractually committed engagements | 62 | | Revenue visibility on planned continued engagements | 307 | | Total revenue visibility (Public and Private sector) on contractually committed engagements | 190 | | Total revenue visibility (Public and Private sector) on planned continued engagements | 754 | (1) The Group did not record and monitor revenue visibility prior to 31 December 2017. As a result, it does not have value of revenue visibility figures for the years ended 31 December 2016 and 2015. The information on revenue visibility constitutes forward-looking statements. Forward-looking statements are not guarantees of future financial performance and the Group's actual future revenues could differ materially from that expressed or implied by such forward-looking statements as a result of many factors, including those described under "Special Notice Regarding Forward-Looking Statements" and "Risk Factors—The Group's revenue visibility is subject to certain assumptions and estimates and expected revenue may not be realised in full." # Key Factors Affecting the Group's Results of Operations The Group's results of operations, financial position and liquidity have been affected in the years under review, and are expected to continue to be affected, by certain principal factors and development relating to its business, including, in particular: general economic conditions; trends within the IT industry; acquisitions; ability to win and renew large Public sector segment contracts; diversification of customer base; margins; contract pricing; cost of services, efficiency and utilisation; quarterly development and exchange rates. Other than the factors described in this section “—Key Factors Affecting the Group’s Results of Operations”, the Group does not consider any governmental, economic, fiscal, tax, monetary or political policy or factor individually to have had a material effect, directly or indirectly, on its operations in the years under review. See “Risk Factors” for information regarding any governmental, economic, fiscal, tax, monetary or political policies or factors that could materially affect, directly or indirectly, the Group’s operations in the future. # General economic conditions The level of IT spending by the Group's existing and potential customers is influenced by general economic conditions in the countries in which the Group operates. As many of the Group's customers, particularly its large --- customers, are Northern European companies, economic conditions in Northern Europe may affect the demand for the Group's solutions and services and the pricing it is able to agree on in respect of its contracts. Volatile, negative or uncertain economic conditions in the Group's customers' markets have in the past undermined, and could in the future undermine, business confidence and cause customers to reduce or defer their spending on new initiatives and technologies, or may result in customers reducing, delaying or eliminating spending under existing contracts or putting pressure on pricing. In Denmark, Norway and the UK, there are large addressable IT services markets that provide the Group with the opportunity to continue to increase its market share. See "Industry" for further details. These markets, and Denmark in particular, are significant markets for the Group's customers and, accordingly, economic conditions in each of these countries are particularly important to the Group's business. As a service provider to Public sector customers, the Group is also impacted by financial, budgetary, regulatory or political constraints, or changes in government policy and public spending constraints which could have a significant impact on the size, scope, timing and duration of contracts and orders placed by them and, therefore, on the level of business which the Group will derive from such customers. In addition, the Group's customers continue their focus on cost effectiveness, implying price pressure on suppliers such as the Group. Accordingly, going forward, the Group expects increased competition especially from offshore-based vendors, who position themselves on a mix of competitive prices through leveraging a global delivery model and a high willingness to invest in the customer. Through its acquisition of Hunter Macdonald Ltd, the Group now has a sourcing platform in Vietnam that it intends to use increasingly going forward in order to remain competitive. While the Group's customers continue to focus on cost effectiveness generally, the tender process in the Public sector segment has evolved over the last five years, with increased weight being given to the bidding IT service provider's quality of service and execution track record when awarding tenders and less focus on quoted price as the main determinant. ## Trends within the IT industry Trends within the IT industry can affect the overall level of demand for IT services and, accordingly, have an effect on the Group's sales. As technology has developed and become more sophisticated, there has been an increasing desire to incorporate IT within almost all business processes within all industries and this has increased demand for the types of services and solutions the Group offers. The Group expects that new technologies and new applications of existing technologies will continue to be developed and support the continued demand for IT services. Customer focus within the IT services market is shifting from mainframe systems to next-generation systems, following the development and fast adoption of new technologies and need to integrate these systems with new digital offerings. This shift is moving project focus from enhancing or maintaining large, monolithic systems and inflexible data assets, to smaller and flexible architecture for seamless experiences and advanced analytics. In "Old World IT", spending was concentrated on performing business activities more efficiently, with projects characterised by long lead times, rigid scope of work, and extended release cycles. In "New world IT", attention is shifting to more agile and flexible ways of working, which deliver complex functionality faster to market. Cyber security and integrity of data storage are a particular focus for many businesses as a result of increased reliance on electronic storage of information, e-commerce and risk of hacking. Relatedly, the location of the storage of customer data is also a focus area for many customers and the Group's data centres being located in Denmark is attractive to many of its customers, who prefer their data to be stored in Europe, rather than Asia. Increasing reliance on preferred partners to deliver technology capabilities allows the Group to reduce its fixed costs and replace them with variable costs based on actual IT requirements, which are easier to scale up or down and allows the Group to compete for more work. 147 --- # Acquisitions The Group has historically driven growth through a combination of organic growth, and in recent years selectively pursuing acquisitions. The Group may look to use acquisitions as a way to further expand or enhance the range of services that it offers as well as its technological capabilities, and to improve its presence in strategic Northern European geographies. Since 2016, the Group has completed two significant acquisitions. The following table presents a list of the acquisitions, including the percentage of current ownership, the closing date and strategic rationale for the acquisition: | Acquisition | Current Ownership | Closing Date | Consideration paid | Strategic Rationale | | --- | --- | --- | --- | --- | | Hunter Macdonald Ltd . . . | 100% | 25 October 2017 | Aggregate consideration of GBP 40.3 million (DKK 345.9 million) | Gain entry into the United Kingdom, which is an attractive market for the Group given its large size and developed market for IT services. Appealing target for the Group given its complementary cyber security offering and sourcing platform in Vietnam | | Mesan AS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 100% | 22 November 2016 | Aggregate consideration of NOK 205.8 million (DKK 195.6 million) | Gain entry into Norway, which is an attractive market for the Group given its similar characteristics to the Danish market and high digitalisation | # Ability to win and renew large Public sector segment contracts The Group is dependent on its ability to continue to win tendered and re-tendered Public sector contracts over time. In the recent past, the Group has had a strong track record of won tenders and re-tenders. In 2013, the Group decided to invest in the Public sector segment and dedicated a team of around 30 employees to understand the dynamics of the segment, including the requirements related to responding to public tenders. At the same time, the Group invested in setting up operations to enable it to maintain and operate the bidding systems used in the tender process with large public entities. Largely as a result of these investments, the Group's win rate in Danish public tenders (including new tenders and re-tenders of ongoing contracts) in which it participated was $44\%$ , $72\%$ and $87\%$ calculated as total value of contracts won as a percentage of total potential value of contracts tendered for, in each of the year's ended 31 December 2015, 2016 and 2017, respectively (Source: EU Tender Database (Tenders Electronic Daily) and Group data). The large amount of contracts won resulted in Group revenue in the Public sector segment increasing by $18.3\%$ from 2015 to 2016 and $98.2\%$ from 2016 to 2017 (of which $76.2\%$ of the increase in 2017 can be attributed to organic growth). The vast majority of the contracts tendered for, and won, in 2016 and 2017 are still in the development phase, while an increased number of projects will be completed during the course of 2018, and then move to the maintenance and operations phases. The Group's track record in delivering projects successfully has been pivotal to its recent success in winning large public tenders and the Group expects all tenders won under the various projects to be delivered on time, on budget and within scope. In addition, in 2016 and 2017 a total of four Public sector contracts were retendered. The Group successfully bid for these retenders and won all of the contracts for maintenance and operations renewals. # Diversification of customer base The focus of the Group's strategy in recent years has been to diversify its customer base by gaining new customers. The diversification of the Group's customer base has driven increases in the Group's revenue in the years under review. Part of the Group's strategy is to continue to gain new customers and further diversify its customer base. --- The Group is party to a relatively small number of significant contracts that are important contributors to its revenue and, accordingly, have significant customer concentration, as set forth in the following table. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | (%) | | | | | | Group revenue from five largest customers as a percentage of total revenue | 37.8 | 24.7 | 33.3 | 19.6 | 24.5 | | Group revenue from ten largest customers as a percentage of total revenue | 48.8 | 34.5 | 43.7 | 33.1 | 39.9 | # Margins The following table sets forth the revenue, gross profit (at the Group level only) and Adjusted EBITA for the periods presented on a Group, operating segment and geographic (based on the ownership of projects) basis. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Group | DKK million | | | | | | Total revenue | 517.0 | 332.9 | 1,416.1 | 899.6 | 758.1 | | Gross profit(1) | 198.2 | 140.6 | 612.7 | 372.6 | 311.3 | | Adjusted EBITA (non-IFRS)(2) | 127.8 | 95.7 | 402.0 | 248.0 | 207.4 | | Sector | | | | | | | Public sector revenue | 285.8 | 152.6 | 730.2 | 368.3 | 311.5 | | Public sector Adjusted EBITA (non-IFRS)(2) | 64.8 | 32.8 | 156.9 | 81.0 | 80.7 | | Private sector revenue | 231.2 | 180.3 | 685.9 | 531.3 | 446.6 | | Private sector Adjusted EBITA (non-IFRS)(2) | 63.0 | 62.9 | 245.1 | 167.0 | 126.7 | | Geography | | | | | | | Denmark revenue(3) | 397.3 | 297.8 | 1,220.3 | 887.9 | 758.1 | | Denmark Adjusted EBITA (non-IFRS)(2)(3) | 111.5 | 87.9 | 358.8 | 246.0 | 207.4 | | Norway revenue | 42.6 | 35.1 | 133.9 | 11.7 | — | | Norway Adjusted EBITA (non-IFRS)(2) | 9.5 | 7.8 | 30.8 | 2.0 | — | | United Kingdom revenue(4) | 77.1 | — | 61.9 | — | — | | United Kingdom Adjusted EBITA (non-IFRS)(2)(4) | 6.8 | — | 12.4 | — | — | (1) Gross profit is calculated as revenue minus cost of service. (2) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. (3) Includes the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (4) Includes the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. --- The following table sets forth the gross profit margin (at the Group level only), EBITA margin and Adjusted EBITA margin for the periods presented on a Group, operating segment and geographic (based on the ownership of projects) basis. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Group | | | % | | | | Gross profit | 38.3% | 42.2% | 43.3% | 41.4% | 41.1% | | EBITA (non-IFRS) | 23.2% | 28.7% | 26.1% | 23.7% | 27.4% | | Adjusted EBITA (non-IFRS)(1) | 24.7% | 28.8% | 28.4% | 27.6% | 27.4% | | Sector | | | | | | | Public sector EBITA (non-IFRS) | 21.2% | 21.5% | 18.8% | 17.8% | 25.9% | | Public sector Adjusted EBITA (non-IFRS)(1) | 22.7% | 21.5% | 21.5% | 22.0% | 25.9% | | Private sector EBITA (non-IFRS) | 25.8% | 34.9% | 33.8% | 27.7% | 28.4% | | Private sector Adjusted EBITA (non-IFRS)(1) | 27.3% | 34.9% | 35.7% | 31.4% | 28.4% | | Geography | | | | | | | Denmark EBITA (non-IFRS)(2) | 26.7% | 29.5% | 27.0% | 23.8% | 27.4% | | Denmark Adjusted EBITA (non-IFRS)(1)(2) | 28.1% | 29.5% | 29.4% | 27.7% | 27.4% | | Norway EBITA (non-IFRS) | 21.0% | 22.2% | 20.7% | 16.7% | — | | Norway Adjusted EBITA (non-IFRS)(1) | 22.2% | 22.2% | 23.0% | 16.7% | — | | United Kingdom EBITA (non-IFRS)(3) | 6.7% | — | 20.0% | — | — | | United Kingdom Adjusted EBITA (non-IFRS)(1)(3) | 8.8% | — | 20.0% | — | — | (1) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. (2) Includes the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (3) Includes the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. Historically, the Group's margins in its maintenance and operations services have been higher than those in development. This is a result of the project dynamics that customers tend to favour a relatively lower initial investment in the development of a given IT solution or system. Often when IT systems go into the maintenance phase, the dynamics change and, particularly within the Public sector, the contract terms tend to shift towards a time and material basis rather than a fixed fee basis. In addition, a number of maintenance and operations-related tasks can typically be efficiently conducted in parallel as many projects will have some overlap in tasks to be performed compared with individual development projects. The Group's maintenance and operations business tend to be critical for the Group's customers' businesses. Accordingly, in case of, for example, budget cuts due to economic conditions, the Group's customers are more likely to defer or cancel discretionary, short-term development contracts over maintenance and operations contracts. Growth in the Group's revenue and margins is the result of increased activity in both the Public and Private sector segments. As noted above, in 2013 the Group decided to invest in the Public sector segment in order to drive increased market share in the segment, as many of the more complex and business-critical digitalisation projects to be undertaken were identified in this particular segment. During 2015 and 2016, the Group won a significant number of contracts in the Public sector segment. The vast majority of the Public sector contracts tendered for, and won, in 2016 and 2017 are still in the development phase. As those projects move to the maintenance and operations phase, margins are expected to be positively impacted in line with the overall margin profile of these projects discussed above. See "—Ability to win and renew large Public sector segment contracts" above. At the same time, in the Private sector segment the Group has increased its focus on larger customers with a strategic agenda, which has resulted in increased levels of activity involving a number of the Group's larger customers in this segment. As discussed further below, the Group has a high utilisation rate and this combined with a relatively low amount of significant rectification (or "clean up") work on large projects has historically been another key driver for the Group's sustained margins. See "—Cost of services, efficiency and utilisation" below. The Group's reported growth was also impacted by the acquisition of Mesan AS in Norway in 2016 and Hunter Macdonald Ltd in the UK in 2017. These two acquisitions impacted revenue growth by DKK 184.0 million from the year ended 31 December 2016 to the year ended 31 December 2017 and by DKK 11.7 million from the year ended 31 December 2015 to the year ended 31 December 2016. The acquisition of Mesan AS negatively impacted the Group's EBITA margin (non-IFRS) 0.1 percentage points in 2016 and 0.5 --- percentage points in 2017, respectively. In addition, the acquisition of Hunter Macdonald Ltd negatively impacted the Group's EBITA margin (non-IFRS) by 0.2 percentage points in 2017. During the years under review, the Group has been able to improve its EBITA margin (non-IFRS) and Adjusted EBITA margin (non-IFRS), which increased from 27.4% to 27.6% and from 27.6% to 28.4%, respectively from 2015 to 2016 and from 2016 to 2017. The margin improvement was due to the Group's revenue growth increasing relative to its cost of services (which include staff costs and expenses). In the three months ended 31 March 2018, Adjusted EBITA margin (non-IFRS) decreased to 24.7% from 28.8% in the three months ended 31 March 2017, as a result of full integration of Hunter Macdonald Ltd. The following table sets forth the cost of services sold, general and administration expenses and sales and marketing costs as a percentage of revenue for the years indicated. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | (% of revenue) | | | | | | Cost of services(1) | 61.7 | 57.8 | 56.7 | 58.6 | 58.9 | | Administrative costs | 13.1 | 12.9 | 14.2 | 13.4 | 13.2 | | Sales and marketing costs | 0.5 | 0.6 | 0.7 | 0.4 | 0.5 | | Total operating expenses(2) | 75.3 | 71.2 | 71.6 | 72.4 | 72.6 | (1) For further details on cost of services, see “—Cost of services, efficiency and utilisation” below. (2) Total operating expenses equals cost of services, administrative costs and sales and marketing costs. The Group's administrative costs as a percentage of revenue over the periods under review have generally been increasing, primarily driven by an increase in recruitment costs driven by the higher intake of FTEs in 2016 and 2017 compared to 2015, the increase in Group office space over the same period and the implementation of a new ERP system in 2017. The Group's sales and marketing costs as a percentage of revenue over the periods under review have been increasing, principally as a result of an increase in sales and marketing costs incurred due to the acquisitions of Mesan AS and Hunter Macdonald Ltd. ## Contract pricing The Group's profitability is dependent on the bill rates it is able to recover from the sale of its services and solutions and the efficiency with which the Group can deliver its projects. The bill rates the Company is able to recover are affected by a number of factors, including: (1) its customers' perceptions of its ability to add value through its services and solutions; competition; (2) the introduction of new service and solution offerings by the Group or its competitors; (3) the Group's competitors' pricing policies; (4) its ability to accurately estimate, attain and sustain contract revenues, margins and cash flows over increasingly longer contract periods; (5) bid practices of customers and their use of third-party advisors; (6) the use by the Group's competitors and its customers of offshore resources to provide lower-cost service delivery capabilities; (7) the Group's ability to charge premium prices when justified by market demand or the type of service or solution; and (8) general economic and political conditions. Competition for major new contracts is intense and the Group is often required to compete on price. The Group's profitability is also dependent on its ability to effectively price and manage its fixed fee contracts. The pricing of fixed price contracts is complex and highly dependent on the Group's internal estimates, predictions and assumptions for the Group's projects and, in particular, the cost of providing the relevant IT services. These estimates, predictions and assumptions might be based on limited data and could turn out to be inaccurate. If the Group does not accurately estimate the scope of the Group's costs and timing for completing projects, its fixed price contracts could prove unprofitable for the Group or yield lower profit margins than anticipated. The Group applies "work in progress" accounting for its fixed fee contracts, pursuant to which the estimated work to complete the projects is updated on a monthly basis based on progress to date and any increase in the estimated completion time is adjusted for all individual fixed fee contracts. Any significant deviation in estimated completion time against the original scope and time effort will thus negatively impact profit margins as more resources will be required to complete the project, which was agreed at a fixed price. 151 --- # Cost of services, efficiency and utilisation As a professional services company, the Group’s employees’ expertise, dedication and innovation are critical to its ability to perform its contracts with its customers. Cost of services are the Group’s largest cost and, accordingly, have a significant influence on its profitability. The following table sets forth components of the Group’s cost of services as a percentage of total Group revenue for the periods presented. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million (unless otherwise indicated) | | | | | | Total revenue | 517.0 | 332.9 | 1,416.1 | 899.6 | 758.1 | | Cost of services | 318.8 | 192.3 | 803.4 | 527.0 | 446.8 | | Staff costs | 213.5 | 158.5 | 624.1 | 438.5 | 376.5 | | Project costs(1) | 105.3 | 33.8 | 179.3 | 88.5 | 70.3 | | Total cost of services(2) | 318.8 | 192.3 | 803.4 | 527.0 | 446.8 | | As a percentage of revenue | 61.7% | 57.8% | 56.7% | 58.6% | 58.9% | (1) Project costs include indirect employee costs such as travel, entertainment, fees to subcontractors/freelancers and consumables on customer projects. (2) Total cost of services are computed on the basis of wages, salaries and pensions that relate to the amount of time consultants spend on customer projects and business development. In the three months ended 31 March 2018, the Group experienced higher total cost of services, principally as a result of the Group employing more FTEs during the three months ended 31 March 2018 compared to the three months ended 31 March 2017. Cost of services as a percentage of total revenue were higher at 61.7% in the three months ended 31 March 2018, compared to 57.8% in three months ended 31 March 2017. This development was principally due to the Group’s UK operations, which have a significantly higher share of costs due the use of long-term subcontractors which are more expensive compared to the Group’s permanent employees in other jurisdictions. This diluted the Group’s gross profit margin by 3.9 percentage points in the three months ended 31 March 2018 compared to three months ended 31 March 2017. In 2017, the Group experienced higher total cost of services, as a result of employing more FTEs during 2017 compared to 2016 enabling the Group to increase its revenue. Cost of services as a percentage of total revenue decreased by 1.9 percentage points from 58.6% in 2016 to 56.7% in 2017, principally driven by less FTE time spent on business development and other non-customer facing activity, an increase in utilisation, which increased from 86.2% in 2016 to 87.6% in 2017, as well as a slight increase in average hourly rate billed to customers, which is calculated as total revenue divided by billable hours (not including time spent on business development), compared to 2016. In 2016, the Group experienced higher cost of services, as a result of the increase in revenue driven by more FTEs. Cost of services as a percentage of total revenue decreased by 0.3 percentage points from 58.9% in 2015 to 58.6% in 2016, principally due to the average hourly rate billed to customers being higher in 2016 than in 2015. In 2015, the average hourly rate billed to customers was significantly negatively impacted by a single loss-making project which was initiated in 2014, related to the Group’s push to enter into the Danish trade union subsector of the Private sector segment. In 2016, the higher average hourly rate billed to customers was offset by more FTE time spent on business development and other non-customer facing activity compared to 2015, which increased cost of services per FTE as utilisation fell from 87.9% in 2015 to 86.2% in 2016. On balance, the higher average hourly rate billed to customers combined with lower utilisation increased revenue generated per FTE in 2016 compared to 2015 and also increased cost of services per FTE. 152 --- The Group's cost of services are a function of headcount, compensation paid and other customer project related costs as well as FTE time spent on business development. The following table sets forth the Group's FTEs by location on the dates presented. As at 11 May 2018 (the most recent practicable date prior to the date of this Offering Circular), the Group had 1,751 FTEs (excluding freelancers in Denmark and Norway). | Region | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Denmark(1) | 999 | 763 | 951 | 707 | 608 | | United Kingdom(2) | 263 | — | 252 | — | — | | Poland | 194 | 121 | 173 | 91 | 52 | | Norway(1) | 141 | 110 | 141 | 111 | | | Vietnam | 121 | — | 110 | — | — | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Total(3) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Does not include freelancers, as such personnel are not a prominent feature of the Danish or Norwegian IT services labour market. (2) Includes subcontractors, as such personnel are a prominent feature of the United Kingdom IT services labour market. (3) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. The following table sets forth the Group's customer-facing FTEs, non-customer-facing FTEs and total FTEs at year-end for the periods indicated. | | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Customer facing FTEs(1) | 1,613 | 952 | 1,534 | 869 | 631 | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Non-customer-facing FTEs | 105 | 44 | 93 | 40 | 29 | | Total FTEs(2) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Means those employees who have a role that includes direct customer interaction and engagement. Includes long-term subcontractors in the UK but not freelancers in Denmark and Norway. Rounded to the nearest whole number. (2) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. The following table sets forth the breakdown of the Group's FTEs on a professional role level on the dates presented. | Employees | As at 31 March | | As at 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | Partners | 28 | 19 | 30 | 19 | 15 | | Principals | 48 | 27 | 48 | 28 | 22 | | Managers | 211 | 168 | 235 | 170 | 134 | | Senior Consultants | 450 | 288 | 437 | 271 | 198 | | Consultants | 634 | 416 | 535 | 353 | 245 | | Administrative | 105 | 44 | 93 | 40 | 29 | | Trainees | 45 | 33 | 70 | 29 | 18 | | Freelancers in Denmark and Norway | 83 | 44 | 78 | 38 | 8 | | Subcontractors | 197 | 0 | 180 | 0 | 0 | | Total(1) | 1,801 | 1,039 | 1,705 | 947 | 668 | (1) Includes long-term subcontractors in the UK and freelancers in Denmark and Norway. Rounded to the nearest whole number. In 2017, FTEs increased by 758 from 947 in 2016 to 1,705, driven by both high organic growth in Denmark and by the inclusion of 352 employees in the UK/Vietnam as a result of the acquisition of Hunter Macdonald Ltd. In 2016, FTEs increased by 279 from 668 in 2015 to 947, driven by the inclusion of additional employees in Norway as a result of the acquisition of Mesan AS. The Group seeks to size its headcount in accordance with demand from its current and anticipated future projects, and as needed to operate its business. Due to the Group's growth to date, it has not needed to engage in significant redundancies. However, if the Group would need to reduce its headcount in order to right-size its business, it would need to comply with labour regulations in the relevant jurisdictions, which may delay or make costly reducing its headcount. For example, in Denmark, the Group is able to make staff redundancies upon giving salaried employees between one and six months' notice of termination, depending on individual seniority. --- Should such redundancy be deemed unfair, the employees may be entitled to compensation of up to six months' salary, however, usually not exceeding two months' salary. In addition, salaried employees who have been employed for 12 years or more may be entitled to severance pay upon termination of one to three months' salary. Accordingly, in the event that the Group would have to reduce its headcount following a reduction in demand for its services, there may be a lag effect in how fast the Group could reduce its headcount compared to the loss of revenue and, as a result, the Group's costs and margins, would be impacted for that particular period. The Group measures the efficiency of its utilisation of the Group's customer facing FTE capacity by assessing a utilisation metric that is designed to help the Group track whether it has the right number of FTEs and whether its FTEs are working in an efficient manner. The efficient deployment of the Group's FTEs on its projects is influenced by the overall level of demand for its IT services; its ability to efficiently transition FTEs from completed projects to new assignments; its ability to hire and train new FTEs; its ability to accurately forecast demand for its IT services and thereby maintain an appropriate FTE headcount in each of its geographies and workforces; and its ability to effectively manage FTE turnover. Utilisation represents the percentage of a standard working hour that a consultant spends on customer-related work, based on an average work week of 40 hours per FTE in all geographies other than Norway, where the calculation is based on an average work week of 37.5 hours per FTE. From 2015 to 2017, the Group yielded overall utilisation of approximately 86% to 88%. In addition, in connection with the Offering and becoming a public company, the Group expects to incur additional costs relating to the addition or enhancement of functions such as treasury, investor relations, legal and compliance. In addition, as a public company, the Group expects to incur annual listing fees, ongoing Nasdaq Copenhagen and VP Securities fees as well as costs relating to its annual general meeting. The Group also expects to pay higher aggregate remuneration to its board members and expects to incur additional costs relating to its employee incentive programmes. For further information see "Board of Directors, Executive Management and Key Employees—Incentive Programmes". ## Quarterly development The Group's revenue and operating results have varied between quarters as a result of fluctuations in revenue and the continued hiring of new employees over the years under review. These fluctuations are a result of: (1) the nature, number, timing, scope and contractual terms of the projects in which the Group is engaged; (2) delays incurred in the performance of those projects; (3) the accuracy of estimates of resources and time required to complete ongoing projects; (4) holiday periods, in particular summer holidays; and (5) general economic conditions which will continue to impact the Group's revenue and which, in the future, may fluctuate from quarter to quarter. Factors that affect the Group's revenue or operating profit in a particular quarter may not recur in a subsequent quarter or in the same quarter in a subsequent year. The following table sets forth the Group's quarterly revenue and Adjusted EBITA (non-IFRS), respectively, for the periods indicated. | | Quarter ended | | | | | | --- | --- | --- | --- | --- | --- | | | 31 March 2018 | 31 December 2017 | 30 September 2017 | 30 June 2017 | 31 March 2017 | | | DKK million | | | | | | Revenue | 517.0 | 443.4 | 337.5 | 302.3 | 332.9 | | Adjusted EBITA (non-IFRS)(1) | 127.8 | 115.3 | 117.0 | 74.0 | 95.7 | (1) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. The following table sets forth the Group's quarterly revenue and Adjusted EBITA (non-IFRS) presented on a segment basis for the periods indicated. | | Quarter ended | | | | | | --- | --- | --- | --- | --- | --- | | | 31 March 2018 | 31 December 2017 | 30 September 2017 | 30 June 2017 | 31 March 2017 | | | DKK million | | | | | | Public Sector | | | | | | | Revenue | 285.8 | 244.6 | 187.8 | 145.2 | 152.6 | | Adjusted EBITA (non-IFRS)(1) | 64.8 | 41.2 | 57.0 | 25.8 | 32.8 | | Private Sector | | | | | | | Revenue | 231.2 | 198.8 | 149.7 | 157.1 | 180.3 | | Adjusted EBITA (non-IFRS)(1) | 63.0 | 74.1 | 60.0 | 48.1 | 62.9 | (1) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. --- The following table sets forth the Group's quarterly revenue and Adjusted EBITA (non-IFRS) on a geographic level for the periods indicated. | | Quarter ended | | | | | | --- | --- | --- | --- | --- | --- | | | 31 March 2018 | 31 December 2017 | 30 September 2017 | 30 June 2017 | 31 March 2017 | | | DKK million | | | | | | Denmark(1) | | | | | | | Revenue | 397.3 | 341.9 | 306.5 | 274.0 | 297.8 | | Adjusted EBITA (non-IFRS)(2) | 111.5 | 92.8 | 108.8 | 69.3 | 87.9 | | Norway | | | | | | | Revenue | 42.6 | 39.6 | 30.9 | 28.3 | 35.1 | | Adjusted EBITA (non-IFRS)(2) | 9.5 | 10.2 | 8.1 | 4.7 | 7.8 | | United Kingdom(3) | | | | | | | Revenue | 77.1 | 61.9 | — | — | — | | Adjusted EBITA (non-IFRS)(1) | 6.8 | 12.4 | — | — | — | (1) Includes the revenue and Adjusted EBITA from the Group's Danish projects including revenue generated from the Group's sourcing center in Poland. (2) Adjusted EBITA is adjusted for costs related to merger and acquisition transactions and the Offering. (3) Includes the revenue and Adjusted EBITA from the Group's UK projects including revenue generated from the Group's sourcing center in Vietnam. ## Exchange rates Fluctuations in foreign currency exchange rates affect the Group's results of operations. With operations across a number of countries, the Group is subject to the effects of foreign currency fluctuations. Exchange rate fluctuations impact the Group's income statement, balance sheet and cash flows as a result of the reporting currency used in preparing its financial statements being DKK, which is different from the functional currency of the Group's subsidiaries, its assets and liabilities being stated in different currencies and certain revenue and costs arising in different currencies. Although the Group reports its operating results in Danish kroner, a portion of the Group's revenue and expenses are denominated in currencies other than Danish kroner, including Euro, Norwegian kroner, British pound sterling, Polish zloty and Vietnamese dong. In 2017, 85.1%, 10.1% and 4.7% of the Group's costs of service, administration costs and sales and marketing costs were denominated in the Danish kroner, Norwegian kroner and British pound sterling, respectively. As a result, the Group's results of operations and financial position are impacted by the value of Danish kroner relative to such other currencies. The following table presents the percentage breakdown of the Group's revenue and EBITA by currency reflecting the reporting currency of the entity. | | Group | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Three Months ended 31 March | | | Year ended 31 December | | | | | | | | | | | 2018 | | | 2017(1) | | | 2016(2) | | | 2015(3) | | | | | DKK | NOK | GBP | DKK | NOK | GBP | DKK | NOK | GBP | DKK | NOK | GBP | | Revenue | 76.8 | 8.2 | 14.9 | 86.2 | 9.5 | 4.4 | 98.7 | 1.3 | — | 100.0 | — | — | | EBITA | 88.3 | 7.5 | 4.3 | 89.1 | 7.5 | 3.3 | 99.1 | 0.9 | — | 100.0 | — | — | (1) The Group only had a portion of its revenue and expenses denominated in British pound sterling from 25 October 2017 onwards, the date when it acquired Hunter Macdonald Ltd. (2) The Group did not have any portion of its revenue or expenses denominated in British pound sterling during this period as this was prior to its acquisition of Hunter Macdonald Ltd and only had a portion of its revenue and expenses denominated in Norwegian kroner from 22 November 2016 onwards, the date when it acquired Mesan AS. (3) The Group did not have any portion of its revenue or expenses denominated in Norwegian kroner or British pound sterling during this period as this was prior to its acquisitions of Hunter Macdonald Ltd and Mesan AS. A change in the average DKK/NOK and DKK/GBP rates by 10% would have had an impact on the Group's revenue of DKK 13.4 million and DKK 6.2 million, respectively, for the year ended 31 December 2017 and on EBITA of DKK 2.8 million and DKK 1.2 million, respectively, for the year ended 31 December 2017. Hence, a hypothetical 10% change in NOK and GBP would have a total impact of DKK 4.0 million foreign currency translation on the Group's EBITA for full-year 2017. The Group has a EUR 148.4 million term loan facility which has been fully hedged through a currency swap to hedge currency risk. In addition, the Group has a DKK 197.2 million term loan facility which has not been hedged. As a result, any currency gains or losses in respect of the DKK/NOK exchange rate will impact the Group's financial items and thereby its EBT. --- The Group translates its foreign-denominated revenue and expenses into Danish kroner at average exchange rates of each reporting period, as required by IFRS. Accordingly, changes in the value of the Danish kroner against other currencies will affect the Group's reported revenue, expenses and results of operations. In particular, changes in exchange rates can affect the Group's margins as its revenue in any one currency is not matched by expenses in the same currency. As the Group continues to develop its multi-country setup, the Group expects that more of its expenses will be incurred in currencies other than those in which the Group bills for the related services. An increase in the value of the Polish zloty or Vietnamese dong against the Danish kroner could increase costs for delivery of services at sites that are used for sourcing purposes only by increasing labour and other costs that are denominated in local currency, without any offsetting increase in the amounts payable to the Group under its contracts with customers. Currency fluctuations will continue to impact the Group's operating profit as a result of the translation of non-Danish kroner revenue and expenses. During the periods under review the Group has applied a treasury policy whereby net currency exposures impacting EBITA within certain thresholds were hedged to eliminate large currency fluctuations. Up to the year ended 31 December 2017, the Group had no material net currency exposures. See also “—Disclosures About Market Risks—Foreign exchange risk”. ## Comparison of Results for the Group for the Three Months Ended 31 March 2018 and 31 March 2017 The following table presents the Group's combined results for the three months ended 31 March 2018 and 2017. | | Three Months ended 31 March | | % change | | --- | --- | --- | --- | | | 2018 | 2017 | 2018 vs. 2017 | | | DKK million | | | | Revenue | 517.0 | 332.9 | 55.3% | | Cost of services | (318.8) | (192.3) | 65.8% | | Gross profit | 198.2 | 140.6 | 41.0% | | Sales and marketing costs | (2.7) | (2.0) | 34.7% | | Administrative costs | (67.7) | (42.8) | 58.0% | | Operating expenses | (70.4) | (44.8) | 56.9% | | Special items | (7.7) | 0.0 | N/A | | EBITA (non-IFRS) | 120.1 | 95.7 | 25.5% | | Amortisation | (28.8) | (23.9) | 20.9% | | EBIT | 91.2 | 71.8 | 27.0% | | Net financials | (24.7) | (23.9) | 3.5% | | EBT | 66.5 | 48.0 | 38.7% | | Tax for the period | (15.3) | (12.1) | 27.2% | | Profit/(loss) for the period | 51.2 | 35.9 | 42.6% | ## Revenue Revenue increased by DKK 184.1 million, or 55.3%, from DKK 332.9 million for the three months ended 31 March 2017 to DKK 517.0 million for the three months ended 31 March 2018, principally due to growth in revenue in Denmark and Norway as well as the acquisition of Hunter Macdonald Ltd. The organic growth for the three months ended 31 March 2018 was a result of significant Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. ## Revenue by operating segment Public sector segment revenue accounted for 55.3% and 45.8% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Private sector segment revenue accounted for 44.7% and 54.2% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Public sector segment revenue increased by DKK 133.2 million, or 87.3%, from DKK 152.6 million for the three months ended 31 March 2017 to DKK 285.8 million for the three months ended 31 March 2018. Organic revenue growth was 80.7%, primarily driven by Danish Public sector tender wins in 2015, 2016 and 2017 that the Group worked on during the three months ended 31 March 2018. Of the DKK 285.8 million in Public sector --- segment revenue for the three months ended 31 March 2018, DKK 11.8 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the three months ended 31 March 2017 would have been DKK 152.6 million. Private sector segment revenue increased by DKK 50.9 million, or 28.2%, from DKK 180.3 million for the three months ended 31 March 2017 to DKK 231.2 million for the three months ended 31 March 2018. Organic revenue growth decreased by 7.2%, largely attributable to the increased focus on the public sector segment which has required a large part of the Danish, Polish and Norwegian workforce to complete and deliver those projects. Of the DKK 231.2 million in Private sector segment revenue for the three months ended 31 March 2018, DKK 65.3 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the three months ended 31 March 2017 would have been DKK 180.3 million. ## Revenue by geography Denmark accounted for 76.8% and 89.5% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Norway accounted for 8.2% and 10.5% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Reflecting the first full period of consolidation of Hunter Macdonald Ltd, following the completion of the acquisition in October 2017, the United Kingdom accounted for 14.9% of total Group revenue for the three months ended 31 March 2018. ## Revenue by service Development revenue accounted for 43.2% and 42.2% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively, and maintenance and operations revenue accounted for 56.8% and 57.8% of total Group revenue for the three months ended 31 March 2018 and 2017, respectively. Development revenue increased by DKK 82.5 million, or 58.7%, from DKK 140.6 million for the three months ended 31 March 2017 to DKK 223.2 million for the three months ended 31 March 2018, principally due to an increase in development revenue in the Group's Public sector segment, which increased by DKK 40.5 million as well as an increase in development revenue in the Group's Private sector segment, which increased by DKK 42.1 million. Maintenance and operations revenue increased by DKK 101.6 million, or 52.8%, from DKK 192.3 million for the three months ended 31 March 2017 to DKK 293.8 million for the three months ended 31 March 2018, principally due to an increase in the maintenance revenue in the Group's Public sector segment, which increased by DKK 92.7 million as well as an increase in maintenance revenue in the Group's Private sector segment, which increased by DKK 8.8 million. ## Cost of services Cost of services increased by DKK 126.5 million, or 65.8%, from DKK 192.3 million for the three months ended 31 March 2017 to DKK 318.8 million for the three months ended 31 March 2018, principally due to the Group significantly increasing its number of customer facing FTEs and use of subcontractors. | | Three Months ended 31 March | | % change | | --- | --- | --- | --- | | | 2018 | 2017 | 2018 vs. 2017 | | | DKK million | | | | Staff costs | 213.5 | 158.5 | 34.7% | | Project costs | 105.3 | 33.8 | 211.4% | | Total cost of services | 318.8 | 192.3 | 65.8% | ## Gross profit Gross profit increased by DKK 57.6 million, or 41.0%, from DKK 140.6 million for the three months ended 31 March 2017 to DKK 198.2 million for the three months ended 31 March 2018, principally due to increases in organic revenue and the increase in revenue generated due to the acquisition of Hunter Macdonald Ltd. Gross profit margin decreased from 42.2% for the three months ended 31 March 2017 to 38.3% for the three months ended 31 March 2018, primarily driven by the Group's UK operations, which have a significantly higher share of --- costs due the use of subcontractors which are more expensive compared to the Group's permanent employees in other jurisdictions. This diluted the Group's gross profit margin by 3.9 percentage points in the three months ended 31 March 2018 compared to three months ended 31 March 2017. ## Sales and marketing costs Sales and marketing costs increased by DKK 0.7 million, or 34.7%, from DKK 2.0 million for the three months ended 31 March 2017 to DKK 2.7 million for the three months ended 31 March 2018, principally due to the purchase of Netcompany UK and related to change in company name, website, merchandise and branding toward customers. ## Administrative costs Administrative costs increased by DKK 24.8 million, or 58.0%, from DKK 42.8 million for the three months ended 31 March 2017 to DKK 67.7 million for the three months ended 31 March 2018, principally due to an increase in lease costs relating to the expansion of the office space in Denmark to accommodate the Group's expanding workforce, as well as to the inclusion of office space in the UK relating to the acquisition of Hunter Macdonald Ltd. The increase in administrative costs was slightly offset by the economies of scale in office space relative to FTEs that the Group was able to achieve as it increased its number of FTEs and was able to fill more of the office space it had previously leased and by the rollout of the Group's new ERP-system to its operations in Norway and the UK. | | Three Months ended 31 March | | % change | | --- | --- | --- | --- | | | 2018 | 2017 | 2018 vs. 2017 | | | DKK million | | | | Staff costs | 23.0 | 13.2 | 73.4% | | Other costs | 44.7 | 29.6 | 51.1% | | Total administrative costs | 67.7 | 42.8 | 58.0% | ## Operating expenses Operating expenses increased by DKK 25.5 million, or 56.9%, from DKK 44.8 million for the three months ended 31 March 2017 to DKK 70.4 million for the three months ended 31 March 2018, principally due to the increase in administrative costs, which accounted for more than 95% of the Group's total operating expenses. ## Adjusted EBITA Adjusted EBITA increased by DKK 32.1 million, or 33.5%, from DKK 95.7 million for the three months ended 31 March 2017 to DKK 127.8 million for the three months ended 31 March 2018, principally due to the increase in revenue. Adjusted EBITA margin decreased from 28.8% for the three months ended 31 March 2017 to 24.7% for the three months ended 31 March 2018, principally due to higher costs in the United Kingdom attributable to the higher proportion of subcontractors used in the United Kingdom compared to Denmark and Norway. As a result, gross profit margin decreased from 42.2% for the three months ended 31 March 2017 to 38.3% for the three months ended 31 March 2018. ## Special items Special items increased from DKK nil for the three months ended 31 March 2017 to DKK 7.7 million for the three months ended 31 March 2018, of which DKK 1.0 million related to the strategic considerations regarding the future of the Group and DKK 6.7 million related the acquisition of Hunter Macdonald Ltd. ## EBITA EBITA increased by DKK 24.4 million, or 25.5%, from DKK 95.7 million for the three months ended 31 March 2017 to DKK 120.1 million for the three months ended 31 March 2018, principally due to the increase in gross profit. This resulted in a decrease in EBITA margin from 28.7% for the three months that ended 31 March 2017 to 23.2% for the three months that ended 31 March 2018, principally due to the decrease in gross profit margin and higher level of special items. 158 --- 159 # Amortisation Amortisation increased by DKK 5.0 million, or 20.9%, from DKK 23.9 million for the three months ended 31 March 2017 to DKK 28.8 million for the three months ended 31 March 2018, principally due to the acquisition of Hunter Macdonald Ltd (which impacted the Group’s reported numbers from 25 October 2017 onwards). # EBIT EBIT increased by DKK 19.4 million, or 27.0%, from DKK 71.8 million for the three months ended 31 March 2017 to DKK 91.2 million for the three months ended 31 March 2018, principally due to the continued high levels of activity in all of the Group’s business units. Costs associated with amortisation increased, principally due to the acquisition of Hunter Macdonald Ltd, as noted above. This led to a decrease in operating profit margin from 21.6% for the three months ended 31 March 2017 to 17.6% for the three months ended 31 March 2018, which was primarily driven by a decrease in EBITA margin, as Hunter Macdonald Ltd was fully included in the Group’s reported numbers for the three months ended 31 March 2018, as well as an increase in amortisation. # Net financials Net financial expenses increased by DKK 0.8 million, or 3.5%, from expenses of DKK 23.9 million for the three months ended 31 March 2017 to DKK 24.7 million for the three months ended 31 March 2018, principally due to the acquisition of Hunter Macdonald Ltd, which was partly financed by additional borrowings and bank guarantees, that were issued in accordance with formal tender requirements and secured against some of the Group’s large Danish Public sector tender wins. # EBT EBT increased by DKK 18.6 million, or 38.7%, from DKK 48.0 million for the three months ended 31 March 2017 to DKK 66.5 million for the three months ended 31 March 2018, principally due to the increase in FTE activity levels throughout the year that in turn generated an increase in Group revenue. # Tax for the period The Group’s effective tax rate decreased by 2.1 percentage points from 25.2% for the three months ended 31 March 2017 to 23.1% for the three months ended 31 March 2018, principally due to the optimisation of the Group’s debt structure to increase the limit in tax deductible interest compared to the prior period. # Profit/(loss) for the period Profit for the period increased by DKK 15.3 million, or 42.6%, from DKK 35.9 million for the three months ended 31 March 2017 to DKK 51.2 million for the three months ended 31 March 2018. --- 160 # Comparison of Results for the Group for the Years Ended 31 December 2017 and 31 December 2016 The following table presents the Group’s combined results for the years ended 31 December 2017 and 2016. | | Year ended 31 December | | % change | | --- | --- | --- | --- | | | 2017 | 2016(1) | 2017 vs. 2016 | | | DKK million | | | | Revenue | 1,416.1 | 899.6 | 57.4% | | Cost of services | (803.4) | (527.0) | 52.4% | | Gross profit | 612.7 | 372.6 | 64.4% | | Sales and marketing costs | (9.7) | (3.7) | 160.6% | | Administrative costs | (201.0) | (120.9) | 66.3% | | Operating expenses | (210.7) | (124.6) | 69.1% | | Special items | (32.9) | (35.1) | (6.3%) | | EBITA (non-IFRS) | 369.0 | 212.9 | 73.3% | | Amortisation | (95.9) | (73.8) | 29.9% | | EBIT | 273.2 | 139.1 | 96.4% | | Net financials | (72.2) | (62.7) | 15.1% | | EBT | 201.0 | 76.4 | 163.1% | | Tax for the year | (59.4) | (43.6) | 36.2% | | Profit/(loss) for the year | 141.6 | 32.8 | 332.4% | (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S which, in total, comprise the Group. ## Revenue Revenue increased by DKK 516.5 million, or 57.4%, from DKK 899.6 million in 2016 to DKK 1,416.1 million in 2017, principally due to organic growth in Denmark of DKK 332.4 million compared to DKK 129.8 million in 2016 and additional revenue of DKK 133.9 million and DKK 61.9 million generated due to the acquisitions of Mesan AS and Hunter Macdonald Ltd, respectively. The organic growth in 2017 was a result of significant Public sector tender wins in 2015 and 2016 that the Group worked on during 2017, along with wins of additional Public sector tenders in 2017, due to prospects brought into the Group following the acquisitions of Mesan AS and Hunter Macdonald Ltd from their respective dates of consolidation. ## Revenue by operating segment Public sector segment revenue accounted for 51.6% and 40.9% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Private sector segment revenue accounted for 48.4% and 59.1% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Public sector segment revenue increased by DKK 361.8 million, or 98.2%, from DKK 368.3 million for the year ended 31 December 2016 to DKK 730.2 million for the year ended 31 December 2017. Organic revenue growth was 76.2% and 17.4% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the large public tenders won by the Group in Denmark in 2016 and 2017. Of the DKK 730.2 million in Public sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Public sector segment revenue for the year ended 31 December 2017 would have been DKK 699.2 million. Private sector segment revenue increased by DKK 154.6 million, or 29.1%, from DKK 531.3 million for the year ended 31 December 2016 to DKK 685.9 million for the year ended 31 December 2017. Organic revenue growth was 9.7% and 16.9% for the years ended 31 December 2017 and 2016, respectively, primarily driven by the renewal by several of the Group’s large Danish customers of their engagements, as well as by the Group winning new major customers during the periods. Of the DKK 685.9 million in Private sector segment revenue for the year ended 31 December 2017, DKK 30.9 million was attributable to Hunter Macdonald Ltd. Adjusting for the Hunter Macdonald Ltd acquisition which closed on 25 October 2017, Private sector segment revenue for the year ended 31 December 2017 would have been DKK 655.0 million. --- 161 # Revenue by geography Denmark accounted for 86.2% and 98.7% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Norway accounted for 9.5% and 1.3% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. The UK accounted for 4.4% and 0.0% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. # Revenue by service Development revenue accounted for 45.7% and 48.7% of total Group revenue for the years ended 31 December 2017 and 2016, respectively, and maintenance and operations revenue accounted for 54.3% and 51.3% of total Group revenue for the years ended 31 December 2017 and 2016, respectively. Development revenue increased by DKK 208.5 million, or 47.5%, from DKK 438.4 million for the year ended 31 December 2016 to DKK 646.9 million for the year ended 31 December 2017, principally due to the large public tenders the Group won during the periods. Maintenance and operations revenue increased by DKK 308.0 million, or 66.8%, from DKK 461.2 million for the year ended 31 December 2016 to DKK 769.2 million for the year ended 31 December 2017, principally due to several of the Group's Private sector engagements moving from the development to maintenance phase during 2017. # Cost of services Cost of services increased by DKK 276.4 million, or 52.4%, from DKK 527.0 million in 2016 to DKK 803.4 million in 2017, principally due to the increase in revenue during the periods which led the Group to significantly increase its number of client facing FTEs and use of freelancers. | | Year ended 31 December | | % change | | --- | --- | --- | --- | | | 2017 | 2016 | 2017 vs. 2016 | | | DKK million | | | | Staff costs | 624.1 | 438.5 | 42.3% | | Project costs | 179.3 | 88.5 | 102.6% | | Total cost of services | 803.4 | 527.0 | 52.4% | # Gross profit Gross profit increased by DKK 240.1 million, or 64.4%, from DKK 372.6 million in 2016 to DKK 612.7 million in 2017, principally due to the increase in revenue generated due to the acquisitions of Mesan AS and Hunter Macdonald Ltd. Gross profit margin increased from 41.4% in 2016 to 43.3% in 2017, primarily driven by lower business development costs as less hours were spent on responding to tender requests in 2017 compared with 2016. The increase in gross profit margin was diluted by 0.8 percentage points by the acquisition of Hunter Macdonald Ltd, as it had a significantly higher share of costs due to it hiring subcontractors which are more expensive compared to the Group's existing businesses which have a higher proportion of permanent employees rather than subcontractors. In addition, the acquisition of Mesan AS diluted the gross profit margin by 0.5 percentage points, primarily due to its lower utilisation rate compared to the Group average. # Sales and marketing costs Sales and marketing costs increased DKK 6.0 million, or 160.6%, from DKK 3.7 million in 2016 to DKK 9.7 million in 2017. The increase in sales and marketing costs was primarily driven by the purchases of Mesan AS and Hunter Macdonald Ltd, which led to increased sales and marketing costs in 2017, due to the changes in company names, websites, merchandise and branding towards customers. # Administrative costs Administrative costs increased DKK 80.1 million, or 66.3%, from DKK 120.9 million in 2016 to DKK 201.0 million in 2017. The increase was mainly driven by costs related to the implementation of a new corporate ERP-system, recruitment costs and an increase in lease costs relating to the expansion of office space in Denmark to accommodate the expanding workforce. The increase in administrative costs was slightly offset by the --- economies of scale in office space relative to FTEs that the Group was able to achieve as it increased its number of FTEs and was able to fill more of the office space it had previously leased and by the rollout of the Group's new ERP-system to its operations in Norway and the UK. | | Year ended 31 December | | % change | | --- | --- | --- | --- | | | 2017 | 2016 | 2017 vs. 2016 | | | DKK million | | | | Staff costs | 65.0 | 30.4 | 114.2% | | Other | 136.0 | 90.5 | 50.3% | | Total administrative costs | 201.0 | 120.9 | 66.3% | ## Operating expenses Operating expenses increased by DKK 86.1 million, or 69.1%, from DKK 124.6 million in 2016 to DKK 210.7 million in 2017, principally due to the increase in administrative costs which account for more than 95% of total operating expenses. ## Adjusted EBITA Adjusted EBITA increased by DKK 153.9 million, or 62.1%, from DKK 248.0 million in 2016 to DKK 402.0 million in 2017, principally due to the increased FTE activity level in 2017. Further, margins improved as a result of continued operational leverage in delivering projects. ## Special items Special items decreased by DKK 2.2 million, or 6.3%, from DKK 35.1 million in 2016 to DKK 32.9 million in 2017. In 2017, DKK 17.5 million of the Group's special items related to strategic considerations regarding the future of the Group and DKK 15.5 million related to mergers and acquisitions transaction costs, while in 2016, DKK 29.4 million of the Group's special items related to the transaction where the Significant Shareholders acquired a majority stake in the Group and DKK 5.7 million related to the purchase of Mesan AS. ## EBITA EBITA increased by DKK 156.2 million, or 73.3%, from DKK 212.9 million in 2016 to DKK 369.0 million in 2017. This resulted in an increase in EBITA margin from 23.7% in 2016 to 26.1% in 2017, which was primarily driven by the improved gross profit margin and lower level of special items. ## Amortisation Amortisation increased by DKK 22.1 million, or 29.9%, from DKK 73.8 million in 2016 to DKK 95.9 million in 2017, principally due to the acquisitions of Mesan AS, which only fully impacted Group amortisation in 2017, and Hunter Macdonald Ltd (which impacted the Group's reported numbers from 25 October 2017 onwards). ## EBIT EBIT increased by DKK 134.1 million, or 96.4%, from DKK 139.1 million in 2016 to DKK 273.2 million in 2017. This led to an increase in operating profit margin from 15.5% in 2016 to 19.3% in 2017, which was primarily driven by an increase in EBITA margin, as well as a relatively lower increase in amortisation compared to the Group's increased revenue. ## Net Financials Net financial expenses increased DKK 9.5 million, or 15.1%, from net financial expenses of DKK 62.7 million in 2016 to net financial expenses of DKK 72.2 million in 2017. The increase in net financial expenses was primarily driven by the financing of the Mesan AS acquisition, which only had full financial effect on the Group in 2017. In addition, the purchase of Hunter Macdonald Ltd in October 2017, which was partly financed by additional borrowings, contributed to the increase in financial expenses. ## EBT EBT increased by DKK 124.6 million, or 163.1%, from DKK 76.4 million in 2016 to DKK 201.0 million in 2017, principally due to increase in FTE activity level realised throughout the year. 162 --- 163 # Tax for the year The Group’s effective tax rate in 2017 was 29.6%, compared to 57.1% in 2016. The high tax rate in 2016 was due to limitations in the Group’s use of the interest deduction rules under Danish tax law following the transaction in February 2016, where the Significant Shareholders acquired a majority stake in the Group. In 2017, the Group was less impacted by the interest deduction limitation rules lowering the Group’s effective tax rate in that year. # Profit/(loss) for the year Profit for the year increased by DKK 108.9 million, or 332.4%, from DKK 32.8 million in 2016 to DKK 141.6 million in 2017. # Comparison of Results for the Group for the Years Ended 31 December 2016 and 31 December 2015 The following table presents the Group’s combined results for the years ended 31 December 2016 and 2015. | | Year ended 31 December | | % change | | --- | --- | --- | --- | | | 2016(1) | 2015 | 2016 vs. 2015 | | | DKK million | | | | Revenue | 899.6 | 758.1 | 18.7% | | Cost of services | (527.0) | (446.8) | 17.9% | | Gross profit | 372.6 | 311.3 | 19.7% | | Sales and marketing costs | (3.7) | (3.8) | (2.4)% | | Administrative costs | (120.9) | (100.1) | 20.8% | | Operating expenses | (124.6) | (103.9) | 19.9% | | Special items | (35.1) | — | N/A | | EBITA | 212.9 | 207.4 | 2.7% | | Amortisation | (73.8) | — | N/A | | EBIT | 139.1 | 207.4 | (32.9)% | | Net Financials | (62.7) | 0.2 | (26,165.8)% | | EBT | 76.4 | 207.6 | (63.2)% | | Tax for the year | (43.6) | (19.8) | 120.1% | | Profit/(loss) for the year | 32.8 | 187.8 | (82.6)% | (1) On 1 February 2016, as part of the transaction where the Significant Shareholders acquired a majority stake in the Group, the Group acquired Netcompany A/S and NC TopCo A/S became its parent holding company. The combined financial statement for the year ended 31 December 2016 consists of the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S which, in total, comprise the Group. # Revenue Revenue increased by DKK 141.5 million, or 18.7%, from DKK 758.1 million in 2015 to DKK 899.6 million in 2016, driven by the increase in revenue of DKK 56.9 million in the Public sector segment and an increase of DKK 84.6 million in the Private sector segment. # Revenue by operating segment Public sector segment revenue accounted for 40.9% and 41.1% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Private sector segment revenue accounted for 59.1% and 58.9% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Public sector segment revenue increased by DKK 56.9 million, or 18.3%, from DKK 311.5 million for the year ended 31 December 2015 to DKK 368.3 million for the year ended 31 December 2016. Organic revenue growth was 17.4% and 16.8% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 368.3 million in Public sector segment revenue for the year ended 31 December 2016, DKK 2.8 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Public sector segment revenue for the year ended 31 December 2016 would have been DKK 365.6 million. Private sector segment revenue increased by DKK 84.6 million, or 19.0%, from DKK 446.6 million for the year ended 31 December 2015 to DKK 531.3 million for the year ended 31 December 2016. Organic revenue --- growth was 16.9% and 23.2% for the years ended 31 December 2016 and 2015, respectively. Of the DKK 531.3 million in Private sector segment revenue for the year ended 31 December 2016, DKK 9.0 million was attributable to Mesan AS. Adjusting for the Mesan AS acquisition which closed on 22 November 2016, Private sector segment revenue for the year ended 31 December 2016 would have been DKK 522.3 million. ## Revenue by geography Denmark accounted for 98.7% and 100% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Norway accounted for 1.3% and 0% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. ## Revenue by service Development revenue accounted for 48.7% and 45.8% of total Group revenue for the years ended 31 December 2016 and 2015, respectively, and maintenance and operations revenue accounted for 51.3% and 54.2% of total Group revenue for the years ended 31 December 2016 and 2015, respectively. Development revenue increased by DKK 91.4 million, or 26.3%, from DKK 347.0 million for the year ended 31 December 2015 to DKK 438.4 million for the year ended 31 December 2016, principally due to the Group's large public tender wins in 2016. Maintenance revenue decreased by DKK 50.1 million, or 12.2%, from DKK 411.1 million for the year ended 31 December 2015 to DKK 461.2 million for the year ended 31 December 2016, principally due to the Group's large public tender wins in 2016 and as a consequence due to the additional employees being engaged in delivering these services. ## Cost of services Cost of services increased by DKK 80.2 million, or 17.9%, from DKK 446.8 million in 2015 to DKK 527.0 million in 2016, principally due to the higher FTE activity level which led to an increased number of FTEs. | | Year ended 31 December | | % change | | --- | --- | --- | --- | | | 2016 | 2015 | 2016 vs. 2015 | | | DKK million | | | | Staff costs | 438.5 | 376.5 | 16.5% | | Project costs | 88.5 | 70.3 | 25.8% | | Total cost of services | 527.0 | 446.8 | 17.9% | ## Gross profit Gross profit increased by DKK 61.4 million, or 19.7%, from DKK 311.3 million in 2015 to DKK 372.6 million in 2016, principally due to the relatively larger increase in revenue than the costs associated with generating this revenue. Gross profit margin increased from 41.1% in 2015 to 41.4% in 2016, primarily driven by higher average hourly rate, which was somewhat offset by more business development expenses in 2016. ## Sales and marketing costs Sales and marketing costs decreased by DKK 0.1 million, or 2.4%, from DKK 3.8 million in 2015 to DKK 3.7 million in 2016, primarily driven by a planned marketing event for 2016 that was ultimately postponed to 2017. 164 --- 165 # Administrative costs Administrative costs increased by DKK 20.8 million, or 20.8%, from DKK 100.1 million in 2015 to DKK 120.9 million in 2016, due to an increase of employees in human resources and finance functions to support the Group’s growth and to the increase in office space in Denmark to accommodate the increase in FTEs. | | Year ended 31 December | | % change | | --- | --- | --- | --- | | | 2016 | 2015 | 2016 vs. 2015 | | | DKK million | | | | Staff costs | 30.4 | 23.4 | 30.0% | | Other | 90.5 | 76.7 | 18.0% | | Total administrative costs | 120.9 | 100.1 | 20.8% | # Special Items Special items amounted to DKK 35.1 million in 2016 and constituted costs related to the transaction where the Significant Shareholders acquired a majority stake in the Group, and the acquisition of Mesan AS. # EBITA EBITA increased by DKK 5.5 million, or 2.7%, from DKK 207.4 million in 2015 to DKK 212.9 million in 2016, which led to an EBITA margin decrease from 27.4% in 2015 to 23.7% in 2016, driven by the increase in special items. # Adjusted EBITA Adjusted EBITA increased by DKK 40.7 million, or 19.6%, from DKK 207.4 million in 2015 to DKK 248.0 million in 2016, due to the increase in gross profit margin and a lower increase in administration, sales and marketing costs relative to the increase in Group revenue. # Amortisation Amortisation amounted to DKK 73.8 million in 2016 as a result of the transaction where the Significant Shareholders acquired a majority stake in the Group, and due to the acquisition of Mesan AS. # EBIT EBIT decreased by DKK 68.3 million, or 32.9%, from DKK 207.4 million in 2015 to DKK 139.1 million in 2016, due to the increase in amortisation. # Net financials Net financial expenses increased DKK 62.9 million in 2016, from financial income of DKK 0.2 million in 2015 to financial expenses of DKK 62.7 million in 2016, primarily related to the transaction where the Significant Shareholders acquired a majority stake in the Group, and due to the acquisition of Mesan AS. # EBT EBT decreased by DKK 131.2 million, or 63.2%, from DKK 207.6 million in 2015 to DKK 76.4 million in 2016, principally due to an increase in EBIT and an increase in net financials. # Tax for the year The Group’s effective tax rate increased by 47.6 percentage points from 9.5% in 2015 to 57.1% in 2016, principally due to an increase in special items which were not tax deductible, as well as limitations in the Group’s use of the interest deduction rules under Danish tax law following the transaction in February 2016, where the Significant Shareholders acquired a majority stake in the Group. Further, the Group’s low effective tax rate in 2015 was principally due to its use of carry-forward losses relating to its purchase of Tieto Denmark A/S in 2013. # Profit/(loss) for the year Profit for the year decreased by DKK 155.0 million, or 82.6%, from DKK 187.8 million in 2015 to DKK 32.8 million in 2016. --- # Liquidity and Capital Resources ## Overview The Group finances both its short-term and long-term liquidity requirements principally from cash flow from operating activities, liquid funds and liquidity under its DKK 150 million credit facility and a DKK 400 million acquisition facility as described in “—Financing Arrangements and Commitments” below. The Group’s liquidity requirements previously related to funding its working capital requirements and the purchase of tangible assets, such as hardware for its data centre and servers for its projects. ## Working capital The Group defines working capital as its current assets minus its current liabilities. The most significant components of the Group’s working capital are trade payables and trade receivables, including work in progress. Trade payables comprise payables to the suppliers in relation to hired labour and materials, as well as employee-related costs and tax liabilities. The level of trade payables mainly relates to the payment terms of the Group’s suppliers, which are generally due 45 days after the receipt of satisfactory invoice. Trade receivables comprise payments due to the Group by its customers. The aging of the Group’s trade receivables and its days of sales outstanding as at 31 December 2017, 2016 and 2015 are shown in the table below. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million | | | | | | Not due at balance sheet date | 197.5 | 148.0 | 314.9 | 193.3 | 123.8 | | Overdue between 1 and 30 days | 80.6 | 26.4 | 75.0 | 53.1 | 40.8 | | Overdue between 31 and 60 days | 13.9 | 1.5 | 22.5 | 9.9 | 6.3 | | Overdue with more than 61 days | 26.7 | 17.6 | 33.0 | 1.9 | 9.4 | | Total trade receivables | 318.7 | 193.6 | 445.4 | 258.2 | 180.3 | | Days of sales outstanding | 56.3 | 53.1 | 114.8 | 104.8 | 86.8 | The Group’s trade receivables balance has generally increased between 2015 and 31 March 2018 due to the increase in revenue over the period. The Group conducts individual assessments of bad debts. If this leads to an estimation that the Group will not be able to collect all outstanding payments, a provision for bad debt is made. The Group uses the days of sales outstanding ratio to track its ability to receive payment from customers after the sale of its services and solutions. In 2017, the Group’s free cash flow was DKK 307.3 million, compared with DKK 213.6 million in 2016. This equalled a cash-to-earnings ratio of 76.4% at 31 December 2017 (31 December 2016: 91.6%). This decrease in cash-to-earnings ratio was due to an increase in negative working capital changes, primarily driven by a lower increase in other payables relative to the increase in EBITDA for the period. In 2016, the Group’s free cash flow was DKK 213.6 million, compared with DKK 237.2 million in 2015. This equalled a cash-to-earnings ratio of 91.6% at 31 December 2016 (31 December 2015: 104.0%). The decrease in cash-to-earnings ratio was principally driven by an increase in negative working capital changes, primarily driven by a higher increase in trade receivables and work in progress relative to the increase in revenue for the period. The Group’s business has significant seasonality of cash generation, with cash in the second half of the year usually being higher, principally due to customer payments collections, and the first quarter usually being the time of the year in which the Group’s cash is lowest, due to the pay out of bonuses earned in the prior calendar year and the payment of dividends. The Group believes that the working capital available to it is, at the time of completion of the IPO Reorganisation, sufficient for its present requirements for the next twelve months following the date of this Offering Circular. The working capital of the Group and its need thereof is directly tied to completion of the Refinancing, which is subject to completion of the Offering. ## No Significant Change As of the date of this Offering Circular, there have been no significant changes to the Group’s financial condition and operating results since 31 March 2018. --- # Cash flow analysis The following table presents the primary components of the Group's cash flow for the years ended 31 December 2017, 2016 and 2015 and for the three months ended 31 March 2018 and 2017: | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016(2) | 2015 | | | DKK million | | | | | | EBIT | 91.2 | 71.8 | 273.2 | 139.1 | 207.4 | | Depreciation and amortization | 38.5 | 27.7 | 129.2 | 94.2 | 20.6 | | Working capital changes | (35.0) | (20.7) | (95.0) | (19.6) | 9.1 | | Free cash flow(1) | 94.7 | 78.9 | 307.3 | 213.6 | 237.2 | | Paid taxes | (10.4) | (19.4) | (35.4) | (34.0) | (20.6) | | Net financials | (13.3) | (15.6) | (76.6) | (62.7) | 0.2 | | Cash flows from operating activities | 71.1 | 43.8 | 195.3 | 116.9 | 216.8 | | Net cash outflow on acquisition of subsidiaries | — | 0.0 | (120.3) | (2,516.1) | 0.0 | | Acquisition of intangible assets | — | 0.0 | (11.1) | (9.2) | (5.9) | | Acquisition of property, plant and equipment | (3.5) | (4.9) | (16.7) | (13.0) | (3.0) | | Other receivables (deposits) | (1.1) | 0.0 | (2.3) | (1.5) | (0.6) | | Cash flows from investing activities | (4.6) | (4.9) | (150.5) | (2,539.7) | (9.6) | | Dividends | — | 0.0 | 0.0 | (116.4) | (100.0) | | Proceeds from issue of share capital | 6.9 | 3.9 | 16.7 | 1,265.1 | 0.0 | | Proceeds from borrowings | — | 0.0 | 92.0 | 1,178.0 | 0.0 | | Repayment of borrowing | (114.7) | (3.9) | (16.6) | (11.0) | (8.6) | | Cash flows from financing activities | (107.7) | 0.0 | 92.2 | 2,315.7 | (108.6) | | Net cash flow | (41.2) | 38.9 | 137.0 | (107.0) | 98.6 | | Cash and cash equivalents at beginning of period | 194.5 | 32.0 | 32.0 | 111.5 | 12.9 | | Cash and cash equivalents balances acquired | — | 0.0 | 26.3 | 27.6 | 0.0 | | Effect of exchange rate changes on the balance cash held in foreign currencies | 1.0 | (0.2) | (0.8) | (0.1) | 0.0 | | Cash and cash equivalents at end of period | 154.2 | 70.7 | 194.5 | 32.0 | 111.5 | (1) Free cash flow is defined as cash flow from operating activities less cash flow from paid taxes, net financials and investing activities. (2) Cash flow during the period was impacted due to the Significant Shareholders acquiring a majority stake in the Group in February 2016 and a subsequent capital increase of DKK 1.3 billion. To allow for meaningful comparison between the full-year numbers, the cash flow for the year ended 31 December 2016 shows the combined 11 month reported figures of NC TopCo A/S covering the period from 1 February to 31 December 2016 and the one month of January 2016 reported figures of Netcompany A/S which, in total, comprise the Group. # Cash flow from operating activities Cash flow from operating activities was DKK 71.1 million in the first quarter of 2018, DKK 27.2 million, or 62.1%, higher than the Group's cash flow from operating activities of DKK 43.8 million in the first quarter of 2017. This increase was principally due to an increase in EBITA as well as positive changes in net working capital. Cash flow from operating activities was DKK 195.3 million in 2017, DKK 78.4 million, or 67.1%, higher than the Group's cash flow from operating activities of DKK 116.9 million in 2016. This increase was principally due to the increase in free cash flow. Cash flow from operating activities was DKK 116.9 million in 2016, DKK 99.9 million, or 46.1%, lower than the Group's cash flow from operating activities of DKK 216.8 million in 2015. This decrease was principally due to the decrease in free cash flow and an increase in financing expenses in 2016 compared to 2015, as the Group did not have any debt in 2015. # Cash flow from investing activities Cash used in investing activities was DKK 4.6 million in the first quarter of 2018, DKK 0.3 million, or 7.0%, lower than the Group's cash used in investing activities of DKK 4.9 million in the first quarter of 2017. This decrease was principally due to a lower amount of investment in office space relating to the Group's Danish offices. --- Cash used in investing activities was DKK 150.5 million in 2017, DKK 2,389.2 million lower than the Group's cash used in investing activities of DKK 2,539.7 million in 2016. This decrease was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016. Investing activities in 2017 were primarily related to the acquisition of Hunter Macdonald Ltd. Cash used in investing activities was DKK 2,539.7 million in 2016, DKK 2,530.1 million higher than the Group's cash used in investing activities of DKK 9.6 million in 2015. This increase was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016. ## Cash flow from financing activities Cash used in financing activities was DKK 107.7 million in the first quarter of 2018, DKK 107.7 million higher than the Group's cash flow from financing activities of DKK 0.0 million in the first quarter of 2017. This increase was principally due to the repayment of debt of DKK 114.7 million during the first quarter of 2018. Cash flow from financing activities was DKK 92.2 million in 2017, DKK 2,223.6 million lower than the Group's cash flow from financing activities of DKK 2,315.7 million in 2016. This increase was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016, while 2017 was impacted by the Group acquiring the shares in Hunter Macdonald Ltd. Cash flow from financing activities was DKK 2,315.7 million in 2016, DKK 2,424.4 million higher than the Group's cash used in financing activities of DKK (108.6) million in 2015. This increase was principally due to the transaction where the Significant Shareholders acquired a majority stake in the Group and subsequent capital increase of DKK 1.3 billion, and the acquisition of Mesan AS in 2016, while 2015 was impacted by the payment of a dividend to shareholders. ## Financing Arrangements and Commitments ### Description of the New Facilities Concurrently with the Offering, the Group will refinance certain of its existing indebtedness using a combination of the following facilities (the "New Facilities"): (i) a DKK 750 million term ("Term Loan Facility") facility with a final maturity date of five years after the date of first utilisation of the Term Loan Facility (the "Closing Date"); and (ii) a DKK 750 million multicurrency revolving credit facility with a final maturity date of five years after the Closing Date, which may be utilised in DKK, EUR, GBP, NOK, PLN, SEK and any other currency readily available and freely convertible into DKK and approved by the relevant lenders (the "Revolving Facility") (the "Refinancing"). The New Facilities include an option (the "Accordion Option") for the Group to request (on more than one occasion) that the lenders establish new term loan facilities by up to DKK 400 million in total. The New Facilities are provided for pursuant to a facilities agreement (the "New Facilities Agreement") entered into on 7 May 2018, by inter alios the Company, NC TopCo A/S, NC NewCo A/S, Netcompany Holding I A/S and Netcompany A/S and Danske Bank A/S, Nordea Danmark, filial af Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as mandated lead arrangers, and Danske Bank A/S as agent. Other Group entities may accede to the New Facilities Agreement from time to time. The New Facilities are unsecured but are guaranteed by the Company and Netcompany A/S, subject to certain customary limitations. The New Facilities will be available to be drawn upon by the Company, NC TopCo A/S, NC NewCo A/S, Netcompany Holding I A/S and Netcompany A/S on and from Settlement Date to repay the outstanding amounts under the Group's existing indebtedness. The Term Loan Facility may be used for the Refinancing and paying fees, costs and expenses associated with the Offering, and the Revolving Facility may be used for the Refinancing, and for general corporate purposes of the Group (including, but not limited to, for investments and capital expenditure and paying fees, costs and expenses associated with the Offering). Any additional amounts made available if the lenders consent to an exercise of the Accordion Option may be used for acquisitions. The interest rate payable on a loan under each New Facility for each interest period is the applicable floating rate (by reference to the currency of that loan) plus a margin. Hence, the applicable rate for each currency denomination will be the corresponding IBOR rate, subject, however, to a floor of zero. The margin is subject to a margin ratchet which varies based on the ratio of the Group's total debt (calculated on a net basis and excluding any cash or cash equivalent investments 168 --- held by the Group) to its consolidated Adjusted EBITA, ranging from 1.10 to 2.10% per annum for each New Facility. Under certain circumstances, the margin for drawing of loans in other currencies than DKK or EUR may be subject to a funding premium. The New Facilities Agreement contains customary warranties, representations, covenants (including limited restrictions on disposals, mergers, change of business, a negative pledge and a restriction on the incurrence of indebtedness by other members of the Group than the Company) and customary events of default (in each case, subject to customary agreed exceptions, materiality tests, carve-outs and grace periods). The New Facilities may only be drawn if the agent under the New Facilities Agreement has received customary conditions precedent documents from certain members of the Group including evidence that the Group's existing indebtedness will be repaid from the proceeds from the New Facilities. In addition, the New Facilities Agreement also contains a leverage financial covenant, which will be tested on a quarterly basis starting on 30 June 2018, which the Group must comply with. The leverage covenant relates to the net debt to Adjusted EBITA (adjusted pro forma for any acquisition, disposals and other group initiatives in the relevant test period) ratio, which shall not exceed 3.50. The New Facilities Agreement is governed by Danish law. ## Group The following table sets forth the terms and maturity of the Group's interest-bearing loans, facilities and borrowings for the year ended 31 December 2017. | | Group | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | Nominal interest rate | Average effective interest rate | Currency | Year of maturity | Nominal value | Carrying amount 2017 | | | DKK million | | | | | | | Bank loans floating rates | | | | | | | | Term loans EUR 148,400,000(1) | 4.0% | 4.4% | EUR | 1 February 2023 | 1,105.1 | 1,077.6 | | Acquisition credit facility (Multicurrency) | 3.5% | 5.3% | DKK/NOK | 1 February 2023 | 197.2 | 187.3 | | Total bank loans | 3.7% | 4.8% | DKK | 1 February 2023 | 1,302.3 | 1,264.9 | | Revolving credit facility (Multicurrency)(2) | 3.5% | 4.7% | DKK | 1 February 2023 | 139.9 | 139.9 | | Total | 3.7% | 4.8% | DKK | 1 February 2023 | 1,442.2 | 1,404.8 | | Non-current liabilities | | | | | | 1,264.9 | | Current liabilities | | | | | | 0 | (1) Interest on the EUR term loan facility has been hedged. (2) Off-balance interest bearing facility. The Group's interest-bearing loans, facilities and borrowings as listed above will be refinanced through the Refinancing, which is subject to the closing of the Offering. The fair value of bank loans is deemed to approximate the nominal value of the loans. The carrying value of the loans is based on the amortised cost method and upon initial recognition recognised at the loan proceeds received less cost to obtain the loans. The loan costs are amortised over the life of the loans based on the effective interest rate method. The repayment profile for the bank debt is conditional on the Group complying with certain financial ratios (covenants). In 2017, the Group complied with the covenants defined. 169 --- # Capital expenditure The Group's capital expenditure consists primarily of investment in servers and other IT equipment, mainly related to the part of the Group's operations centre that is not "cloud based", as well as furniture and refurbishments of the Group's office spaces. The following table sets forth the Group's capital expenditure for the three months ended 31 March 2018 and 2017 and the years ended 31 December 2017, 2016 and 2015. | | Three Months ended 31 March | | Year ended 31 December | | | | --- | --- | --- | --- | --- | --- | | | 2018 | 2017 | 2017 | 2016 | 2015 | | | DKK million | | | | | | Property, plant and equipment | (3.5) | (4.9) | (16.7) | (13.0) | (3.0) | | Intangible assets | — | — | (10.1) | — | — | | Capitalised development costs | — | — | (1.0) | (9.2) | (5.9) | | Deposits | (1.1) | — | (2.3) | (1.5) | (0.6) | | Total capital expenditure | (4.6) | (4.9) | (30.2) | (23.6) | (9.6) | Capital expenditure for the three months ended 31 March 2018 was DKK 4.6 million a decrease from DKK 4.9 million in the three months 31 March 2017, principally due to a lower level of investment in office expansions in the three months ended 31 March 2018 compared to the three months ended 31 March 2017. Capital expenditure for the year ended 31 December 2017 was DKK 30.2 million, an increase from DKK 23.6 million in the year ended 31 December 2016, principally due to an increase in expenditure on property, plant and equipment primarily driven by the expansion of the Group's Copenhagen and Polish offices and related increase in office space, and by investment in servers relating to the Group's operations services. The increase in intangible assets expenditure in 2017 related to a reclassification of the purchase price of Netcompany A/S, following the transaction on 1 February 2016 where the Significant Shareholders acquired a majority stake in the Group, which was a one-off and will not be recurring. Capitalised development cost declined in 2017 compared to 2016, as the Group no longer capitalised its development costs. Deposits increased in 2017 compared to 2016, due the increase in the Group's office space in Copenhagen. Capital expenditure for the year ended 31 December 2016 was DKK 23.6 million, an increase from DKK 9.6 million in the year ended 31 December 2015, principally due to an increase in property, plant and equipment primarily driven by the expansion of the Group's Copenhagen office and increase in office space, and by investment in servers relating to its operations services. # Financial and other long-term contractual obligations The total contractual obligations as at 31 December 2017 can be specified as follows: | | Less than 1 year | 1-5 years | 5 years and more | Total | | --- | --- | --- | --- | --- | | | DKK million | | | | | Finance lease obligations | 13.6 | 17.6 | — | 31.2 | | Other long-term liabilities(1) | — | — | — | — | | Total | 13.6 | 17.6 | — | 31.2 | (1) Other long-term liabilities include service agreements with third parties, rental of extra capacity from other data centres, and other service agreements covering primarily finance, HR, and facilities. # Off-Balance Sheet Arrangements As at 31 December 2017, the Group's off-balance sheet arrangements consisted of performance guarantees provided through its banks as part the Group's contract commitments with customers of DKK 139.9 million (2016: DKK 51.6 million, 2015: DKK 0.0 million). # Disclosures About Market Risks The Group's activities expose it to a variety of risks, including credit risk, liquidity risk, interest rate risk and foreign exchange risk. The Group's objective at all times is to limit the Group's financial risks. The Group manages the financial risks and coordinates cash management and management of interest rate and currency risks based on financial risk policies agreed with the Board of Directors. The following is an overview of these principal market risks. These risks are also described in the "Risk Factors" section of this Offering Circular. See, in particular, "Risk Factors—Risks Relating to the Group's Business and Operations". --- Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Group. The Group has adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The majority of the Group’s customers are large or established Danish enterprises, pension companies and public sector entities. Approximately 82% of the Group’s credit exposure is to Danish corporate or state entities, all of which have very strong investment-grade credit ratings, and the remaining portion of its credit exposure is to other companies with investment-grade credit ratings (including ratings allocated by local investment banks). In Norway and in the UK, the Group has fewer customers who are public sector entities compared to Denmark. The Group’s customers in Norway and the UK, in both the public and private sector segments, are of good credit quality and prior to their acquisition by the Group, the Norwegian and UK entities had very limited provisions for bad debts. The Group has established credit check procedures in relation to entering into contracts with new customers that are applicable to the entire Group. Historically, it has only realised non-material losses as a result of credit risk. See also “Risk Factors—If the Group were unable to bill for its services or collect its receivables, its results of operations and cash flows could be materially adversely affected”. In 2017, the Group did not have any bad debt losses. At 31 December 2017, the credit risk is assessed to be limited by the Audit Committee. As at 31 December 2017, the Group has made a provision of DKK 0 (2016: DKK 0, 2015: DKK 0) for potential bad debts. The Group is also exposed to counterparty credit risk when entering into financial contracts with banks. Its treasury policy requires it to only enter into financial contracts with approved banks that fulfil certain minimum credit rating requirements (P-1/A-1/F1 for short-term financial contracts and A2/A/A for long-term financial contracts). In certain circumstances, the Group may deviate from the minimum credit rating requirement if the bank is appointed as a Systematically Important Financial Institution, subject to written approval by, depending on the degree of deviation, the Group’s Chief Financial Officer or Audit Committee. As at 31 December 2017, the Group had cash and cash equivalents of DKK 194.5 million. Under the Group’s treasury policy, surplus liquidity will be invested in money market deposits, AAA-rated Danish government bonds and AAA to Aa1/AA+ DKK-denominated mortgage bonds, in each case only with counterparties approved under the treasury policy. The Group’s policy is not to invest in stocks. In addition, financial hedge instruments will only be purchased from selected counterparties. Liquidity risk The Group’s principal liquidity requirements relate to funding its working capital requirements and the purchase of tangible assets for its data centre and servers for its projects. In order to meet its liquidity requirements, the Group’s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and its existing DKK 150.0 million credit facility. The Group experiences some seasonality of cash flow throughout the year (as described above in “—Liquidity and Capital Resources—Overview”). During certain periods within a month, the Group may also experience lower cash flows, for example, after the monthly payments of its employees’ salaries and before the receipt of payment from its customers. At 31 December 2017, the Group has a unutilised credit facility (revolving credit facility) of a total of DKK 10.1 million (2016: DKK 84.8 million, 2015: DKK 40.0 million) and a unutilised acquisition facility of a total of DKK 202.5 million (2016: DKK 202.5 million, 2015: DKK 0.0 million). Interest rate risk The interest-bearing liabilities in the Group relate to the loans obtained to finance the purchases of Netcompany A/S, Mesan AS and Hunter Macdonald Ltd, which bear interest according to OTC Rate Floor Transaction agreement made. In 2017, the floating rate averaged 4.4% (2016: 5% and 2015: 0%), excluding the impact from amortisation of loan costs. Approximately 80% of the bank loans have been converted to fixed interest rate of 4.0% per annum, through the use of interest rate swaps. The fair value of the interest rate swaps outstanding as at 31 December 2017 is negative DKK 38.5 million (2016: DKK 51.0 million and 2015: 0.0 million). The Group is to a limited extent also exposed to interest rate risks relating to the cash balances, which currently bear negative interest due to the current low interest environment. See “Risk Factors—Interest rate fluctuations could materially adversely affect the Group’s business, results of operations, financial condition and cash flows”. 171 --- 172 # Foreign exchange risk The Group is to a limited extent exposed to foreign currency risks. Although the Group reports its operating results in Danish kroner, a portion of the Group’s revenue and expenses are denominated in currencies other than Danish kroner, including Euro, Norwegian kroner, British pound sterling, Polish zloty and Vietnamese dong. In late 2017, the Group acquired a subsidiary in the United Kingdom, Hunter Macdonald Ltd. Up until that time, Hunter Macdonald Ltd operated only in the United Kingdom and Vietnam and all income and expenses were incurred in GBP and dong. In late 2016, the Group acquired a subsidiary in Norway, Mesan AS. Up until that time, Mesan AS operated only in Norway and all income and expenses were incurred in NOK only. See “Business—Material Contracts—Material agreements entered into outside the ordinary course of business”. In 2017, 85.1%, 10.1% and 4.7% of the Group’s costs of service, administration costs and sales and marketing costs were denominated in the Danish kroner, Norwegian kroner and British pound sterling, respectively. As a result, the Group’s results of operations and financial position are impacted by the value of Danish kroner relative to such other currencies. With respect to the Group’s subsidiaries situated in Poland, Norway, the United Kingdom and Vietnam, while there are intra-group transactions with these subsidiaries, the Group does not view these transactions as material. The Group may repatriate dividends from its subsidiaries, which then may be subject to currency risk. See also “Risk Factors—The Group’s operating results may be materially adversely affected by fluctuations in foreign currency exchange rates or restrictions in its ability to convert funds into its operating currencies” and “—Key Factors Affecting the Group’s Results of Operations—Exchange rates”. The Group has a EUR 148.4 million term loan facility which has been fully hedged through a currency swap to hedge currency risk. In addition, the Group has a DKK 197.2 million term loan facility which has not been hedged. As a result, any currency gains or losses in respect of the DKK/NOK exchange rate will impact the Group’s financial items and thereby its EBT. The fair value of the currency swaps outstanding as at 31 December 2017 is DKK 10.5 million (2016: DKK 23.1 million and 2015: DKK 0.0 million). # Key Accounting Policies When applying the Group’s accounting policies, Executive Management has to make judgements and estimates of and assumptions about the carrying amount of assets and liabilities that cannot be directly derived from other sources. Such estimates and assumptions are based on historical experience and other relevant factors. The actual results may deviate from such estimates. Estimates made and the underlying assumptions are reassessed on a regular basis. Any changes in the accounting estimates made are recognised in the accounting period in which the change was made as well as in future accounting periods if the change affects the period in which it was made as well as subsequent accounting periods. In the financial statements for 2017, it is particularly important to note the following assumptions and uncertainties: # Special items Such costs and income comprises expenses for restructuring, fundamental structural changes in the business, merger and acquisition costs and costs relating to the Offering. They are therefore presented separately to provide a more comparable basis for assessing the underlying performance. Key assumptions involve judgment from Executive Management in identifying and separating special income or expense items from other items in the income statement. These items are carefully considered in order to ensure correct presentation. # Contract work in progress Contract work in progress for fixed priced contracts is measured at the selling price of work completed at 31 December of the financial reporting year, and the selling price is calculated on the basis of contracted income and the determined stage of completion. Stage of completion is determined making estimates of future hours and other project costs. The Group reviews its contract portfolio on a regular basis. If circumstances arise that change --- the original estimates of the selling price of the contracts or costs, revisions to estimates, including to revenue visibility, are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in the income statement in the period in which the circumstances giving rise to the revisions become known by the Group. ## Provisions for onerous contracts and warranty obligations As part of its regular review of the contract portfolio, the Group may identify contracts where the completion of a contract most likely will result in a negative contribution. In these circumstances, the Group will record a provision to cover the unavoidable loss. Provision for warranty obligations are based on past history and provisions for specific customer cases. The estimates of the provision may be subject to significant management judgement and uncertainty depending on project complexity and on whether there are any disputes with customers in relation to project performance, claims and counter claims, contract interpretation and alike. ## Business combinations Acquisitions of businesses are accounted for using the acquisition method. The cost of an acquisition is measured as the consideration transferred for assets acquired and liabilities assumed in the business combination measured at fair value on acquisition date. ## Year ended 31 December 2017 On 25 October 2017 the Group acquired the entire share capital of Hunter Macdonald Ltd at a price of DKK 345,898,000 of which DKK 120,260,000 was paid in cash and DKK 225,638,000 was settled by the issue of share capital in NC Topco A/S. Hunter Macdonald Ltd, which is located in the United Kingdom, has a subsidiary in Vietnam, which supports the main office. Accounting for a business combination requires Executive Management to estimate the fair value of the assets, such as goodwill, customer relationships and order back-log. Key assumptions for the methods applied in determining the fair value are based on the present value of future cash flows, churn rates or the expected cash flows related to the specific asset. Estimates and methodologies used, can have a material impact on the respective values and ultimately the amount of the fair values recognised. IFRS 3 “Business Combinations” requires that the Group recognise, separately from goodwill, the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The recognised goodwill amount is allocated to the activities of the Group generating separate payments (cash generating units). Determination of cash generating units complies with the management structure and management accounting and reporting of the Group. Goodwill is not amortised, but tested at least once a year for impairment. The Group has defined a process consisting of a review of the balance sheet of Hunter Macdonald Ltd at the acquisition date 25 October 2017, for the purposes of identifying non-recognised assets and liabilities, and for identifying any fair value adjustments to the assets and liabilities already recognised in the balance sheet of Hunter Macdonald Ltd at the acquisition date. 173 --- As part of this process the following unrecognised assets and liabilities were identified in connection with the acquisition of Hunter Macdonald Ltd: Order back-log, DKK 31,481,000 Fair value of order back-log has been determined on the basis of Net Operating Profit Less Adjusted Taxes ("NOPLAT") from the order back-log at the acquisition date, adjusted for amounts already included in the recognition of fair value of other identified intangible assets, and discounted with the internal required rate of return of 13.2% per annum. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. Customer relationships, DKK 75,855,000 Fair value of customer relationships has been determined on the basis of forecasted NOPLAT from the acquisition date in October 2017 to 2024 adjusted for expected churn-rate and discounted with the internal required rate of return of 13.2% per annum. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. Deferred tax liability, DKK 20,394,000 Deferred tax on the remeasurement of order back-log and customer relationships reflects and is equal to the total increase in the fair value of the order back-log and customer relationships as a result of increasing the fair values with the tax amortisation benefit factor. Assets and liabilities recognised as a result of acquisitions in 2017 and 2016 are as follows: | Current assets | 2017 | | | --- | --- | --- | | | Hunter Macdonald Ltd | | | | Book value on acquisition date | Opening balance sheet | | Cash and cash equivalents | 26,287 | 26,287 | | Trade and other receivables(1) | 51,743 | 51,743 | | Work in progress | 3,279 | 3,279 | | Right of use assets | 984 | 984 | | Plant and equipment | 626 | 626 | | Goodwill | — | 214,700 | | Customer Relationships | — | 75,855 | | Order back-log | — | 31,481 | | Deferred tax of the transaction | — | (20,394) | | Trade and other payables | (38,663) | (38,663) | | Consideration transferred | | 345,898 | (1) Trade and other receivables has a fair value of DKK 51,743,000 where trade receivables amount to DKK 37,701,000 and the gross contractual amounts to DKK 169,625,000. It is Executive Management's estimate that all contracts will be recovered in full. ## Goodwill arising on acquisition Based on the measurement of identifiable assets and liabilities at their fair values, the difference between the cash consideration and the fair value of the identified net assets equals DKK 214,700,000, which amount represents the goodwill from the acquisition of Hunter Macdonald Ltd. In addition, the consideration paid for the business combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of Hunter Macdonald Ltd. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. Goodwill is also not deductible for tax purposes. For all other identified assets and liabilities Executive Management determined that the book values in the balance sheet of Hunter Macdonald Ltd at 25 October 2017 were equal to their fair values. ## Revenue and profit contribution The acquisition of Hunter Macdonald Ltd contributed revenues of DKK 61,855,000 and net profit of DKK 12,386,000 to the Group for the period from 25 October to 31 December 2017. Had the acquisition occurred on 1 January 2017, consolidated pro-forma revenue and profit for the year ended 31 December 2017 would have been increased by DKK 286,276,000 and DKK 20,962,000, respectively. 174 --- These amounts have been calculated using the subsidiary's results and adjusting them for: - differences in the accounting policies between the Group and the subsidiary, and - the additional depreciation that would have been charged assuming the fair value adjustments to identifiable intangible assets had applied from 1 January 2017 together with the consequential tax effects. ## Year ended 31 December 2016 On 1 February 2016, the Group acquired the entire share capital of Netcompany A/S and its subsidiaries at a price of DKK 2,320,445,000 in cash. Furthermore, on 22 November 2016, the Group acquired the entire share capital of Mesan AS which is located in Norway. The consideration amounted to DKK 195,611,000 in cash. After the acquisition Mesan AS has changed its name to Netcompany Norway AS. Assets acquired and liabilities recognised at the dates of acquisition are summarised above. The acquisitions have strengthened the Group's position in the European market and added a strong partner, in Mesan AS, to the Group. Goodwill represents the value of the current workforce and potential synergies expected from integration within the Group. | Current assets | 2016 | | 2016 | | | --- | --- | --- | --- | --- | | | Netcompany A/S | | Netcompany Norway AS | | | | Book value on acquisition date | Opening balance sheet | Book value on acquisition date | Opening balance sheet | | | | DKK thousand | | | | Cash and cash equivalents | 44,428 | 44,428 | 27,372 | 27,372 | | Software | 4,514 | 4,514 | — | — | | Trade and other receivables | 182,860 | 182,860 | 26,743 | 26,743 | | Work in progress | 78,664 | 78,664 | — | — | | Deferred tax asset | 915 | 915 | 95 | 95 | | Plant and equipment | 12,309 | 12,309 | 522 | 522 | | Goodwill(1) | — | 1,765,207 | — | 118,676 | | Customer Relationships | — | 205,461 | — | 62,960 | | Order back-log | — | 57,454 | — | 6,976 | | Technology | — | 52,909 | — | — | | Brand | — | 167,776 | — | — | | Corporate tax | (20,794) | (20,794) | (4,080) | (4,080) | | Deferred tax of the transaction | — | (106,392) | — | (17,484) | | Prepayments from customers | (25,215) | (25,215) | — | — | | Trade and other payables | (99,652) | (99,652) | (26,170) | (26,170) | | Consideration transferred | | 2,320,445 | | 195,611 | (1) In 2017, the Group has made an additional payment of DKK 10,106,000 which has been added to goodwill for Netcompany A/S. ## Impairment assessment of goodwill and other intangible assets relating to acquisitions The Group has recognised goodwill and certain other intangible assets from the acquisitions of Netcompany A/S (1 February 2016), Netcompany Norway AS (22 November 2016) and Hunter Macdonald Ltd (25 October 2017). Since the acquisition of Hunter Macdonald Ltd took place in the last quarter of 2017, Executive Management has determined that the carrying value of goodwill and the other identified intangible assets is at least equal to their fair values. Management has therefore concluded that goodwill and related intangible assets are not impaired, and no detailed impairment test has been deemed necessary at 31 December 2017 for Hunter Macdonald Ltd. In 2018 the goodwill and the other identified intangibles assets will be tested at least once a year. ## Share based payment A number of key employees of the Group hold shares directly or indirectly in NC TopCo A/S. The key employees participate as shareholders on the same terms and at the same price as the other shareholders of NC --- TopCo A/S. On this basis Executive Management has concluded that NC TopCo A/S is not subject to the requirements of IFRS 2 “Share-based Payment” and since the key employees have acquired shares at the same price as other shareholders, there are no deemed service cost to be recognized relating to the key employees holding shares in NC TopCo A/S. ## Effect of changes in accounting policies In 2017 certain new standards or amendments and revised accounting standards and interpretations issued by IASB have been adopted early by the Group. The following standards have been fully implemented in 2017 and comparative figures for 2016 and 2015 have been adjusted accordingly. ## Application of IFRS 9 “Financial Instruments” The Group has decided to adopt early IFRS 9 and has applied its requirements. The date of initial application (i.e. the date on which the Group has assessed its existing financial assets and financial liabilities in terms of the requirements of IFRS 9) is 1 January 2015. The implementation of IFRS 9 has not affected the current classification and measurement of the Group’s financial instruments. Financial assets and liabilities classified as held-to-maturity and loans and receivables under IAS 39 that were measured at amortised cost continue to be measured at amortised cost under IFRS 9 as they are held within a business model to collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal amount outstanding. The Group has entered into a currency swap and an interest swap which both are measured at fair value. For the currency swap, the fair value of the difference between EUR and DKK has been reflected in financial income, whereas the fair value relating to the time value has been reflected in other comprehensive income and is shown as “Deferred cost of hedging reserve” in equity. The interest swap has been valued at fair value with fair value changes reflected in other comprehensive income and as “Cash flow hedging reserve” in equity. The application of IFRS 9 has not changed the measurement or classification of swaps. The effect of the change from the ‘incurred loss’ model in IAS 39 to the ‘expected credit loss’ model in IFRS 9 is immaterial due to the low credit risk in the Group. Therefore, the implementation of IFRS 9 has not had material impact on the financial position or performance of Group. ## Application of IFRS 15 “Revenue from Contracts with Customers” IASB has issued IFRS 15 “Revenue from Contracts with Customers”. This standard replaces IAS 11 and IAS 18 and sets out the principles for recognition, measurement, presentation and disclosure of revenue from contracts with customers. The Group has decided to adopt early IFRS 15 from 1 January 2017 applying the “full retrospective” approach, which means restating opening retained earnings as if IFRS 15 had always been applied and preparing comparative figures according to IFRS 15. The transition to IFRS 15 has not had any significant impact on revenue, cash-flows or equity for 2017, 2016 or 2015. The Group has recognised revenue in accordance with the same principles as set out by IFRS 15. IFRS 15 introduces a single model to deal with revenue from contracts with customers. Its core principle is that an entity should recognise revenue based on the transfer of promised goods or services to customers with an amount that reflects the consideration to which the entity expects to be entitled for those goods or services provided to customers. Only in relation to subscriptions, which is considered to be an insignificant type of revenue for the Group, has the implementation of IFRS 15 changed the recognition of income. Subscriptions were previously recognised on the date of invoicing and they are now recognised over the subscription period. The effect of this is a total revenue of DKK 1.7 million being recognised in 2018 instead of 2017. There was no effect in 2016 or 2015, and therefore no recognition of revenue in 2017 related to 2016 or in 2016 related to 2015. ## Application of IFRS 16 “Leases” This standard replaces IAS 17 and sets out the principles for recognition, measurement, presentation and disclosure of leases. IFRS 16 uses a single lessee accounting model and requires recognition of assets and liabilities for almost all leases which results in an increase of fixed assets and total financial debt. 176 --- The Group decided to adopt early IFRS 16 from 1 January 2017 applying the “full retrospective” approach, which means restating opening retained earnings as if IFRS 16 had always been applied and preparing comparative figures according to IFRS 16. The impact on the 2016 comparative figures is a decrease in administration cost of DKK 11.6 million, an increase in financial expenses of DKK 0.5 million and an increase in depreciation cost of DKK 11.1 million. In the balance sheet as at 31 December 2016, right of use assets have been recognised at DKK 25.2 million and lease liabilities at DKK 25.3 million. The impact on the 2015 comparative figures is a decrease in administration cost of DKK 8.6 million and an increase in depreciation cost of DKK 8.1 million. In the balance sheet as at 31 December 2015, right of use assets have been recognised at DKK 11.9 million and lease liabilities at DKK 11.9 million. The lease liability is determined as the present value of the remaining payments using the borrowing rate of the entities. The right of use assets are recognised as an amount equal to the initial amount of the lease liability less depreciation. 177 --- FORECAST OF CONSOLIDATED FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2018 AND PROJECTIONS OF CONSOLIDATED MEDIUM TERM FINANCIAL TARGETS FOR THE THREE-YEAR PERIOD ENDING 31 DECEMBER 2021 Statement by the Board of Directors and Executive Management The Company has prepared and is presenting herein (i) its forecast of consolidated financial information for the financial year ending 31 December 2018, and (ii) its projections of consolidated medium term financial targets for the three-year period ending 31 December 2021. The principal assumptions upon which the forecast for 2018 and the projections of the consolidated medium term financial targets the three-year period ending 31 December 2021 have been based are stated under “Methodology and Assumptions”. The accounting policies applied are in accordance with the accounting policies as set out in the accounting policies stated in the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49. The forecast of consolidated financial information and the projections of consolidated medium term financial targets included herein is prepared solely for the purpose of this Offering Circular. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, are based on a number of factors, including numerous estimates and assumptions. The principal assumptions upon which the Company has based the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 are described under “Methodology and Assumptions”. A number of those assumptions are outside of the Company’s control or influence. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, represent the best estimates of the Board of Directors and Management at the date of publication of this Offering Circular. Actual results are likely to be different from what is expressed by the forecast of consolidated financial information and from what may be derived from the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 and the variations may be material. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 in this section should be read in conjunction with “Risk Factors” and “Special Notice Regarding Forward-Looking Statements” included elsewhere in this Offering Circular. Copenhagen, 23 May 2018 Netcompany Group A/S Board of Directors Pekka Ala-Pietilä Chairman Thomas Broe-Andersen Deputy Chairman Pernille Fabricius Board Member Juha Christensen Board Member Bo Rygaard Board Member Carsten Gomard Board Member Executive Management André Rogaczewski CEO Claus Jørgensen COO Thomas Johansen CFO 178 --- 179 # Report from Netcompany Group A/S' Independent Auditors regarding the Forecast of Consolidated Financial Information for the Financial Year ending 31 December 2018 and Projections of Consolidated Medium Term Financial Targets for the Three-Year period ending 31 December 2021 ## To shareholders and potential investors We have been engaged to issue a report as to whether the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 of Netcompany Group A/S has been properly compiled on the basis stated and whether the basis of accounting used for the consolidated 2018 forecast and projections of medium term financial targets are consistent with the accounting policies of Netcompany Group A/S. The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 are stated on pages 181-185 of this Offering Circular. The basis upon which the consolidated 2018 forecast and the projections for the medium term financial targets have been prepared are stated in the section "Methodology and Assumptions". We will express reasonable assurance in our conclusion. The expression "the basis of accounting used for the consolidated forecast and projections of financial information is consistent with the accounting policies of Netcompany Group A/S" means that the consolidated forecast and projections of financial information has been prepared according to the accounting policies stated in the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49. The Company's actual result of operations for the periods presented may be different from the forecast of consolidated financial information and the projections of consolidated medium term financial targets for such periods, since anticipated events may not occur, and the variations may be material. The forecast of consolidated financial information and the projections of consolidated medium term financial targets have been prepared solely for the purpose of this Offering Circular, which has been prepared in accordance with Commission Regulation (EC) No 809/2004 as subsequently amended (the "Prospectus Regulation") and may therefore not be appropriate for another purpose. Our report is issued in accordance with the Prospectus Regulation and has been prepared in accordance with generally accepted Danish practice for reports under the Prospectus Regulation and only in connection with the contemplated admission for trading and official listing on Nasdaq Copenhagen of Shares in Netcompany Group A/S and the public offering of certain of these Shares. ## Management's Responsibility The Company's management is responsible for the proper compilation of the forecast of consolidated financial information and the projections of consolidated medium term financial targets on the basis stated and for the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets being consistent with the accounting policies of Netcompany Group A/S. Furthermore, the Company's management is responsible for selecting the assumptions underlying the forecast of consolidated financial information and the projections of consolidated medium term financial targets. ## Auditors' Responsibility Our responsibility, in accordance with the Prospectus Regulation, is to express a conclusion as to whether the forecast of consolidated financial information and the projections of consolidated medium term financial targets have been properly compiled on the basis stated and whether the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets are consistent with the accounting policies of Netcompany Group A/S. We have performed our work in accordance with ISAE 3000 (revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information and additional requirements under Danish audit regulation. --- Deloitte Statsautoriseret Revisionspartnerselskab is subject to the International Standard on Quality Control, ISQC 1, and thus applies a comprehensive quality control system, including documented policies and procedures concerning compliance with ethical requirements, professional standards and current statutory requirements and other regulation. We have complied with the independence requirements and other ethical requirements included in FSR—Danish Auditors’ guidelines for auditors’ ethical behaviour (Code of Ethics for Auditors) based on the basic principles of integrity, objectivity, professional competence as well as due diligence, confidentiality and professional behaviour. As part of our work, we have checked whether the forecast of consolidated financial information and the projections of consolidated medium term financial targets have been properly compiled on the basis of the assumptions stated and according to the accounting policies set out in the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49, including checking the numerical consistency of the forecast of consolidated financial information and the projections of consolidated medium term financial targets. Our work did not comprise an assessment of whether the assumptions applied are documented, well-founded and complete or whether the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 can be realised, and therefore we express no conclusion thereon. ## Conclusion Our conclusion is based on the understanding of the expression "the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets are consistent with the accounting policies of Netcompany Group A/S" as defined in the introduction to this report. In our opinion, the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, respectively, have been properly compiled on the basis stated and the basis of accounting used for the forecast of consolidated financial information and the projections of consolidated medium term financial targets are consistent with the accounting policies of Netcompany Group A/S. Copenhagen, 23 May 2018 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No 33 96 35 56 Kim Takata Mücke State-Authorised Public Accountant mne10944 Brian Schmit Jensen State-Authorised Public Accountant mne40050 --- 181 # Introduction The Company has prepared the forecast of consolidated financial information for the year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 for use in this Offering Circular in accordance with applicable laws and regulations. Such information is the responsibility of the Company’s Board of Directors and Executive Management. The forecast of consolidated financial information and the projections of consolidated medium term financial targets were not prepared with a view toward compliance with published guidelines of the U.S. Securities and Exchange Commission and the American Institute of Certified Public Accountants (the “AICPA”), for preparation and presentation of forecast of financial information and the projections of consolidated medium term financial targets. Accordingly, this information does not include disclosure of all information required by the AICPA guidelines on prospective financial information. The forecast of consolidated financial information and the projections of consolidated medium term financial targets are necessarily based upon a number of assumptions and estimates that, while presented with numerical specificity and considered reasonable by the Company, are inherently subject to significant business, operational, economic and competitive uncertainties and contingencies, and upon assumptions with respect to future business decisions that are subject to change. The Group’s expectations as to future developments may deviate substantially from actual developments, and the Group’s actual results of operations are likely to deviate, and may deviate materially, from the forecasts and projections provided. Accordingly, potential investors should treat this information with caution and not place undue reliance on the expectations set forth below. # Methodology and Assumptions The forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, have been prepared on the basis of the accounting policies set out in the note 1 to the Combined Financial Statements for NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as included in the F-pages F-20-F-49, which are in accordance with the recognition and measurement regulation of IFRS as adopted by the European Union with those applied in the Combined Financial Statements. The forecast of consolidated financial information for the year financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021 have been prepared for the purpose of this Offering Circular in accordance with the Group’s ordinary budgeting and forecasting procedures and on a basis comparable to the historical financial information included elsewhere in this Offering Circular. However, the forecast of consolidated financial information and the projections of consolidated medium term financial targets are based on a large number of estimates made by the Group based on assumptions about future events, which are subject to numerous and significant uncertainties, for example, caused by business and/or wider economic risks and uncertainties, which could cause the Company’s actual results to differ materially from the forecast of financial information and the projections of consolidated medium term financial targets presented herein. Certain of the assumptions, uncertainties and contingencies relating to the forecast of consolidated financial information and the projections of consolidated medium term financial targets are wholly or partially within the Group’s control, while others are outside or substantially outside of its control. The Group’s actual results of operations could deviate materially from its forecasts as a result of other factors, including, but not limited to, those described under “Special Notice Regarding Forward-Looking Statements” and “Risk Factors”. For more information regarding principal factors that the Group expects could have a substantial effect on its results of operations, see “Operating and Financial Review—Key Factors Affecting the Group’s Results of Operations”. For the purpose of preparing the forecast of consolidated financial information for the financial year ending 31 December 2018 and the projections of consolidated medium term financial targets for the three-year period ending 31 December 2021, the Group has applied the principal assumptions set forth below. --- 182 # Assumptions ## Reported Revenue Growth The Group’s target for reported revenue growth measured in DKK is based on the following assumptions: - The Group assumes that the underlying market in each of the markets where the Group is already established (Denmark, Norway and the UK) continues to grow in 2018 at the same respective rates as in 2017 and from 2019 to 2021 as forecast in “Industry”, and that the Group will continue to win market share in such countries. The Group’s ability to win market share by entering into new contracts is partially within the Group’s control but it is also based on assumptions that are outside or substantially outside the Group’s control, including assumptions relating to, among other things, stable macroeconomic conditions, no changes in customers’ IT spending or procurement policies, no change in industry or market trends for the Danish, Norwegian and UK IT services markets and the actions of the Group’s competitors, any change of which could affect demand for the Group’s services. The Group also assumes no loss of major customers and no loss of substantial work from existing customers, as consistent with recent years. - The Group assumes consistent growth in headcount throughout the year of between 20% and 25% per year, as consistent with recent years. The timing of when headcount is engaged has a large impact on revenue growth. For example, headcount growth in the fourth quarter compared to the first quarter in a year will have a lower impact on the current year but a relatively higher impact on the following year notwithstanding that average headcount during the year might be the same. Consistent growth in headcount is partially within the Group’s control but it is also based on assumptions that are outside or substantially outside the Group’s control, including assumptions relating to, among other things, the size of the talent pool available for recruitment and the sustained level of interest in graduates joining the Group, any change of which could affect the Group’s consistent growth in headcount. - The Group assumes that utilisation rates will decrease marginally in 2018 compared to 2017 as a result of additional time expected to be spent on business development efforts and the Group assumes that the average charge per hour billed will decrease marginally in 2018 compared to 2017. The Group also assumes a decrease in revenue per employee as a result of the full-year consolidation of Hunter Macdonald Ltd in 2018, as compared to only two months in 2017, with Hunter Macdonald Ltd historically having a lower revenue per employee compared to the Group’s operations in Denmark and Norway. For the period 2019 to 2021, the Group assumes that: (1) utilisation rates in Denmark will be in line with historical levels (which are slightly above the assumed utilisation rates for 2018 but below the utilisation rates realised in 2017, which were higher than historical levels), (2) there will be a modest increase in utilisation rates in Norway (which are expected to be in line with the assumed utilisation rates in Denmark for the period from 2019 to 2021) and (3) utilisation rates in the United Kingdom will gradually increase. No assumptions have been made regarding the amount of overtime worked by consultants and as a result the target for reported revenue growth does not include overtime. Each of the foregoing assumptions relating to the period 2019 to 2021 are based on assumptions partially within the Group’s control. - For 2018, the Group assumes annual revenue growth of between 20% and 25% in both Denmark and Norway, based on revenue visibility (see “Operating and Financial Review—non-IFRS financial measures and other key performance indicators—Revenue visibility”). For 2018, the Group assumes revenue growth of between 10% and 15% in the UK (from the full-year reported revenue for 2017 of DKK 286.3 million as disclosed in the annual report for NC TopCo A/S) (representing a slower pace than has been the case historically for the Group’s acquired business in the UK (Hunter Macdonald Ltd) as a consequence of the integration of the business, including implementation of the Group’s business model). For 2019 to 2021, the Group assumes an average annual revenue growth of between 20% and 25%. The Group’s assumptions regarding annual revenue growth are partially within its control but are also outside or substantially outside the Group’s control, including assumptions relating to, among other things, stable macroeconomic conditions, there being no changes in customers’ IT spending or procurement policies or as to the rates of prolongation or volumes under the Group’s time and material engagements, there being no adverse change in industry or market trends for the Danish, Norwegian and UK IT services markets or the actions of the Group’s competitors, any change of which could affect the Group’s ability to achieve its revenue growth targets. - The Group assumes no revenue growth from potential acquisitions. --- 183 # Organic Revenue Growth In addition to the assumptions above for reported revenue growth, in accordance with the Group’s applied definition for calculating organic revenue growth, the Group’s target for organic revenue growth for 2018 excludes the impact of the acquisition of Hunter Macdonald Ltd made in 2017, and excludes the currency impact from currency exchange fluctuations that are included in the reported revenue growth (see additional assumptions below). For the period 2019 to 2021 there will be no difference between organic revenue growth and revenue growth as the medium term financial targets do not include any acquisitions, and hence all revenue growth will by definition be organic for this period. # Earnings Before Tax (EBT) and EBT Margins The Group’s targets for EBT and EBT margins is based on the following assumptions: - The Group assumes that maintenance revenue will increase at a higher ratio relative to development revenue which will have a positive impact on EBT margins. In addition, the Group assumes a positive impact on EBT margins from the ongoing integration of the Norwegian business. Countering these positive margin developments is the consolidation of Hunter Macdonald Ltd for the full year 2018 compared to only two months in 2017. The Group assumes that the UK business, on a stand-alone basis, will for 2018 yield margins in line with historical performance and that the implementation of the Group’s business model will gradually, over the medium term until 2021, increase margins in the UK. However, in the short term, there will be additional costs incurred in the UK to align the business with the rest of the Group, for example establishing an office in London to attract young IT professionals to its operations, as part of the integration and transformation plans for Hunter Macdonald Ltd. - The Group assumes that FTE-related costs incurred as sales and marketing costs and administrative costs respectively, will increase in line with the assumed increase in total customer-facing FTEs. In 2017, total sales and marketing costs and administrative costs (including non FTE-based costs) increased at a higher ratio relative to the increase in total customer-facing FTEs as a result of the completion of the ERP systems implementation in the first quarter of 2018. The Group’s assumptions relating to FTE-related costs are partially within its control but are also outside or substantially outside its control, including assumptions relating to its ability to increase its total customer-facing FTEs, any change of which could affect the Group’s assumed future FTE-related costs (see headcount growth assumption above for further details). - The Group assumes that it will continue to deliver projects on time, on budget and within scope, consistent with recent years, an assumption that is partially within the its control. - For 2018, the Group assumes special items representing costs related to M&A activities, costs relating to the Offering and strategic considerations of the future structure of the Group to be between DKK 30 million and DKK 35 million. For the period from 2019 to 2021, no special items are assumed as the medium term financial targets do not include any acquisitions. - For 2018, the Group expects amortisation of intangible assets related to previous acquisitions (based on the respective purchase price allocations made) to be in line with reported levels for the first quarter of 2018 annualised for the full year, as the amortisation recorded in the first quarter of 2018 included full amortisation related to all acquisitions. For the period from 2019 to 2021, amortisation is expected to gradually decline in line with the amortisation periods applied for the various types of intangible assets. Each of these assumptions are within the Group’s control. - The Group assumes no additional acquisitions. To the extent there are additional acquisitions in the period from 2019 to 2021, there would likely be an impact on EBIT margin, consistent with the historical impact from the acquisitions of both the Norwegian and the UK businesses, encompassing both costs related to the transactions as such and a dilution of reported EBIT margin until the Group’s business model is fully implemented in any such acquired entities. - The Group assumes that the Refinancing conducted in connection with the IPO Reorganisation will result in a significantly reduced interest rate payable by the Group and the Group expects to repay debt on an ongoing basis based on the expected cash flow generated throughout the years, an assumption that is within the Group’s control. As the medium term financial targets do not include any acquisitions and as the Group expects to continue to generate cash flow in line with historic performance it is --- anticipated that interest costs will be reduced in nominal terms as a proportion of the excess cash flow generated is expected to be used to deleverage the Group. It is expected that debt (assuming no acquisitions) will be reduced by at least DKK 200 million annually. The interest rate applied in the period from 2019 to 2021 is in line with the interest rate under the New Facilities Agreement. - In connection with the Refinancing, the Group expects to unwind its interest rate and currency swaps that were entered into to hedge the interest and currency risks associated with the Group’s financing facilities that were in place prior to the Offering, an assumption that is within the Group’s control. A significant amount of the fair value of these two financing instruments have been accounted for as hedges in the Group’s other comprehensive income and the fair value of the interest rate and currency swaps as at 31 March 2018 is negative DKK 23 million. The Group expects that the unwinding of the interest rate and currency swaps will result in the part of negative fair value previously recognized in other comprehensive income being recycled and added to its financial expenses in the amount of DKK 23 million during the second quarter of 2018. - The Group has capitalised loan costs on its existing financing facilities in place prior to the Refinancing that, in accordance with its accounting principles and as prescribed by IFRS, are being amortised over the duration of the facilities. In connection with the Refinancing, the Group expects that these existing loans will be repaid in full and all capitalised loan costs will be expensed as financial expenses. As at 31 March 2018, capitalised loan costs equalled DKK 31 million and the Group expects that this amount will be expensed as financial expenses during the second quarter of 2018. Each of these assumptions are within the Group’s control. - The Group’s assumes that capital expenditure before addition of “right of use assets” as a percentage of reported revenue to be around 2% in 2018 and around 2% per year from 2019 to 2021, which is partly within the Group’s control. Such capital expenditure assumptions reflects its expected reinvestment requirements and investments related to new customers. Capital expenditure related to “right of use assets” is not included in the assumptions for capital expenditures as this capital expenditure is related to leasehold contracts for office rent and will occur at irregular times. In addition, any leasehold agreements entered into will impact “right of use assets” and have a significant impact on the balance sheet as, in accordance with IFRS, such leaseholds will be fully capitalised and then subsequently depreciated over the period of the leasehold. Capitalisation of “right of use assets” will include a similar increase in leasing obligations and, accordingly, there will be no cash flow impact at the time of capitalising “right of use assets”. - The Group expects depreciation of “right of use assets”—included in administrative costs—to increase for the full year 2018 as the Group expects to enter into a new leasehold agreement in London as part of the integration and transformation plans for Hunter Macdonald Ltd. ## Adjusted EBITA Margins (for the financial year ending 31 December 2018) - In addition to the assumptions above for EBT, the Group’s target for adjusted EBITA margin for 2018 excludes costs related to M&A activities, costs relating to the Offering and strategic considerations of the future structure of the Group (estimated to be between DKK 30 million and DKK 35 million in 2018), which will be reported as special items. ## Additional Assumptions In addition, the Group has assumed the following which are entirely outside the Group’s control: - based on the currency exchange rates used for 2017 related to NOK, and for the last two months of 2017 related to GBP and Vietnamese dong, currency exchange fluctuations are estimated to positively impact revenue and margins in reported currency by around 0.5% to 1.0% in 2018. For 2019 to 2021, reported revenue and earnings are forecast at constant exchange rates in line with those used for the 2018 forecast. The currency exchange rates the Group uses in the future are subject to change as a result of changes in the currency market. In general, average salary cost per FTE is expected to be stable as a consequence of applying a strict focus on maintaining the current pyramid structure. A general inflation rate of 2% has been assumed for all revenues and costs throughout the period from 2019 to 2021; and - there will be no changes in existing political, legal, fiscal, market or economic conditions or in applicable legislation, regulations or rules, which, individually or in the aggregate, have a material adverse effect on the Group’s results of operations. 184 --- Except as set forth above, the above assumptions are outside or substantially outside of the Group’s control. ## Non-IFRS Financial Measures Organic revenue growth, EBITA margin and adjusted EBITA margin are not measures of financial performance under IFRS and are defined and reconciled in the section “Presentation of Financial and Certain Other Information”. The Group uses these measures to monitor the underlying performance of its business and operations. Not all companies may calculate organic revenue growth or adjusted EBITA margin in the same manner or on a consistent basis, and, as a result, the Group’s presentation may not be comparable to measures used by other companies under the same or similar names. Accordingly, these non-IFRS measures should not be used alone or as a substitute of IFRS financial measures. ## Forecast of Consolidated Financial Information for the Financial Year Ending 31 December 2018 - The Group targets reported revenue at the top end of the range between DKK 1,940 million and DKK 2,011 million (equal to revenue growth at the top end of the range of between 37% and 42%). - The Group targets organic revenue to grow at the top end of the range of between 20% and 25%. - The Group targets earnings before tax of between DKK 213 million and DKK 282 million (equal to an earnings before tax margin of between 11% and 14%). - The Group targets an adjusted EBITA margin of between 24.5% and 27.5%. The Group estimates that special items will be between DKK 30 million and DKK 35 million. ## Projections of Consolidated Medium Term Financial Targets for the Three-Year Period Ending 31 December 2021 - The Group targets annual reported revenue growth to be between 20% and 25%. - The Group targets annual organic revenue growth to be between 20% and 25%. - The Group targets earnings before tax margin to be in the low to mid 20s% range in 2021 at the latest. - The Group targets EBITA margin to be in the mid to high 20s% range in 2021 at the latest. See “Special Notice Regarding Forward-Looking Statements”. 185 --- BOARD OF DIRECTORS, EXECUTIVE MANAGEMENT AND KEY EMPLOYEES ## Overview The Company has a two-tier governance structure consisting of the Board of Directors and the Executive Management. The two bodies are separate and have no overlapping members. The Executive Management is supported by one key employee (the “Key Employee”). ## Board of Directors The Board of Directors is responsible for the overall and strategic management and proper organisation of the Company’s business and operations and it supervises the Company’s activities, management and organisation. The Board of Directors appoints and dismisses the members of the Executive Management, who are responsible for the day-to-day management of the Company. In accordance with article 10.1 of the Articles of Association, the general meeting of the Company shall elect not less than three and not more than seven members to the Board of Directors. The Board of Directors elects a chairman (the “Chairman”) and a deputy chairman (the “Deputy Chairman”) of the Board of Directors among its members. If the Chairman resigns during a term of election, the Deputy Chairman shall take up the position as Chairman until a new Chairman is elected among the members of the Board of Directors. See article 10.3 of the Articles of Association. The members of the Board of Directors elected by the general meeting are elected for a term of one year. Members of the Board of Directors may be re-elected. The existing Board of Directors is currently comprised of six members elected by the general meeting comprising the Chairman, Deputy Chairman and four board members. The Company believes that the members of the Board of Directors possess the professional skills and experience required to serve as board members of the Company and to supervise and manage a company with shares admitted to trading and official listing on Nasdaq Copenhagen. The following table presents an overview of the Board of Directors: | Name | Position | Independent(1) | Year of first appointment | Expiration of term | | --- | --- | --- | --- | --- | | Board of Directors | | | | | | Pekka Ala-Pietilä | Chairman | Independent | 2018(3) | 2019 | | Thomas Broe-Andersen | Deputy Chairman | Not independent | 2018(2) | 2019 | | Pernille Fabricius | Board member | Independent | 2018(3) | 2019 | | Juha Christensen | Board member | Independent | 2018(4) | 2019 | | Bo Rygaard | Board member | Not independent | 2018(4) | 2019 | | Carsten Gomard | Board member | Not independent | 2018(5) | 2019 | (1) The Company has based its assessment of independence on the basis of the criteria set out in the Corporate Governance Recommendations (as defined below). (2) Thomas Broe-Andersen initially joined the Group as board member of NC TopCo A/S in January 2016. (3) Pekka Ala-Pietilä and Pernille Fabricius initially joined the Group as board members of NC TopCo A/S in October 2017. (4) Juha Christensen and Bo Rygaard initially joined the Group as board members of NC TopCo A/S in November 2016. (5) Carsten Gomard co-founded the Group together with the CEO and COO. The Company currently has three board members, Thomas Broe-Andersen, Bo Rygaard and Carsten Gomard, who are not considered independent and three board members, Pekka Ala-Pietilä, Pernille Fabricius and Juha Christensen, who have been assessed by the Company to be independent. The business address of the members of the Board of Directors is: Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. ## Biographies Other than as presented below, none of the members of the Board of Directors have been a member of the administrative, management or supervisory bodies of a company or a partnership or been a partner in a partnership outside the Group within the past five years. 186 --- Biographies—Board of Directors Pekka Ala-Pietilä (full name: Pekka Juhani Ala-Pietilä, born 1957, Finnish nationality) has been chairman of the board of directors of NC TopCo A/S since October 2017 and Chairman of the Board of Directors of the Company since May 2018. Pekka Ala-Pietilä is currently chairman of the Artificial Intelligence Steering Group for the Finnish Ministry of Economic Affairs and Employment, deputy chairman of the Steering Group for Public Sector Digitalisation for the Finnish Ministry of Finance. In addition, Pekka Ala-Pietilä is currently chairman of the board of directors of Huhtamäki Oyj (listed on Nasdaq Helsinki), Sanoma Oyj (listed on Nasdaq Helsinki) (board member until 2016), member of the board of directors of Suomalaisen Yhteiskoulun Osakeyhtiö, CVON Innovation Services Oy and Faux Oy and a member of the supervisory board of SAP SE (listed on Xetra and The New York Stock Exchange). In the past five years, Pekka Ala-Pietilä has previously been chairman of the board of directors of Solidium Oy, and member of the board of directors of Pöyry PLC until 2017 (listed on Nadaq Helsinki). Pekka Ala-Pietilä holds a Master of Science in Economics from Helsinki School of Economics, Finland. Thomas Broe-Andersen (born 1972, Danish nationality) has been a member of the board of directors of NC TopCo A/S since January 2016 and Deputy Chairman of the Board of Directors of the Company since May 2018 as a representative of FSN Capital Partners. Thomas Broe-Andersen is currently a partner in FSN Capital Partners, CEO of TBA Holding 2 ApS, chairman of the board of directors of Forward TopCo A/S and member of the board of directors of Fitness World A/S (chairman of the board of directors until 2015), Fitness World Group A/S (chairman of the board of directors until 2015), FSN SKA A/S (chairman of the board of directors until 2015), EET A/S (chairman of the board of directors until 2015) and EET Holdings A/S (chairman of the board of directors until 2015). In the past five years, Thomas Broe-Andersen has previously been member of the executive management of EET A/S, EET Holdings A/S, TBA-F Holding ApS (dissolved by demerger), TBA Holding 3 ApS (dissolved by declaration), TBA Holding 1 ApS (dissolved by a voluntary winding-up), TBA Holding AS (dissolved by merger), chairman of the board of directors of Danish Brake A/S, P-SKA 2007 A/S (dissolved by merger) TBA Holding AS (dissolved by merger), Skamol Holding A/S (dissolved by merger), Fresh Fitness A/S (dissolved by merger), EET A/S (dissolved by merger) and member of the board of directors of Skamol A/S, Tactel Holding AB, HC TopCo A/S (dissolved by merger), Partner IV AS (dissolved), Room 5 Holding AS (dissolved). Thomas Broe-Andersen holds a Master of Science in Economics from Aarhus School of Business, Denmark. Pernille Fabricius (born 1966, Danish nationality) has been a member of the Board of Directors in NC TopCo A/S since October 2017 and member of the Board of Directors of the Company since May 2018. She is currently Group CFO and member of the board of directors of John Guest International Limited as well as member of the board of directors of its subsidiaries John Guest Limited, John Guest Engineering and John Guest Speedfit. Pernille Fabricius is also member of the board of directors of Royal Greenland A/S, Gabriel Holding A/S (listed on Nasdaq Copenhagen), Gabriel A/S, Gabriel Innovation A/S, Gabriel Ejendomme A/S, Zenxit A/S, Højgaard Holding A/S (listed on Nasdaq Copenhagen) and MT Højgaard A/S. In addition, Pernille Fabricius runs the consulting company Fabricius/Faber Consulting. In the past five years, Pernille Fabricius has previously been chairman of the board of directors of Atak A/S, Damco (Chile) Holding A/S, Damco (Saudi) Holding A/S, Damco (Brazil) Holding A/S, Damco (Canada) Holding A/S and member of the board of directors of Damco International A/S and Damco A/S. She has also been Global CFO of Damco Group and a member of the executive management in Damco Eastern Europe ApS (currently undergoing voluntary liquidation). Pernille Fabricius was a member of the advisory board, industrial advisor and chairman of the board of Silverfleet Capital Limited's portfolio company Ipes and Group CFO of Topaz Group and Getinge Group, the latter of which she was also a member of the board of directors in the subsidiaries, Getinge Infection Control Aktiebolag, Getinge Letting AB, Getinge Treasury Aktiebolag (as deputy board member), Maquet Critical Care AB, Maquet Holding AB, Arjo Ldt Med. Aktiebolag and Arjo Finance Holding AB in which she was also CEO. Pernille Fabricius holds a Master of Science in Business Administration and Auditing and an MBA, both from Copenhagen Business School, Denmark and a Master of Science in Finance and LL.M. in European Union Law, both from Leicester University, United Kingdom. Juha Christensen (full name: Juha Christen Christensen, born 1964, Danish nationality) has been a member of the board of directors of NC TopCo A/S since November 2016. Juha Christensen is currently CEO of CloudMade May 2018. He is currently chairman of the board of directors of CloudMade Ltd., CloudMade, Inc., CloudMade GmbH, Cogniance, Inc., The Pad, Inc., Buttonwood Financial Inc and Brandworkz Ltd. Juha Christensen is also the deputy chairman of Bang & Olufsen A/S (listed on Nasdaq Copenhagen) (board member until 2017). In the past five years, Juha Christensen has been a board member of Selskabet af 30. August 2017 A/S under konkurs (currently undergoing bankruptcy proceedings), Selskabet af 7. September 2017 ApS under 187 --- konkurs (currently undergoing bankruptcy proceedings) and Pelican Imaging Corporation, Inc. Juha Christensen has attended London Business School. Bo Rygaard (born 1965, Danish nationality) has been a member of the Board of Directors of NC TopCo since November 2016 and member of the Board of Directors of the Company since May 2018. Bo Rygaard is a member of the executive management and board of directors of Margot and Thorvald Dreyers Fond. Bo Rygaard is chairman of the board of directors of Skamol A/S, KFI Erhvervsdrivende Fond, Parken Sport & Entertainment A/S (listed on Nasdaq Copenhagen), Lalandia Billund A/S, Lalandia A/S, Fitness DK A/S, Fitness DK Holding A/S, Accomodation Services A/S, EET A/S (board member until 2015) and Krista og Viggo Petersens Fond (board member until 2017). Bo Rygaard is also member of the board of directors of Ejendomsaktieselskabet Vest, Kavi Invest A/S, Tatin ApS, Det Rytmiske Musikhus' Fond, Marie & M.B. Richters Fond, Ejendomsselskabet 1.11.1979 ApS, Racina ApS, Statens Ejendomssalg A/S, ES North A/S, Knud og Dagny Gad Andresens Fond, EJD. Vallensbækvej 46, Tømrerm. H. og G. Langhoffs Fond, Frants Richters Fond, Ejendommen Boyesgade 8-14 m.fl., Ejendommen Sundby Industrigaard, Matr. Nr. 5661 Udenbys Klædebo I/S Titangades Industrihus, Ejendommen Valby Industricenter II, EJD. Wichmannsgade 15 and Ejendommen Birketinget 6. In addition, Bo Rygaard runs the consulting firm Bo Rygaard Consulting. In the past five years, Bo Rygaard has previously been chairman of the board of directors of HC Topco A/S (dissolved by merger), J.H. Schultz Information A/S, A/S KFI-Holding (dissolved by merger), A/S KFI-Leasing (dissolved by merger), A/S KFI-DETAIL (dissolved by merger), A/S KFI-Finans (dissolved by merger), KFU-Fonden (dissolved by merger), A/S Total-Invest/KFI (dissolved by merger), KFI Arkitekter og Konsulenter ApS (dissolved by merger), KFI Retail ApS, Jægersborg Alle Midtpunkt ApS, and J.H. Schultz Holding A/S and a member of the board of directors of Fidelia ApS (dissolved by voluntary winding-up), Qubiqa Holding A/S (dissolved by merger), Erik Møller Arkitekter A/S, Kalvebod Hus ApS (dissolved by merger), Riantics A/S, Qubiqa Esbjerg A/S and ApS Ejendomsselskabet K.L.A./KFI (dissolved by merger). Bo Rygaard holds a Master of Science from Copenhagen Business School, Denmark. Carsten Gomard (full name: Carsten Krogh Gomard, born 1966, Danish nationality) co-founded the Group together with André Rogaczewski, CEO and Claus Jørgensen, COO, and was a part of the executive management group until 2010. Carsten Gomard has been a member of the board of directors of NC TopCo A/S since February 2016 and member of the Board of Directors of the Company since May 2018. Carsten Gomard is currently a member of the executive management of Carsten Gomard Holding ApS and Netcompany Holding ApS of which he is also a member of the board of directors. In addition, Carsten Gomard is chairman of the board of directors of Netcompany Holding I A/S, member of the board of directors of Accunia A/S, Accunia Fondsmaeglerselskab A/S, ApS Komplementarselskabet Hillerød III, K/S Hillerød III, Brown Guy ApS. In the past five years, Carsten Gomard has previously been deputy chairman of the board of directors of NC AX 1 ApS (dissolved by demerger), member of the board of directors of Fortconsult A/S, Selma Diagnostics ApS and member of the executive management and board of directors of Netcompany Holding ApS (dissolved by merger), NC AX 2 ApS (dissolved by merger) and NC AX 3 ApS (dissolved by merger). Carsten Gomard also provides consultancy services to Kammeradvokaten, Samuelsen Network, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) as well as to the Group. Carsten Gomard holds a Master of Science in Computer Science and a PhD in Computer Science, both from the University of Copenhagen, Denmark. ## Board practices and committees The Board of Directors has resolved that the following board practices and committees shall take effect from the day of Admission. The Board of Directors normally holds at least six regular meetings annually, including a strategy review, plus ad hoc meetings as required. Extraordinary board meetings are convened by the Chairman when necessary or when requested by a member of the Board of Directors, a member of the Executive Management or by the Company's auditor. The Board of Directors forms a quorum when more than half its members are represented, including the Chairman or the Deputy Chairman. Resolutions of the Board of Directors are passed by a simple majority of the votes present at the meeting. In the event of equal votes, the Chairman, or in his/her absence the Deputy Chairman, shall have the casting vote. The Board of Directors conducts an annual evaluation of the performance, achievements, competencies and composition of the Board of Directors and of the individual members as well as the collaboration with the Executive Management. The following board committees have been established by the Board of Directors, each of which has a charter setting forth its purpose and responsibilities. All the committees report and make recommendations to the Board of Directors. 188 --- 189 # Audit Committee The Company’s audit committee (the “Audit Committee”) shall assist the Board of Directors with the oversight of the financial reporting process, the statutory audit of the Company’s financial report, internal control and risk management systems, the Company’s whistleblowing procedures and complaints, the supervision of the external auditor’s independence and the procedure for the election of the external auditor. In accordance with the Recommendations on Corporate Governance of the Danish Committee on Corporate Governance issued in November 2017 (the “Corporate Governance Recommendations”), the Company has decided that the Chairman of the Board of Directors may not also be the chairman of the Audit Committee. The majority of the members of the Audit Committee is required to meet the independence requirements set out in the Corporate Governance Recommendations, unless the Board of Directors decides otherwise. In addition, at least one member shall have accounting or audit qualifications and between them, the members shall possess such expertise and experience as to provide an updated insight into, and experience in, the financial, accounting and audit aspects of companies with shares admitted to trading and official listing on a regulated market. As of the date of this Offering Circular, the Board of Directors has decided that the majority of the members of the Audit Committee will not meet the independence requirements set out in the Corporate Governance Recommendations. The Audit Committee shall consist of no less than three members appointed by and among the Board of Directors, including the chairman of the Audit Committee, and is expected to consist of Pernille Fabricius as chairman, Thomas Broe-Andersen and Carsten Gomard. Members of the Executive Management, the Company’s external auditor and any employee of the Company shall participate in meetings of the Audit Committee if so requested by the Audit Committee and the external auditor shall attend at least one meeting per year or the relevant part hereof where the Executive Management is not present. # Remuneration Committee The Company’s remuneration committee (the “Remuneration Committee”) shall ensure that the Company maintains a Remuneration Policy for the members of the Board of Directors and the Executive Management which includes the overall guidelines on incentive pay for the Board of Directors and the Executive Management in accordance with Section 139 of the Danish Companies Act, and to evaluate and make recommendations for the remuneration of the members of the Board of Directors and the Executive Management. The Remuneration Committee shall consist of no less than two members appointed by and among the Board of Directors, including the chairman of the Remuneration Committee. The majority of the members of the Remuneration Committee must be independent, unless the Board of Directors decides otherwise. The Remuneration Committee is expected to consist of Juha Christensen as chairman, Bo Rygaard and Pekka Ala-Pietilä. The majority of the members of the Remuneration Committee will meet the independence requirements set out in the Corporate Governance Recommendations. # Nomination Committee The Company’s nomination committee (the “Nomination Committee”) shall assist the Board of Directors with ensuring that appropriate plans and processes are in place for the nomination of candidates to the Board of Directors and the Executive Management. Moreover, the Nomination Committee shall evaluate the composition of the Board of Directors and the Executive Management. This includes making recommendations for the nomination or appointment of members of the Board of Directors and the Executive Management. The Nomination Committee shall consist of no less than two members appointed by and among the Board of Directors, including the chairman of the Nomination Committee. The majority of the members of the Nomination Committee must be independent, unless the Board of Directors decides otherwise. The Nomination Committee is expected to consist of Thomas Broe-Andersen as chairman and Pekka Ala-Pietilä. As of the date of this Offering Circular, the Board of Directors has decided that the majority of the members of the Nomination Committee will not meet the independence requirements set out in the Corporate Governance Recommendations. # Compensation of the Board of Directors Members of the Board of Directors receive fixed annual fees and additional fees for their work in committees, such as the Audit Committee, the Remuneration Committee and Nomination Committee or other committees established by the Board of Directors, which will be presented for approval by the Company’s shareholders at the general meeting. Members of the Board of Directors may retain additional fee for operational --- tasks carried out on an ad-hoc basis outside the scope of the ordinary duties of the Board of Directors. Such additional tasks must be approved by the Board of Directors and any additional fees must be determined by the Board of Directors. Expenses, such as travel and accommodation in connection with board meetings as well as relevant training, may be reimbursed by the Company. Remuneration of the Board of Directors shall not include incentive programmes. The Company was incorporated in April 2018 and accordingly, no compensation was paid by the Company to the Board of Directors in respect of the financial year 2017. However, in respect of the financial year 2017, the members of the Board of Directors have received compensation in the total amount of DKK 1.7 million from NC TopCo A/S for their board member services. Thomas Broe-Andersen waived his rights to board fees for the financial year 2017. In addition, Carsten Gomard entered into a consultancy contract in September 2017 (which was amended in April 2018) with the Group regarding provision of consultancy services, the scope of which shall be agreed with the Chairman. Pursuant to the contract, Carsten Gomard is entitled to a quarterly fee of DKK 200,000 in addition to any fees received as per his membership of the Board of Directors, however not more than DKK 1,000,000 in the aggregate per year. The contract may be terminated with a notice period of 12 months, by either the Group or Carsten Gomard. Following completion of the IPO Reorganisation and the Admission, no member of the Board of Directors will receive compensation from any Group subsidiary for any board services performed to such subsidiary. The Company's extraordinary general meeting has approved a resolution that, subject to completion of the Offering, the members of the Board of Directors for the financial year 2018 will receive a fixed annual base fee of DKK 350,000 while the Chairman receives a supplementary fee of DKK 700,000 and the Deputy Chairman receives a supplementary fee of DKK 350,000 for their extended duties. Members of the Audit Committee and the chairman of the Audit Committee will receive a supplementary fee of DKK 87,500 and DKK 175,000, respectively. Thomas Broe-Andersen has decided to waive his rights to board fees for the financial year 2018. Members of the Remuneration Committee and Nomination Committee will receive a supplementary fee of DKK 87,500. However, the Chairman and Deputy Chairman will not receive any additional supplementary fee for their participation in the Remuneration Committee and Nomination Committee. Neither the Company nor any Group company has granted any loans, issued any guarantees or undertaken any other similar obligations to or on behalf of the Board of Directors or any of its members. No member of the Board of Directors is entitled to any kind of compensation upon resignation as a member of the Board of Directors. The Company or any Group company have not allocated funds or made provisions for any pension benefits, severance scheme or the like for the Board of Directors and have no obligation to do so. ## Executive Management According to article 11.1 of the Articles of Association, the Board of Directors appoints an Executive Management consisting of one to four members. The primary task of the Executive Management is to carry out the day-to-day management of the Group with the support of the Key Employee who reports to the CEO. The following table presents an overview of the current members of the Executive Management: | Name | Position | Year of first employment with the Group | Year of appointment to current position | | --- | --- | --- | --- | | André Rogaczewski | CEO | 2000 | 2018^{(1)} | | Claus Jørgensen | COO | 2000 | 2018^{(1)} | | Thomas Johansen | CFO | 2017 | 2018 | (1) André Rogaczewski and Claus Jørgensen founded the Group together with Carsten Gomard, member of the Board of Directors. The Company believes that all the members of the Executive Management possess the professional skills and international experience required for their positions in the Group and to manage a company with shares admitted to trading and official listing on Nasdaq Copenhagen. The business address of the members of the Executive Management is: Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. --- 191 # Biographies Other than as presented below, none of the members of the Executive Management have been members of the administrative, management or supervisory bodies of a company or a partnership or a partner in a partnership outside the Group within the past five years. André Rogaczewski (full name: André Stelsig Rogaczewski, born 1968, Danish nationality and born with Polish nationality) co-founded the Group together with Claus Jørgensen, COO, and Carsten Gomard, member of the Board of Directors, and has since been a part of the executive management group. André Rogaczewski is currently the chairman of the Confederation of Danish Industries (Dansk Industry), Digital Vendors, a member of the board of directors of the Confederation of Danish Industries (Dansk Industry), Fire Eater A/S, Auction Group A/S, Netcompany Holding ApS and PAYProff Holding A/S. In the past five years, André has previously been chairman of the board of directors of NC AX 1 ApS (dissolved by demerger), NC AX 2 ApS (dissolved by merger) and of NC AX 3 ApS (dissolved by merger), member of the board of directors of Netcompany Holding ApS (dissolved by merger) and Shopall24 Technology ApS under konkurs and a member of the executive management of André Rogaczewski Holding ApS. In addition, André is a member of the Disruption Council of the Danish Government. André Rogaczewski holds a Master of Science in computer science and mathematics from University of Aalborg. Claus Jørgensen (full name: Claus Bo Jørgensen, born 1967, Danish nationality) co-founded the Group together with André Rogaczewski, CEO, and Carsten Gomard, member of the Board of Directors, and has since been a part of the executive management group. Claus Jørgensen is currently a member of the executive management of Holdingselskabet Claus Jørgensen ApS. In the past five years, Claus has been the chairman of the board of directors of Restaurationselskabet af 19. august 2010 ApS (dissolved by voluntary winding-up), the deputy chairman of the board of directors of NC AX 2 ApS (dissolved by merger), NC AX 3 ApS (dissolved by merger), a member of the board of directors of NC AX 1 ApS (dissolved by demerger) (member of the executive management until 2016), Netcompany Holding ApS (dissolved by merger), Shopall24 Group ApS and Shopall24 Technology ApS under konkurs (currently undergoing bankruptcy proceedings). Claus Jørgensen holds a Master of Science in economics from University of Odense. Thomas Johansen (born 1970, Danish nationality) has been the CFO of the Group since June 2017. In the past five years, Thomas Johansen has previously been member of the executive management of Simcorp A/S, chairman of the board of directors of Køge Boldklub and member of the board of directors of COOP Bank A/S. Thomas Johansen holds a Master of Science in Business Administration and Auditing from Copenhagen Business School and an MBA from Rotterdam School of Management. # Compensation of the Executive Management The Company was incorporated in April 2018 and accordingly, no compensation was paid by the Company to the Executive Management in respect of the financial year 2017. However, in respect of the financial year 2017, the members of the Executive Management have received compensation from other Group entities for services performed to such Group entities which consisted of a fixed salary, a cash bonus as well as customary benefits in accordance with market standards. The following table presents an overview of the compensation paid by the Group to the Executive Management in respect of the financial year 2017: | DKK million | André Rogaczewski | Claus Jørgensen | Thomas Johansen | | --- | --- | --- | --- | | Salaries, pension and other remuneration | 3.3 | 3.3 | 1.1 | | Cash bonus | — | — | 0.4 | | Share based payments | — | — | — | For the financial year ending 31 December 2018, the compensation of the Executive Management may consist of a combination of fixed salary, a cash bonus under the STIP (as defined herein) as well as customary benefits in accordance with market standards and which monetary value cannot exceed $10\%$ of the annual fixed salary. In addition, the members of the Executive Management will participate in the Post-IPO LTIP (as defined herein). The compensation of the members of the Executive Management for the financial year ending 31 December 2018 is in respect of all of their services provided to the Group. Under the STIP for the financial year 2018, the members of the Executive Management may receive a performance-based cash bonus of up to $60\%$ of their annual base salary at the time of grant. See “—Incentive Programmes—Performance-based programmes—Short-term incentive programme” for further details. --- Under the Post-IPO LTIP for the financial year 2018, the members of the Executive Management may be granted restricted share units, the value of which, at the time of grant, is equal to a maximum of 80%, of their annual base salary. See “—Incentive Programmes—Performance-based programmes—Post-Offering long-term incentive programme” for further details. The Group has not granted any loans, issued any guarantees or undertaken any other similar obligations to or on behalf of the Executive Management. Each member of the Executive Management is, under their respective service contracts, entitled to a notice period of 12 months if the employment is terminated by the Company. Subject to certain conditions, the Company may terminate the employment of each member of the Executive Management with six months' notice in case of long-term illness or permanent disability. Each member of the Executive Management may terminate the employment with nine months' notice. The Company or any Group company have not allocated funds or made provisions for any pension benefits, severance scheme or the like for any member of the Executive Management and have no obligation to do so. Under their service contracts, each member of the Executive Management is subject to a non-competition clause for a period of 12 months after expiry of the notice period. The non-competition clauses cover all business carried on by the Company, the Company's parent company, the Company's subsidiaries and affiliated companies at the relevant time. Under Danish mandatory law, non-competition clauses cannot be enforced after expiry of the notice period if termination is initiated by the Company without the member of the Executive Management having given reasonable cause for the dismissal or if termination is initiated by a member of the Executive Management due to the Company's breach. ## Key Employee The Key Employee supports the Executive Management in the day-to-day management within his functional areas. The following table presents the Group's current Key Employee: | Name | Position | Year of first employment with the Group | Year of appointment to current position | | --- | --- | --- | --- | | Gustaf Löfberg | Country Manager, Denmark | 2000 | 2017 | The business address of the Key Employee is: Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. ## Biographies Other than as presented below, the Key Employee has not been a member of the administrative, management or supervisory bodies of a company or a partnership or a partner in a partnership outside the Group within the past five years. Gustaf Löfberg (full name: Gustaf Pontus Löfberg, born 1971, Swedish nationality) has from 2000 been employed with the Group and since November 2017 been employed as Country Managing Partner of Denmark. Gustaf Löfberg holds a Bachelor of Business Administration from the School of Economics and Management of University of Lund and a Master of Science in Computer Science from Faculty of Engineering LTH of Lund. ## Compensation of the Key Employee The Company was incorporated in April 2018 and accordingly, no compensation was paid by the Company to the Key Employee in respect of the financial year 2017. However, in respect of the financial year 2017, the Key Employee has received compensation from other Group entities for services performed to such Group entities which consisted of a fixed salary in the aggregate amount of DKK 2.6 million as well as customary benefits in accordance with market standards. For the financial year ending 31 December 2018, the compensation of the Key Employee may consist of a combination of fixed salary, a cash bonus under the STIP (as defined herein) as well as customary benefits in accordance with market standards and which monetary value cannot exceed 10% of the annual fixed salary. In 192 --- addition, the Key Employee will participate in the Post-IPO LTIP (as defined herein). The compensation of the Key Employee for the financial year ending 31 December 2018 is in respect of all of the Key Employee’s services provided to the Group. Under the STIP for the financial year 2018, the Key Employee may receive a performance-based cash bonus of up to 30% of the Key Employee’s annual base salary at the time of grant. See “—Incentive Programmes—Performance-based programmes—Short-term incentive programme” for further details. Under the Post-IPO LTIP for the financial year 2018, the Key Employee may be granted restricted share units, the value of which, at the time of grant, is equal to a maximum of 20%, of the Key Employee’s annual base salary. See “—Incentive Programmes—Performance-based programmes—Post-offering long-term incentive programme” for further details. The Group has not granted any loans, issued any guarantees or undertaken any other similar obligations to or on behalf of the Key Employee. The Key Employee is, under the Key Employee’s service contract, entitled to a notice period of 12 months if the employment is terminated by the Group. Subject to certain conditions, the Group may terminate the employment of the Key Employee with six months’ notice in case of long-term illness or permanent disability. The Key Employee may terminate the employment with nine months’ notice. The Company or any Group company have not allocated funds or made provisions for any pension benefits, severance scheme or the like for the Key Employee and have no obligation to do so. Under the Key Employee’s service contract, the Key Employee is subject to a non-competition clause for a period of 12 months after expiry of the notice period. The non-competition clause covers all business carried on by the Group and affiliated companies at the relevant time. Under Danish mandatory law, non-competition clauses cannot be enforced after expiry of the notice period if termination is initiated by the Group without the Key Employee having given reasonable cause for the dismissal or if termination is initiated by the Key Employee due to the Group’s breach. ## Incentive Programmes Three incentive programmes will be established in connection with the Offering, comprising the Group’s short-term incentive programme, a cash-based bonus scheme (the “STIP”) replacing the current cash bonus schemes and a share-based post-offering long-term incentive programme (the “Post-IPO LTIP”). In accordance with Section 139 of the Danish Companies Act, the Company has adopted a Remuneration Policy that includes the overall guidelines on incentive pay for the Board of Directors and the Executive Management which have been approved by the general meeting. Any amendments to the Remuneration Policy, including incentive guidelines, will be presented to the Company’s shareholders for approval at a general meeting. The Remuneration Policy, including incentive guidelines, is available on the Company’s website. ## Performance-based programmes ### Short-term incentive programme (the “STIP”) The current unit-based cash bonus scheme of the Company comprising certain employees and the discretionary bonus scheme comprising one member of the Executive Management will be cancelled with retrospective effect from 1 January 2018 and replaced by the STIP, a short-term cash based bonus scheme, with participation from the Executive Management and the Key Employee, neither of whom participate in the current unit-based cash bonus scheme, as well as certain other employees, previously comprised by the unit-based cash bonus scheme. The STIP will become effective upon the date of completion of the Offering with respect of the Executive Management and on 1 January 2018 in respect of the Key Employee as well as certain other employees. The participants will be eligible to receive an annual performance cash bonus, which in respect of the Executive Management will be subject to certain predefined financial targets for the Group as well as individual targets being met. For 2018 the STIP for Executive Management will be calculated pro rata from the date of completion of the Offering until 31 December 2018. The STIP for the Key Employee as well as certain other employees is discretionary and is based on individual performance and the Group’s overall performance. 193 --- In relation to the introduction of the STIP for the Executive Management and the Key Employee, the Group expects to incur additional costs in 2018 of a maximum of DKK 3.5 million, equal to the full potential payments to the current members of the Executive Management and the Key Employee under the STIP. In addition, the fixed salaries of the Executive Management and the Key Employee have been increased to reflect a market based remuneration model, which is expected to result in additional costs in 2018 of DKK 2 million. With respect to the other employees participating in the STIP, which previously participated in the unit-based cash bonus scheme, the introduction of the STIP is not expected to have a material impact in 2018. However, as a result of the introduction of the STIP for certain of the Group's employees in Norway and the UK, the Group expects to incur additional costs in 2018 of a maximum of DKK 1.5 million, equal to the full potential payments to the Group's employees in Norway and the UK, currently expected to participate in the STIP. ## Post-offering long-term incentive programme (the "Post-IPO LTIP") The Post-IPO LTIP will in respect of the Executive Management the Key Employee and certain other employees be established in connection with and subject to completion of the Offering. Pursuant to the Post-IPO LTIP, the Executive Management, the Key Employee and certain other employees are eligible to receive a number of restricted share units at no cost, as determined by the Board of Directors with respect to the Executive Management and as determined by the Executive Management with respect to the Key Employee and certain other employees. Restricted share units are expected to be granted annually (up to 2% of the Company's share capital on an annual basis) in connection with the annual general meeting, as determined by the Board of Directors each year. In respect of the Executive Management, the restricted share units will vest based on achievement of certain financial targets during the three year period from 1 July 2018 to 30 June 2021 and is further conditional upon the member of Executive Management holding Shares with a market value corresponding to one year's fixed salary, prior to any sale of Shares vested under the Post-IPO LTIP, with the exception of inter alia disposals made with a view to settle any tax liabilities incurred as a result of the vesting of restricted share units. The financial targets for the first grant under the Post-IPO LTIP to Executive Management will be based on CAGR in Revenue and CAGR in Adjusted EBITA, which will be weighted equally and calculated by linear interpolation on a sliding scale from 0-100% on the basis of achieving a CAGR in Revenue of a given target and a CAGR in Adjusted EBITA of a given target. In respect of the Key Employee and other employees, the restricted share units will vest during a three year vesting period. Vesting is not conditional upon achieving any financial or non-financial targets. The first grant of restricted share units under the Post-IPO LTIP to the Executive Management and to the Key Employee and the other participating employees will have an estimated aggregate theoretical value of respectively DKK 4.5 million (calculated as 80% and 20% of the fixed salary for the period from 7 June to 31 December 2018 for the Executive Management and the Key Employee, respectively) and DKK 14.5 million (calculated as the value of the grants based on the fixed salary for the period from 7 June to 31 December 2018). The Post-IPO LTIP will be treated as an equity-settled share-based incentive programme and expensed over the three-year vesting period, based on a number of conditions, e.g. market price at grant, peer group volatility and estimated retention effects. The Group expects to purchase treasury shares to cover restricted share units granted under the Post-IPO LTIP. The restricted share units may, as an alternative to settlement in Shares in the Company, be settled in cash. For the purpose of delivering Shares to the participants in the Post-IPO LTIP upon vesting of the grant of restricted share units after the first vesting period, the Group has entered into an equity swap allowing the Company, on 15 April 2019, to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) at the Offer Price from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap (the "LTIP Equity Swap"). The number of Shares which may be purchased by the Company from Danske Banks A/S under the LTIP Equity Swap, will be reserved for Danske Bank A/S to purchase in the Offering. The costs related to the LTIP Equity Swap is expected to be approximately DKK 1 million, which will be expensed over the duration of the LTIP Equity Swap. See also "The Offering—Allocation and Reduction". 194 --- 195 # Offering related programmes ## MIP Following the transaction in 2016, where the Significant Shareholders acquired a majority stake in the Group, a management incentive programme (the “MIP”) was established with participation from certain of the MIP Participants and Employee Shareholders. The shares granted pursuant to the MIP, comprise shares in NC TopCo A/S, all of which will be exchanged under the terms of the MIP for new Shares in the Company prior to Admission. The exchange will be completed through a series of share exchanges as part of the IPO Reorganisation. See “Reorganisation” for a description of the steps involved in IPO Reorganisation. The effective exchange ratio for the ordinary shares and the preference shares into new Shares in the Company will be determined on the basis of a combination of factors, that take into account, among other things, the Offer Price. The aggregate number of Shares that will be issued to the MIP Participants and Employee Shareholders as a result of the IPO Reorganisation step relating to the MIP, will be 577,130, assuming an Offer Price at bottom end of the Offer Price Range, 588,085 if the Offering is completed at the midpoint of the Offer Price Range and 597,042 if the Offering is completed at the top end of the Offer Price Range. Upon Admission, the MIP will terminate. Further, the MIP Participants and Employee Shareholders holding Shares through NC ShareCo ApS and NC ManCo AS have agreed, following Admission, to carry out a demerger of NC ShareCo ApS and NC ManCo AS into a number of new individual holding companies held by each of the respective shareholders. See “Ownership Structure and Selling Shareholders—Table of shareholders” for an overview and sample calculation of the Existing Group Shareholders’, and the MIP Participants and Employee Shareholders’ Shares in the Company following the IPO Reorganisation and completion of the Offering, respectively. ## Statement on Past Records During the past five years, none of the members of the Board of Directors, the Executive Management or the Key Employee have been (i) convicted of fraudulent offenses; (ii) directors or officers of companies that have entered into bankruptcy, receivership or liquidation, other than as set out in “—Board of Directors”, “—Executive Management” and “—Key Employee” above; or (iii) subject to any public incrimination and/or sanctions by statutory regulatory authorities (including designated professional bodies), and have not been disqualified by a court from acting as a member of an issuer’s board of directors, executive board or supervisory body or being in charge of an issuer’s management or other affairs. ## Statement on Conflicts of Interest There are no family ties among the members of the Board of Directors, the Executive Management or the Key Employee. With the exception of the members of the Board of Directors, Thomas Broe-Andersen and Bo Rygaard, the Company is not aware of any member of the Board of Directors, or the Executive Management or the Key Employee having been appointed to their current position pursuant to an agreement or understanding with the major shareholders, customers, suppliers or other parties. Thomas Broe-Andersen is a partner at FSN Capital Partners and Bo Rygaard is an Executive Advisor to FSN Capital Partners. FSN Capital Partners is acting as sub-investment advisor to FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of the Significant Shareholders, and thus, Thomas Broe-Andersen and Bo Rygaard represent the interests of the Significant Shareholders. None of the members of the Board of Directors, or the Executive Management or the Key Employee have conflicts of interest with respect to their duties as members of the Board of Directors, or the Executive Management or as Key Employee except for the members of the Board of Directors, Thomas Broe-Andersen and Bo Rygaard, for the reasons set out in the paragraph above. See also “Ownership Structure and Selling Shareholders” for a description of the current ownership interest in the Company held by members of the Board of Directors, or the Executive Management and the Key Employee. None of the members of the Board of Directors, the Executive Management or the Key Employee have positions in other companies which could result in a conflict of interest vis-à-vis such companies, either because the Group has an equity interest in such company or because the Group and the company concerned have an ongoing business relationship, except as disclosed under “Related Party Transactions”. However, the Group may do business in the ordinary course with companies in which members of the Board of Directors, or the Executive Management, or the Key Employee may hold positions as directors or officers. --- It follows from the Rules of Procedure of the Board of Directors and the Danish Companies Act that a member of the Board of Directors or the Executive Management shall not participate in the preparation, discussions or the decision-making process concerning an agreement between the Company (or another company within the Group) and the member in question or concerning legal proceedings between the member in question and the Company (or another company within the Group) or an agreement between the Company (or another company within the Group) and any third party or legal proceedings brought against any third party, if the member in question has a significant interest therein that may conflict with its interests. ## Description of Internal Control and Financial Reporting Procedures The Board of Directors, the Audit Committee and the Executive Management are ultimately responsible for the Group’s risk management and internal controls in relation to its financial reporting, and approve the Group’s general policies in that regard. The Audit Committee assists the Board of Directors in overseeing the reporting process and the most important risks involved in this respect. The Executive Management together with the delivery unit directors are responsible for the effectiveness of the internal controls and risk management and for the implementation of such controls aimed at mitigating the risk associated with the financial reporting. The Group has internal control and financial reporting procedures aimed at enabling it to monitor its performance, operations, funding and risk. While the Group continues to improve its procedures and internal control, including documentation of the internal control systems, the Group believes that its reporting and internal control systems enable it to be compliant with disclosure obligations applying to issuers of shares admitted to trading and official listing on Nasdaq Copenhagen. The Group’s internal control and financial reporting procedures include, among other things: - Consolidated monthly financial information packages, including key performance indicators per operating segment covering hours worked, hours charged and hours used for non-client facing activities, net sales, detailed overview of top ten and bottom ten projects per delivery unit, and contribution and Group income statement, balance sheet, cash flow results and covenant calculations compared with budgeted performance, latest forecast (done on a quarterly basis) and previous year’s performance and explanations of any deviations. The monthly financials are reported to the Executive Management; - Monthly highlight reports from business and operating segments including key performance indicators on actual performance compared with budgeted performance, latest forecast and previous year’s performance and explanations of any deviations. The monthly financial highlights are reported to the Executive Management and discussed at monthly review sessions with management of the operating segments; - Monthly highlight reports from the treasury function on movement in clearing working capital. The monthly financial highlights are also reported to the CFO; - Liquidity management executed on a daily basis, with a view to securing the Group’s required liquidity through appropriate cash management, and maintaining adequate liquidity reserves at any time through a combination of readily available cash, liquid investment portfolios and uncommitted as well as committed credit facilities; and - Centralised planning processes including a centrally driven budget process with bottom-up input from all operating segments, quarterly updated “full year estimates”. The Group has adopted a whistle-blower policy. ## External system audit The Group’s independent auditors are appointed for a term of one year by the shareholders at the Company’s annual general meeting upon recommendation from the Audit Committee. The Board of Directors assesses the independence and competencies and other matters pertaining to the auditors. The framework for the auditors’ compensation and duties, including audit and non-audit tasks, is agreed annually between the Board of Directors and the Group’s auditors based on recommendation from the Audit Committee. The Group has regular dialogue and exchange of information with its auditors. ## General compliance The Group has adopted a Code of Conduct which applies to all the Group’s operations and employees and stipulates the Group’s fundamental rules on acting responsibly and with integrity. The aim of the Code of 196 --- Conduct is to create a company culture that promotes integrity, the Group’s values and ethical guidelines as well as the Group’s environmental policy. The Group has also adopted an Anti-Bribery and Anti-Corruption Policy which sets strict prohibitions and a zero tolerance for bribery and corruption, including guidelines for handling gifts and hospitality, to ensure compliance with all anti-corruption laws, regulations or standards of conduct relevant for the Group’s field of business. ## Corporate Governance The Company is committed to exercising good corporate governance at all times and the Board of Directors will regularly assess rules, policies and practices according to the Corporate Governance Recommendations. Nasdaq Copenhagen has incorporated the Corporate Governance Recommendations in the Rules for issuers of shares of 3 January 2018 (the “Issuer Rules of Nasdaq Copenhagen”). Accordingly, as a company with shares admitted to trading and official listing on Nasdaq Copenhagen, the Company will be required to comply with or explain deviations from the Corporate Governance Recommendations as also required pursuant to Section 107b of the Danish Consolidated Financial Statements Act no. 1580 of 10 December 2015. In connection with the Offering and with effect from the Admission, the Board of Directors has prepared a statutory statement on corporate governance that reflects the compliance of the Company with each of the Corporate Governance Recommendations. The Company intends to comply with the Corporate Governance Recommendations in all material respects, however with the following exceptions: - The majority of the members of the Remuneration Committee will meet the independence requirements set out in the Corporate Governance Recommendations. However, the majority of the members of the Audit Committee and of the Nomination Committee will not meet the independence requirements as set out in the Corporate Governance Recommendations. The background for this deviation is a prioritisation of the skillset, resources and availability of the current composition of the Board of Directors. The Board of Directors will continue to evaluate the composition of its committees, including in the light of the Corporate Governance Recommendations. The Company’s corporate governance practices are also accounted for in the statutory statement on corporate governance, which is available on the Company’s website. 197 --- 198 # OWNERSHIP STRUCTURE AND SELLING SHAREHOLDERS ## Ownership Structure The Company was incorporated on 16 April 2018 for the purpose of being admitted to trading and official listing on Nasdaq Copenhagen as the parent company of the Group at completion of the Offering and the IPO Reorganisation. Prior to completion of the IPO Reorganisation, which will be carried out in connection with pricing and prior to the Admission and completion of the Offering, the Company has a different ownership structure than the Group. See “Reorganisation” for a more detailed description of the steps and transactions involved in the IPO Reorganisation. Following completion of the IPO Reorganisation and prior to Admission, the Shares will be directly owned by the Significant Shareholders (44.1%), André Rogaczewski Holding ApS (the holding company of André Rogaczewski, CEO) (8.5%), Holdingselskabet Claus Jørgensen ApS (the holding company of Claus Jørgensen, COO) (8.5%), Carsten Gomard Holding ApS (the holding company of Carsten Gomard, member of the Board of Directors) (4.4%), NC NorthCo AB (the holding company of Gustaf Löfberg, Country Manager, Denmark) (7.6%), Danica Pension, Livsforsikringsaktieselskab (4.6%) and the MIP Participants and Employee Shareholders (22.3%), in each assuming an Offer Price at the midpoint of the Offer Price Range. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation and will be governed by a shareholders’ agreement. See “Ownership Structure and Selling Shareholders—Agreements related to the Ownership of the Group—Shareholders’ Agreement between André Rogaczewski and Claus Jørgensen”. Gustaf Löfberg, Country Manager, Denmark, has informed the Company that the Shares held indirectly through his holding company, NC NorthCo AB, will be transferred to a Swedish personal pension and life insurance scheme, a Kapitalförsäkring with Danica Pension Försäkringsaktiebolag, Sweden, in connection with Admission. However, the voting rights as well as any rights to decide on disposals of the Shares previously held by NC NorthCo AB, shall remain with Gustaf Löfberg. As of the date hereof, the Company’s share capital amounts to a nominal value of DKK 500,000, divided into 500,000 Shares of DKK 1 each, each of which is fully paid. At the time of completion of the IPO Reorganisation, the Company’s share capital will have a nominal value of DKK 50,000,000, divided into 50,000,000 Shares of DKK 1 each, which will be fully paid up. The Selling Shareholders are offering 20,000,000 Shares. The Significant Shareholders are offering between 8,753,013 and 8,878,762 Offer Shares, excluding any Shares subject to the Overallotment Option and between 11,753,013 and 11,878,762 Offer Shares, including all Shares subject to the Overallotment Option. André Rogaczewski Holding ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Holdingselskabet Claus Jørgensen ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Carsten Gomard Holding ApS is offering between 879,209 and 880,031 Offer Shares, NC NorthCo AB is offering between 1,501,921 and 1,523,498 Offer Shares, Danica Pension, Livsforsikringsaktieselskab is offering between 842,262 and 1,029,431 Offer Shares and the MIP Participants and Employee Shareholders are offering between 4,452,740 and 4,471,735 Offer Shares. Each of the Selling Shareholders will sell a number of Shares pro rata to their relative ownership of the Company, following completion of the IPO Reorganisation, but prior to Admission. The exact number of Shares to be held by each Selling Shareholder, following completion of the IPO Reorganisation, will be determined on the basis of the final Offer Price, as part of the IPO Reorganisation. See “Reorganisation”. ## Table of Shareholders The following tables set out the information regarding the Company’s ownership structure as at the date hereof; at the time of completion of the IPO Reorganisation and prior to Admission and immediately following the completion of the Offering, assuming (i) full exercise of the Overallotment Option and (ii) the sale of 20,000,000 Shares by the Selling Shareholders. The information in the tables on Shares controlled by the Board of Directors, Executive Management and the Key Employee also includes indirect holdings through André --- Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB and other legal entities to the extent relevant and the Shares held by the MIP Participants and Employee Shareholders include Shares held indirectly through NC ShareCo ApS. In case the shareholding percentages do not sum to 100% in the following tables, this is due to rounding. Mid-point of the Offer Price Range | Shareholder | Shares owned after the IPO Reorganisation and before completion of the Offering | | Shares owned after completion of the Offering | | | --- | --- | --- | --- | --- | | | Number of Shares | % | Number of Shares | % | | Significant Shareholders | 22,055,426 | 44.11% | 10,233,252 | 20.47% | | André Rogaczewski Holding ApS(1) | 4,243,478 | 8.49% | 2,546,087 | 5.09% | | Holdingselskabet Claus Jørgensen ApS(2) | 4,243,478 | 8.49% | 2,546,087 | 5.09% | | Carsten Gomard Holding ApS(3) | 2,198,948 | 4.40% | 1,319,369 | 2.64% | | NC NorthCo AB(4) | 3,784,471 | 7.57% | 2,270,683 | 4.54% | | Danica Pension, Livsforsikringsaktieselskab | 2,316,221 | 4.63% | 1,389,733 | 2.78% | | MIP Participants and Employee Shareholders(5) | 11,157,978 | 22.32% | 6,694,789 | 13.39% | | New shareholders | — | — | 23,000,000 | 46.00% | | Total | 50,000,000 | 100% | 50,000,000 | 100% | | Shares held by the Board of Directors, Executive Management and the Key Employee(5) | | | | | | Board of Directors | | | | | | Pekka Ala-Pietilä | 109,714 | 0.22% | 65,829 | 0.13% | | Thomas Broe-Andersen | — | — | — | — | | Pernille Fabricius | 25,144 | 0.05% | 15,087 | 0.03% | | Juha Christensen | 45,324 | 0.09% | 27,195 | 0.05% | | Bo Rygaard | 16,996 | 0.03% | 10,198 | 0.02% | | Carsten Gomard | 2,198,948 | 4.40% | 1,319,369 | 2.64% | | Executive Management(5) | | | | | | André Rogaczewski | 4,243,478 | 8.49% | 2,546,087 | 5.09% | | Claus Jørgensen | 4,243,478 | 8.49% | 2,546,087 | 5.09% | | Thomas Johansen | 18,130 | 0.04% | 10,878 | 0.02% | | The Key Employee(5) | | | | | | Gustaf Löfberg | 3,784,471 | 7.57% | 2,270,683 | 4.54% | | Total, Board of Directors, Executive Management and the Key Employee | 14,685,683 | 29.37% | 8,811,413 | 17.62% | (1) André Rogaczewski Holding ApS is the holding company of André Rogaczewski, CEO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (2) Holdingselskabet Claus Jørgensen ApS is the holding company of Claus Jørgensen, COO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (3) Carsten Gomard Holding ApS is the holding company of Carsten Gomard, member of the Board of Directors. (4) NC NorthCo AB is the holding company of Gustaf Löfberg, Country Manager, Denmark. (5) Includes Shares held by the members of the Board of Directors, the Executive Management or the Key Employee personally or legal entities controlled by them. --- Top end of the Offer Price Range | Shareholder | Shares owned after the IPO Reorganisation and before completion of the Offering | | Shares owned after completion of the Offering | | | --- | --- | --- | --- | --- | | | Number of Shares | % | Number of Shares | % | | Significant Shareholders | 22,196,893 | 44.39% | 10,318,131 | 20.64% | | André Rogaczewski Holding ApS(1) | 4,255,668 | 8.51% | 2,553,401 | 5.11% | | Holdingselskabet Claus Jørgensen ApS(2) | 4,255,668 | 8.51% | 2,553,401 | 5.11% | | Carsten Gomard Holding ApS(3) | 2,198,024 | 4.40% | 1,318,815 | 2.64% | | NC NorthCo AB(4) | 3,808,746 | 7.62% | 2,285,248 | 4.57% | | Danica Pension, Livsforsikringsaktieselskab | 2,105,656 | 4.21% | 1,263,394 | 2.53% | | MIP Participants and Employee Shareholders(5) | 11,179,345 | 22.36% | 6,707,610 | 13.42% | | New shareholders | — | — | 23,000,000 | 46.00% | | Total | 50,000,000 | 100% | 50,000,000 | 100% | | Shares held by the Board of Directors, Executive Management and the Key Employee(5) | | | | | | Board of Directors | | | | | | Pekka Ala-Pietilä | 108,753 | 0.22% | 65,252 | 0.13% | | Thomas Broe-Andersen | — | — | — | — | | Pernille Fabricius | 24,849 | 0.05% | 14,910 | 0.03% | | Juha Christensen | 45,394 | 0.09% | 27,237 | 0.05% | | Bo Rygaard | 17,022 | 0.03% | 10,214 | 0.02% | | Carsten Gomard | 2,198,024 | 4.40% | 1,318,815 | 2.64% | | Executive Management(5) | | | | | | André Rogaczewski | 4,255,668 | 8.51% | 2,553,401 | 5.11% | | Claus Jørgensen | 4,255,668 | 8.51% | 2,553,401 | 5.11% | | Thomas Johansen | 18,158 | 0.04% | 10,895 | 0.02% | | The Key Employee(5) | | | | | | Gustaf Löfberg | 3,808,746 | 7.62% | 2,285,248 | 4.57% | | Total, Board of Directors, Executive Management and the Key Employee | 14,732,282 | 29.46% | 8,839,373 | 17.68% | (1) André Rogaczewski Holding ApS is the holding company of André Rogaczewski, CEO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (2) Holdingselskabet Claus Jørgensen ApS is the holding company of Claus Jørgensen, COO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (3) Carsten Gomard Holding ApS is the holding company of Carsten Gomard, member of the Board of Directors. (4) NC NorthCo AB is the holding company of Gustaf Löfberg, Country Manager, Denmark. (5) Includes Shares held by the members of the Board of Directors, the Executive Management or the Key Employee personally or legal entities controlled by them. 200 --- Bottom end of the Offer Price Range | Shareholder | Shares owned after the IPO Reorganisation and before completion of the Offering | | Shares owned after completion of the Offering | | | --- | --- | --- | --- | --- | | | Number of Shares | % | Number of Shares | % | | Significant Shareholders | 21,882,524 | 43.77% | 10,129,511 | 20.26% | | André Rogaczewski Holding ApS(1) | 4,228,580 | 8.46% | 2,537,148 | 5.07% | | Holdingselskabet Claus Jørgensen ApS(2) | 4,228,580 | 8.46% | 2,537,148 | 5.07% | | Carsten Gomard Holding ApS(3) | 2,200,078 | 4.40% | 1,320,047 | 2.64% | | NC NorthCo AB(4) | 3,754,803 | 7.51% | 2,252,882 | 4.51% | | Danica Pension, Livsforsikringsaktieselskab | 2,573,579 | 5.15% | 1,544,148 | 3.09% | | MIP Participants and Employee Shareholders(5) | 11,131,856 | 22.26% | 6,679,116 | 13.36% | | New shareholders | — | — | 23,000,000 | 46.00% | | Total | 50,000,000 | 100% | 50,000,000 | 100% | | Shares held by the Board of Directors, Executive Management and the Key Employee(5) | | | | | | Board of Directors | | | | | | Pekka Ala-Pietilä | 110,888 | 0.22% | 66,533 | 0.13% | | Thomas Broe-Andersen | — | — | — | — | | Pernille Fabricius | 25,505 | 0.05% | 15,303 | 0.03% | | Juha Christensen | 45,239 | 0.09% | 27,144 | 0.05% | | Bo Rygaard | 16,964 | 0.03% | 10,179 | 0.02% | | Carsten Gomard | 2,200,078 | 4.40% | 1,320,047 | 2.64% | | Executive Management(5) | | | | | | André Rogaczewski | 4,228,580 | 8.46% | 2,537,148 | 5.07% | | Claus Jørgensen | 4,228,580 | 8.46% | 2,537,148 | 5.07% | | Thomas Johansen | 18,096 | 0.04% | 10,858 | 0.02% | | The Key Employee(5) | | | | | | Gustaf Löfberg | 3,754,803 | 7.51% | 2,252,882 | 4.51% | | Total, Board of Directors, Executive Management and the Key Employee | 14,628,733 | 29.26% | 8,777,242 | 17.55% | (1) André Rogaczewski Holding ApS is the holding company of André Rogaczewski, CEO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (2) Holdingselskabet Claus Jørgensen ApS is the holding company of Claus Jørgensen, COO. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. (3) Carsten Gomard Holding ApS is the holding company of Carsten Gomard, member of the Board of Directors. (4) NC NorthCo AB is the holding company of Gustaf Löfberg, Country Manager, Denmark. (5) Includes Shares held by the members of the Board of Directors, the Executive Management or the Key Employee personally or legal entities controlled by them. The Company is not aware of being owned or controlled, directly or indirectly, by others, and the Company is not aware of any agreement that could later result in others taking control over it other than the agreements entered into in connection with the IPO Reorganisation, see "Reorganisation" and "Agreements related to the Ownership of the Group". ## The Selling Shareholders ### Significant Shareholders The Significant Shareholders comprise FSN Capital IV L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP, which are limited partnerships organised under the laws of Jersey and FSN Capital IV (B) L.P. organised under the laws of England, each with registered office at 11-15 Seaton Place, St Helier, Jersey, JE4 0QH. FSN Capital IV Netcompany Co-Investment LP is a direct co-investment vehicle for --- certain of the investors in FSN fund IV. FSN Capital GP IV Limited is acting as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. The Significant Shareholders will, following the IPO Reorganisation and prior to the completion of the Offering, own 44.1% of the Company's share capital and voting rights assuming an Offer Price at the midpoint of the Offer Price Range. Upon the completion of the Offering, the Significant Shareholders will own 10,233,252 Shares, corresponding to 20.5% of the Company's share capital and voting rights, assuming full exercise of the Overallotment Option, and 13,233,252 Shares, corresponding to 26.5% of the Company's share capital and voting rights, assuming no exercise of the Overallotment Option, in each case assuming an Offer Price at the midpoint of the Offer Price Range. The Significant Shareholders will not have special rights pursuant to the Articles of Association. ## FSN Capital Partners Founded in 1999, FSN Capital Partners is a leading Northern European private equity investment group. The group has advised FSN Capital branded funds in more than 70 private equity transactions in the Nordic region and, as of December 2017 the FSN Capital branded funds advised by FSN Capital Partners have more than €2.1 billion in assets under management. With offices in Denmark, Germany, Norway and Sweden, FSN Capital Partners has established a team of approximately 27 investment professionals with a broad range of industrial and financial experience across the Northern European region. FSN Capital Partners focuses on middle-market control investments in Nordic companies helping the portfolio companies owned by the FSN Capital branded funds advised by FSN Capital Partners release the potential for transformation into more competitive, international and profitable companies. ## MIP Participants and Employee Shareholders The MIP Participants and Employee Shareholders comprise a group of 81 individuals as at the date hereof, including four members of the Board of Directors, a member of the Executive Management, some of the previous owners of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018), and certain other employees, having invested in the Group, including through the MIP. The MIP Participants and Employee Shareholders have invested in the Group, directly through NC TopCo A/S (the parent company of the Group, prior to the completion of the IPO Reorganisation) and indirectly through NC ShareCo ApS (a direct shareholder in NC TopCo A/S, prior to the completion of the IPO Reorganisation). See "Board of Directors, Executive Management and Key Employees—Incentive Programmes—MIP" and "Reorganisation" for a description of the MIP and the transactions contemplated in connection with the roll-up of the MIP in connection with the IPO Reorganisation. The MIP Participants and Employee Shareholders will, following the IPO Reorganisation and prior to the completion of the Offering, own 22.3% of the Company's share capital and voting rights assuming an Offer Price at the midpoint of the Offer Price Range. Upon the completion of the Offering, the MIP Participants and Employee Shareholders will own 6,694,789 Shares, corresponding to 13.4% of the Company's share capital and voting rights, assuming an Offer Price at the midpoint of the Offer Price Range. NC ShareCo ApS is a private limited company organised under the laws of Denmark under registration (CVR) no. 37415189. The registered office of NC ShareCo ApS is Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. It is the expectation that NC ShareCo ApS will be dissolved by demerger into individual holding companies prior to Admission, and as a consequence hereof, that the Shares held by the ultimate owners, through NC ShareCo ApS, will be held through such individual holding companies following Admission. ## Agreements Related to the Ownership of the Group ## Reorganisation Agreements See "Reorganisation" for a description of the Reorganisation Agreements entered into between the Company and certain entities of the current Group as well as the shareholders of the Company and these Group entities which sets out the terms and conditions for the IPO Reorganisation to be carried out prior to Admission. 202 --- 203 # Pre-IPO Shareholders' Agreements In connection with the Significant Shareholders' acquisition of a majority stake in the Group in 2016 and in connection with the Group's acquisition of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter MacDonald Ltd (renamed to Netcompany UK Ltd in January 2018), a number of shareholders' agreements were concluded amongst the shareholders of the Group regarding their investment in and orderly governance of the Group. These shareholders' agreements, other than certain customary terms inter alia in respect of confidentiality, will in accordance with their terms cease to have effect upon completion of the Offering. Certain of the MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders' material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders' employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be held by the MIP Participants and Employee Shareholders comprised by this undertaking. # Shareholders' agreement between André Rogaczewski and Claus Jørgensen The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation. André Rogaczewski and Claus Jørgensen have informed the Company that they expect to enter into a shareholders' agreement governing their relations as shareholders in the joint holding company and that the shareholders' agreement will provide that any material decisions by the joint holding company with respect to the Shares, including voting on the Shares and disposals of or creation of other third party rights over the Shares shall be subject to the unanimous decision by André Rogaczewski and Claus Jørgensen. If no unanimous decision can be reached, the shareholders' agreement provides for an informal dispute resolution panel, which shall have the power to decide on the disputed matter, with binding effects on the parties and no rights of appeal. The Company is not a party to the shareholders' agreement and does not have any rights and/or obligations under it. --- 204 # RELATED PARTY TRANSACTIONS The Company was incorporated on 16 April 2018. The Significant Shareholders and the other Existing Group Shareholders will exchange all shares in NC TopCo A/S (including Matching Shares) for new Shares in the Company via a share-for-share exchange. See “Reorganisation” for further details. Accordingly, the Company has not entered into any related party transactions prior to its establishment. The Significant Shareholders, the Board of Directors and the Executive Management are considered related parties of the Company and the Group as they exercise a significant influence on the Company’s and the Group’s operations. Related parties also include such persons’ relatives as well as undertakings in which such persons have significant interests. In addition, companies controlled by the Significant Shareholders are considered related parties. During the periods covered by the historical financial information included in this Offering Circular, the Company and the Group have not undertaken any significant transactions with the Significant Shareholders and the Board of Directors or Executive Management, or with undertakings outside the Group, in which related parties have significant interests, except for: - Remuneration paid to the Board of Directors and the Executive Management as discussed in the section “Board of Directors, Executive Management and Key Employees”, see subsections “Compensation of the Board of Directors” and “Compensation of the Executive Management”. - In the ordinary course of business, the Group has earned revenue from projects delivered to customers controlled by the Significant Shareholders. The revenue derived from such projects constituted respectively DKK 2.5 million in the three months ended 31 March 2018, DKK 2.8 million in the year ended 31 December 2017, DKK 0.7 million in the year ended 31 December 2016 and DKK 0 in the year ended 31 December 2015. - Until 31 January 2016, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) had certain transactions with its past shareholder and the ultimate owners being a group of persons who today are members of the Executive Management, one person is a member of the Board of Directors and one is the Key Employee. This involved: - Transfer of surplus cash to its past shareholder on a regular basis as part of the financing structure under the previous ownership. The receivable balances created by the transfer of cash were then afterwards settled through distribution of dividends. Under this financing set-up, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) settled receivable balances with its past shareholder by declaring dividends of DKK 100 million in 2015 and DKK 116.4 million in January 2016, and - Furthermore, until 31 January 2016, Netcompany A/S (renamed to Netcompany Holding I A/S in February 2018) and Netcompany IT and Business Consulting A/S (renamed to Netcompany A/S in February 2018) were both members of a Danish joint taxation group with a tax administration company owned by a group of persons who today are members of the Executive Management, one person is a member of the Board of Directors and one is the Key Employee. The joint taxation ceased on 31 January 2016. All receivables and payables resulting from the past joint taxation scheme were settled in connection with the Significant Shareholders acquiring the majority stake in the Group on 1 February 2016. - Certain of the MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders’ material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders’ employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be by the MIP Participants and Employee Shareholders comprised by this undertaking. --- 205 # DESCRIPTION OF THE SHARES AND SHARE CAPITAL The following is a summary of material information relating to the Company's share capital, including a summary of certain provisions of the Articles of Association dated 22 May 2018, as well as a brief description of certain provisions of the Danish Companies Act. This summary does not purport to be exhaustive and should be read in conjunction with the full text of the Articles of Association as well as in the context of applicable Danish law. See “Annex A—Articles of Association of the Company”. The Company is a public limited liability company incorporated on 16 April 2018 and is organised under the laws of Denmark under the name Netcompany Group A/S with its registered office at Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. The Company is registered with the Danish Business Authority under company registration (CVR) no. 39 48 89 14. ## Registered Share Capital As of the date of this Offering Circular, the Company's share capital has a nominal value of DKK 500,000, divided into 500,000 Shares of DKK 1 each or multiples thereof. All Shares are issued and fully paid up. The Shares are not divided into share classes, and all Shares have the same rights and rank pari passu in respect of voting rights, preemption rights, redemption, conversion and restrictions or limitations according to the Articles of Associations or eligibility to receive dividend or proceeds in the event of dissolution and liquidation. No Shares shall carry special rights, restrictions or limitations pursuant to the Articles of Association. Each Share of the nominal value DKK 1 gives the holder the right to one vote at the Company's general meetings. The Company has not issued any securities that are convertible, exchangeable nor have warrants attached, other than in connection with the IPO Reorganisation. At the time of completion of the IPO Reorganisation, the Company's share capital will have a nominal value of DKK 50,000,000, divided into 50,000,000 Shares of DKK 1 each or multiples thereof, which will all be issued and fully paid up. See "Reorganisation" for a description of the IPO Reorganisation. ## Movement in the Share Capital The table set forth below presents the development of the Company's share capital from its incorporation to the date of this Offering Circular as well as in connection with the transactions to be carried out in connection with the IPO Reorganisation. | Date of approval | Transaction type | Share capital before change (DKK) | Share capital change (DKK) | Share capital after change (DKK) | Price (DKK)(1) | Number of Shares after change | | --- | --- | --- | --- | --- | --- | --- | | 16 April 2018 | Incorporation of the Company as a public limited company | — | 500,000 | 500,000 | 100.00 | 500,000 | | IPO Reorganisation transactions | | | | | | | | Date of Admission | Capital decrease(2) | 500,000 | (500,000) | 0 | 100.00 | 0 | | Date of Admission | Capital increase(3) | 0 | 50,000,000 | 50,000,000 | Offer Price | 50,000,000 | (1) Calculated in accordance with the practice of the Danish Business Authority whereby payment of an amount equivalent to the nominal value of a Share is set at index price 100. (2) Capital decrease to be carried out immediately prior to the share-for-share exchange with the Existing Group Shareholders to ensure Existing Group Shareholders' respective ownership stakes in the Company correspond to their current ownership stakes of NC TopCo A/S. (3) Capital increase to be carried out in connection with a share-for-share exchange with the Existing Group Shareholders. The price, as calculated in accordance the practice of the Danish Business Authority, will be determined on the basis of the final Offer Price. ## Authorisation to Increase the Share Capital The Board of Directors has pursuant to the Articles of Association been granted authorisation to increase the Company's share capital. In accordance with article 5.1 of the Articles of Association, the Board of Directors is, until 21 May 2023, authorised to increase the share capital of the Company in one or more issues without preemption rights for the --- existing shareholders of the Company by up to a nominal amount of of DKK 10,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 20% of the outstanding share capital at the time of exercise of the authorisation. The capital increase shall take place at market price and may be effected by cash payment, conversion of debt or by contribution of other assets than cash. Additionally, in accordance with article 5.2 of the Articles of Association, the Board of Directors is, until 21 May 2023, authorised to increase the Company's share capital in one or more issues with preemption rights for the existing shareholders of the Company by up to a nominal amount of DKK 5,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 10% of the outstanding share capital at the time of exercise of the authorisation. The capital increase will take place at a subscription price to be determined by the Board of Directors, which may be below the market price. The capital increase shall be effected by cash payment. Shares issued pursuant to the Board of Directors' authorisations shall be fully paid up, shall be issued in the name of the holder, shall be recorded in the holder's name in the Company's register of shareholders, shall be negotiable instruments and shall in every respect carry the same rights as the existing Shares. The Board of Directors is authorised to lay down the terms and conditions for capital increases pursuant to the above authorisations. The Board of Directors is also authorised to amend the Articles of Association as required in connection with the utilisation of the above authorisations. ## Authorisation to Acquire Treasury Shares The Board of Directors is authorised in the period until 21 May 2023 to approve the acquisition of treasury shares, on one or more occasions, with a total nominal value of up to 10% of the share capital of the Company, subject to the Company's holding of treasury shares after such acquisition does not exceed 10% of the Company's share capital. The consideration may not deviate more than 10% from the official price quoted on Nasdaq Copenhagen at the time of acquisition. The authorisation to acquire treasury shares cannot be exercised until the Company's annual report for the financial year ending 31 December 2018 has been approved at the Company's annual general meeting. The Company does not hold any treasury shares as of the date of this Offering Circular. ## Authorisation to Distribute Interim Dividend As of the date of this Offering Circular, the Board of Directors has been authorised by the Company's general meeting to distribute interim dividends but currently has no plan to do so in 2018 or 2019. For further details on dividends and the Company's dividend policy, see "Dividends and Dividend Policy". ## General Meetings and Voting Rights The Company's general meetings shall be held in Greater Copenhagen. The Company's annual general meeting shall be held each year in due time for the audited and approved annual report to be received by the relevant authorities before the applicable statutory time limit. Not later than eight weeks before the contemplated date of the annual general meeting, the Company shall publish the date of the general meeting and the deadline for submitting requests for specific proposals to be included on the agenda. Extraordinary general meetings shall be held when determined by the Board of Directors or requested by the Company's auditor. Furthermore, the Board of Directors shall convene an extraordinary general meeting within two weeks of receipt of a written request from shareholders representing no less than 5% of the share capital containing specific proposals for the business to be transacted at such extraordinary general meeting. General meetings shall be convened by the Board of Directors with at least three weeks' and not more than five weeks' notice. The notice shall be published on the Company's website. Furthermore, a notice of the general meeting shall be sent electronically to all shareholders recorded in the Company's register of shareholders who have requested such notice. In accordance with Danish law, the notice shall specify the time and place of the general meeting and the agenda containing the business to be transacted at the general meeting. If a proposal to amend the Articles of Association is to be considered at the general meeting, the main contents of the proposal shall be specified in the notice. 206 --- The Company’s general meetings shall be held in English. The Board of Directors may decide to offer simultaneous interpretation into Danish. Documents prepared in connection with or following a general meeting shall be in English and, to the extent required by law, in Danish. Annual reports and any interim reports shall be prepared in English. The Board of Directors may resolve to supplement the annual report and interim reports with a Danish translation or a summary in Danish. Every shareholder is entitled to have specific business transacted at the general meeting, provided that the shareholder submits a written request to that effect to the Board of Directors not later than six weeks before the date of the general meeting. The right of a shareholder to attend a general meeting and to vote is determined by the Shares held by the shareholder at the record date. The record date is one week before the general meeting. The Shares held by each shareholder are determined at the record date based on the number of Shares held by that shareholder as registered in the Company’s register of shareholders and any notification of ownership received by the Company for the purpose of registration in its register of shareholders, but which have not yet been registered. At the general meeting, each Share of the nominal value of DKK 1 shall carry one vote. A shareholder who is entitled to attend the general meeting pursuant to the Articles of Association and who wants to attend the general meeting shall request an admission card no later than three days prior to the date of the general meeting. A shareholder may, subject to having requested an admission card in accordance with the Articles of Association, attend in person or by proxy, and the shareholder or the proxy may attend together with an adviser. The right to vote may be exercised by a written and dated instrument of proxy in accordance with applicable laws. The Board of Directors of the Company may be appointed as proxy. A shareholder who is entitled to participate in the general meeting according to the Articles of Associations may vote by postal vote in accordance with the Danish Companies Act. Such postal votes shall be received by the Company not later than the day before the general meeting. Postal votes cannot be withdrawn. ## Resolutions by the General Meetings and Amendments to the Articles of Association Resolutions at general meetings shall be passed by a simple majority of votes cast, unless otherwise prescribed by law or by the Articles of Association. Adoption of changes to the Articles of Association, dissolution of the Company, merger or demerger requires that the resolution is adopted by at least 2/3 of the votes cast as well as the share capital represented at the general meeting, unless applicable laws prescribe stricter or less strict adoption requirements or applicable laws confer specific authority to the Board of Directors or other bodies. The provisions in the Articles of Association relating to a change of the rights of shareholders or a change to the capital are not more stringent than required by the Danish Companies Act. ## Registration of Shares The Shares will be delivered in book-entry form through allocation to accounts with VP Securities through a Danish bank or other institution authorised as custodian. The Shares are issued in dematerialised form through VP Securities. The address of VP Securities is VP SECURITIES A/S, Weidekampsgade 14, P.O. Box 4040, DK-2300 Copenhagen S, Denmark. The Shares shall be fully paid up, issued in the name of the holder and recorded in the holder’s name, in the Company’s register of shareholders through the holder’s custodian bank. The Company’s register of shareholders is kept by Computershare A/S, registration (CVR) no. 27 08 88 99. ## Transfer of Shares The Shares are negotiable instruments, and no restrictions under Danish law apply to the transferability of the Shares. See “Selling Restrictions” and “Transfer Restrictions” for certain restrictions applicable to the Offer Shares. 207 --- 208 # Preemption Rights Under Danish law, the Company’s shareholders generally have preemption rights if the general meeting of the Company resolves to increase the share capital by cash payment. However, the preemption rights of the shareholders may be derogated by a majority comprising at least 2/3 of the votes cast and of the share capital represented at the general meeting if the share capital increase is made at market price. The Board of Directors is authorised to increase the Company’s share capital in one or more issues at market price without preemption rights to the Company’s shareholders. See “—Authorisation to Increase the Share Capital”. The exercise of preemption rights may be restricted for shareholders resident in certain jurisdictions, including but not limited to the United States, Canada, Japan and Australia, unless the Company decides to comply with applicable local requirements. Consequently, U.S. holders and certain other holders of Shares may not be able to exercise their preemption rights or participate in a rights offer, as the case may be, unless a registration statement under the U.S. Securities Act is effective with respect to such rights or an exemption from the registration requirements is available. The Company intends to evaluate at the time of any issue of Shares subject to preemption rights or in a rights offer, as the case may be, the cost and potential liabilities associated with complying with any local requirements, including any registration statement in the U.S., as well as the indirect benefits to the Company of enabling the exercise of non-Danish shareholders of their preemption rights to Shares or participation in any rights offer, as the case may be, and any other factors considered appropriate at the time, and then to make a decision as to whether to comply with any local requirements, including filing any registration statement in the U.S. No assurances are given that local requirements will be complied with or that any registration statement would be filed in the U.S. so as to enable the exercise of such holders’ preemption rights or participation in any rights offer. # Redemption and Conversion Provisions Except as provided for in the Danish Companies Act, see “The Danish Securities Market—Mandatory Redemption of Shares”, no shareholder is under an obligation to have his Shares redeemed in whole or in part by the Company or by any third party, and none of the Shares carry any redemption or conversion rights or any other special rights. # Dissolution and Liquidation In the event of dissolution and liquidation, the Company’s shareholders are entitled to participate in the distribution of assets in proportion to their nominal shareholdings after payment of the Company’s creditors. # Indication of Takeover Bids No takeover offers have been made by any third party in respect of the Shares and during the past or the current financial year no takeover offers have been made by any third party in respect of the shares issued in NC TopCo A/S except for the transaction contemplated to be carried out in connection with the IPO Reorganisation. The Articles of Association do not contain provisions that are likely to have the effect of delaying, deferring or preventing a change in control of the Company. Consistent with the Corporate Governance Recommendations, the Board of Directors has adopted a set of guidelines for the handling of takeover bids. # Disclosure of Information The Board of Directors has adopted a set of internal rules aiming, inter alia, to ensure that the disclosure of information complies with the applicable stock exchange regulations and rules applicable to the Company’s securities listed on regulated markets. All company announcements are published via Nasdaq Copenhagen and can subsequently be accessed from the Company’s website. All company announcements will be published in English and, if decided by the Board of Directors, in Danish. The annual report and any interim reports will be prepared in English. The Board of Directors may resolve to supplement the annual report and interim reports with a Danish translation or a summary in Danish. Investor presentations and telephone conferences are expected to be held following the publication of each interim and annual report to provide participants the opportunity to ask questions to the Executive Management. Audiocasts of such presentations will subsequently be available on the Company’s website. Investors may also contact the Company’s investor relations department to obtain additional information subject to any restrictions under applicable law. --- TAXATION ## Danish Tax Considerations The following is a summary of certain Danish income tax considerations relating to an investment in the Shares. The summary is for general information only and does not purport to constitute exhaustive tax or legal advice. It is specifically noted that the summary does not address all possible tax consequences relating to an investment in the Shares. The summary is based solely upon the tax laws of Denmark in effect on the date of this Offering Circular. Danish tax laws may be subject to change, possibly with retroactive effect. The summary does not cover investors to whom special tax rules apply and, therefore, may not be relevant, for example, to investors subject to the Danish Pension Investment Return Tax Act (i.e. pension savings), professional investors, certain institutional investors, insurance companies, pension companies, banks, stockbrokers and investors with tax liability on return on pension investments. The summary does not cover taxation of individuals and companies who carry on a business of purchasing and selling shares. The summary only sets out the tax position of the direct owners of the Shares and further assumes that the direct investors are the beneficial owners of the Shares and any dividends thereon. Sales are assumed to be sales to a third party. Potential investors in the Shares are advised to consult their tax advisers regarding the applicable tax consequences of acquiring, holding and disposing of the Shares based on their particular circumstances. Investors who may be affected by the tax laws of other jurisdictions should consult their tax advisers with respect to the tax consequences applicable to their particular circumstances, as such consequences may differ significantly from those described herein. ## Taxation of Danish tax resident shareholders ### Sales of shares—individuals Gains from the sale of shares are taxed as share income at a rate of 27% on the first DKK 52,900 in 2018 (for cohabiting spouses, a total of DKK 105,800) and at a rate of 42% on share income exceeding DKK 52,900 (for cohabiting spouses over DKK 105,800). Such amounts are subject to annual adjustments and include all share income (i.e. all capital gains and dividends derived by the individual or cohabiting spouses, respectively). Gains and losses on the sale of shares admitted to trading on a regulated market are calculated as the difference between the purchase price and the sales price. The purchase price is generally determined using the so-called average method which means that each share is considered acquired at a price equivalent to the average acquisition price of all the shareholder's shares in the issuing company. Losses on the sale of shares admitted to trading on a regulated market can only be offset against other share income deriving from shares admitted to trading on a regulated market (i.e. received dividends and capital gains on the sale of shares admitted to trading on a regulated market). Unused losses will be offset against a cohabiting spouse's share income deriving from shares admitted to trading on a regulated market. Any remaining losses after the above deduction can be carried forward indefinitely and offset against future share income deriving from shares admitted to trading on a regulated market. Losses on shares admitted to trading on a regulated market may only be set off against gains and dividends on other shares admitted to trading on a regulated market as outlined above if the Danish tax authorities have received certain information concerning the ownership of the shares before expiry of the tax return filing deadline for the income year in which the shares were acquired. This information is normally provided to the Danish tax authorities by the securities dealer. ### Sale of shares—companies Tax on the sale of shares by companies is subject to different regimes depending on whether the shares are considered as Subsidiary Shares, Group Shares, Tax-Exempt Portfolio Shares or Taxable Portfolio Shares defined as follows: "Subsidiary Shares" are generally defined as shares owned by a company shareholder holding at least 10% of the nominal share capital of the issuing company. 209 --- "Group Shares" are generally defined as shares in a company in which the company shareholder of the company and the issuing company are subject to Danish joint taxation or fulfil the requirements for international joint taxation under Danish law. "Tax-Exempt Portfolio Shares" are generally defined as shares not admitted to trading on a regulated market owned by a company shareholder holding less than 10% of the nominal share capital in the issuing company. Tax-Exempt Portfolio Shares are not relevant in respect of this Offering and will not be described in further detail. "Taxable Portfolio Shares" are shares that do not qualify as Subsidiary Shares, Group Shares or Tax-Exempt Portfolio Shares. Gains or losses on disposals of Subsidiary Shares, Group Shares and Tax-Exempt Portfolio Shares are not included in the taxable income of the company shareholder. Special rules apply with respect to Subsidiary Shares and Group Shares in order to prevent avoidance of the 10% ownership requirement through pooling of shareholdings in a holding company just as other anti-avoidance rules may apply. These rules will not be described in further detail. Capital gains from the sale of Taxable Portfolio Shares are taxable at the corporate income tax rate of 22% in 2018. Losses on such shares are generally deductible. Gains and losses on Taxable Portfolio Shares are, as a general rule, calculated in accordance with the mark-to-market principle. According to the mark-to-market principle, each year's taxable gain or loss is calculated as the difference between the market value of the shares at the beginning and end of the tax year. Thus, taxation will take place on an accrual basis even if no shares have been disposed of and no gains or losses have been realised. If the Taxable Portfolio Shares are sold or otherwise disposed of before the end of the income year, the taxable income of that income year equals the difference between the value of the Taxable Portfolio Shares at the beginning of the income year and the value of the Taxable Portfolio Shares at realisation. If the Taxable Portfolio Shares have been acquired and realised in the same income year, the taxable income equals the difference between the acquisition sum and the realisation sum. If the Taxable Portfolio Shares are acquired in the income year and not realised in the same income year, the taxable income equals the difference between the acquisition sum and the value of the Shares at the end of the income year. A change of status from Subsidiary Shares/Group Shares/Tax-Exempt Portfolio Shares to Taxable Portfolio Shares (or vice versa) is for tax purposes deemed to be a disposal of the shares and a reacquisition of the shares at market value at the time of change of status. ## Dividends—individuals Dividends received by individuals who are tax residents of Denmark are taxed as share income. Share income is taxed at a rate of 27% on the first DKK 52,900 in 2018 (for cohabiting spouses, a total of DKK 105,800) and at a rate of 42% on share income exceeding DKK 52,900 (for cohabiting spouses over DKK 105,800). Such amounts are subject to annual adjustments and include all share income (i.e. all capital gains and dividends derived by the individual or cohabiting spouses, respectively). Dividends paid to individuals are generally subject to 27% withholding tax. ## Dividends—companies Dividends received on Taxable Portfolio Shares are subject to the standard corporate tax rate of 22% irrespective of ownership period. The withholding tax rate is 22%. If the distributing company withholds a higher amount, the shareholder can claim a refund of the excess tax. A claim for repayment must be filed within two months; otherwise the excess tax will instead be credited in the corporate income tax for the year. Dividends received on Subsidiary Shares and Group Shares will not be subject to taxation irrespective of ownership period. The dividends will, however, be subject to certain anti-avoidance rules that will not be described in further detail. 210 --- 211 # Taxation of shareholders residing outside Denmark ## Sales of shares—individuals and companies Shareholders not resident in Denmark will normally not be subject to Danish taxation on any gains realised on the sale of shares, irrespective of the ownership period. Where a non-resident of Denmark holds Taxable Portfolio Shares which can be attributed to a permanent establishment in Denmark, such gains are taxable pursuant to the rules applicable to Danish tax residents as described above. ## Dividends—individuals Under Danish law, dividends paid in respect of shares are generally subject to Danish withholding tax at a rate of 27%. A request for a refund of Danish withholding tax can, however, be made by the shareholder in the following situations: ### 1) Double Taxation Treaty In the event that the dividend receiving individual is a resident of a state having a double taxation treaty with Denmark, the shareholder may claim a refund of the tax amount exceeding the treaty rate from the Danish tax authorities, through certain application procedures. Denmark has executed double taxation treaties with approximately 75 countries, including the United States and almost all members of the EU. The double taxation treaties generally provide for a 15% withholding tax rate. The refund is sought electronically and an online claim form is to be used. When claiming a refund the shareholder must document the following; that Danish dividend has been received by the shareholder and the amount of this dividend, that Danish dividend tax has been withheld and the actual amount withheld, that the shareholder was the beneficial owner of the shares when the dividend distribution was approved, that the shareholder is liable to pay tax in a country that is not Denmark and that the withheld dividend tax exceeds that of the final tax payable according to the double taxation treaty or that the withheld dividend tax exceeds the final tax payable according to current Danish law. The documentation requirements follows from the website of the Danish tax authorities. According to these requirements it will be necessary to provide a certification by the applicable local tax authority. With respect to U.S. persons, a properly completed IRS Form 6166 should satisfy this requirement. ### 2) Credit under Danish tax law In addition, if the shareholder holds less than 10% of the nominal share capital of the company and the shareholder is a tax resident in a state which has a double taxation treaty or an international agreement, convention or other administrative agreement on assistance in tax matters according to which the competent authority in the state of the shareholder is obliged to exchange information with Denmark, dividends are subject to tax at a reduced rate of 15%. If the shareholder is a tax resident outside the EU, it is an additional requirement for eligibility for the 15% tax rate that the shareholder together with related shareholders holds less than 10% of the nominal share capital of the company. Note that the reduced tax rate does not affect the withholding rate. Thus, the shareholder must also in this situation claim a refund as described above in order to benefit from the reduced rate. Where a non-resident of Denmark holds shares which can be attributed to a permanent establishment in Denmark, dividends are taxable pursuant to the rules applicable to Danish tax residents described above. See "Taxation of Danish tax resident shareholders". ## Dividends—companies Dividends received on Subsidiary Shares are exempt from Danish withholding tax provided the taxation of the dividends is to be waived or reduced in accordance with the Parent Subsidiary Directive (2011/96/EU as amended by 2015/121/EU) or in accordance with a tax treaty with the jurisdiction in which the company investor is resident. Dividends from Group Shares are exempt from Danish withholding tax provided the company investor is a resident of the EU or the EEA and the taxation of dividends should have been waived or reduced in accordance with the Parent Subsidiary Directive (2011/96/EU as amended by 2015/121/EU) or in accordance with a tax treaty with the country in which the company investor is resident had the shares been Subsidiary Shares. --- Dividend payments on Taxable Portfolio Shares are subject to Danish withholding tax at a rate of 27% irrespective of ownership period. The aforesaid tax exemption for dividends on Subsidiary Shares and Group Shares is subject to Danish anti-avoidance rules. A request for a refund of Danish withholding tax can be made by the shareholder in the following situations: 1) All foreign corporate shareholders Subject to applicable anti-avoidance rules, all foreign corporate shareholders can claim a refund from the Danish tax authorities of the tax amount exceeding 22%. 2) Double Taxation Treaty In the event that the dividend receiving company is a resident of a state with which Denmark has entered into a double taxation treaty, the shareholder may claim a refund from the Danish tax authorities of the tax amount exceeding the treaty rate, through certain certification procedures. Denmark has executed double taxation treaties with approximately 75 countries, including the United States and almost all members of the EU. The double taxation treaties generally provide for a 15% withholding tax rate. The refund is sought electronically and an online claim form is to be used. When claiming a refund the shareholder must document the following; that Danish dividend has been received by the shareholder and the amount of this dividend, that Danish dividend tax has been withheld and the actual amount withheld, that the shareholder was the beneficial owner of the shares when the dividend distribution was approved, that the shareholder is liable to pay tax in a country that is not Denmark and that the withheld dividend tax exceeds that of the final tax payable according to the double taxation treaty or that the withheld dividend tax exceeds the final tax payable according to current Danish law. The documentation requirements follows from the website of the Danish tax authorities. According to these requirements it will be necessary to provide a certification by the applicable local tax authority. With respect to U.S. entities, a properly completed IRS Form 6166 should satisfy this requirement. 3) Credit under Danish tax law In addition, if the shareholder holds less than 10% of the nominal share capital of the company and the shareholder is a tax resident in a jurisdiction which has a double taxation treaty or an international agreement, convention or other administrative agreement on assistance in tax matters according to which the competent authority in the state of the shareholder is obliged to exchange information with Denmark, dividends are generally subject to tax at a reduced rate of 15%. If the shareholder is a tax resident outside the EU, it is an additional requirement for eligibility for the 15% tax rate that the shareholder together with related shareholders holds less than 10% of the nominal share capital of the company. Note that the reduced tax rate does not affect the withholding rate. Thus, the shareholder must also in this situation claim a refund as described above in order to benefit from the reduced rate. Where a non-resident of Denmark holds shares which can be attributed to a permanent establishment in Denmark, dividends are taxable pursuant to the rules applicable to Danish tax residents described above, see "Taxation of Danish tax resident shareholders". Share transfer tax and stamp duties No Danish share transfer tax or stamp duties are payable on transfer of the shares. Withholding tax obligations An issuer of shares is subject to Danish withholding tax obligations in accordance with applicable Danish laws. Certain United States Federal Income Tax Considerations The following is a description of certain U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of Shares, but it does not purport to be a comprehensive description of 212 --- all of the tax considerations that may be relevant to a particular person's decision to acquire Shares. This discussion applies only to a U.S. Holder that acquires Shares in this offering and holds them as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of the U.S. Holder's particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), known as the Medicare contribution tax and tax consequences applicable to U.S. Holders subject to special rules, such as: - certain financial institutions; - dealers or certain traders in securities; - persons holding Shares as part of a straddle, conversion transaction or similar transactions; - persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; - partnerships or other entities classified as partnerships for U.S. federal income tax purposes; - tax-exempt entities; - persons that own or are deemed to own 10% or more of the Company's stock by vote or value; or - persons holding Shares in connection with a trade or business conducted outside of the United States. If an entity that is classified as a partnership for U.S. federal income tax purposes owns Shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships owning Shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of the Shares. This discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations, and the income tax treaty between Denmark and the United States (the "Treaty"), all as of the date hereof, any of which is subject to change, possibly with retroactive effect. A "U.S. Holder" is a person that, for U.S. federal income tax purposes, is a beneficial owner of Shares, is eligible for the benefits of the Treaty and is: - an individual who is a citizen or resident of the United States; - a corporation, or other entity taxable as a corporation, created or organised in or under the laws of the United States, any state therein or the District of Columbia; or - an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of Shares in their particular circumstances. Except as described below, this discussion assumes that the Company is not, and will not become, a "passive foreign investment company" ("PFIC"). ## Certain reporting obligations If a U.S. Holder purchases Shares in this offering for a price in excess of US$100,000 (or the equivalent in foreign currency), the U.S. Holder must file Internal Revenue Service Form 926 for the U.S. Holder's taxable year in which the purchase occurs. Failure by a U.S. Holder to timely comply with such reporting requirements may result in substantial penalties. ## Taxation of Distributions Distributions paid on Shares, other than certain pro rata distributions of ordinary shares, will be treated as dividends to the extent paid out of the Company's current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because the Company does not maintain calculations of its earnings and profits under U.S. federal income tax principles, it is expected that any distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be taxable at a rate lower than the rates applicable to ordinary income. Non-corporate U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their particular circumstances. 213 --- The amount of a dividend will include any amounts withheld by the Company in respect of Danish income taxes. Dividends will be treated as foreign-source income to U.S. Holders and will not be eligible for the dividends-received deduction generally allowed to U.S. corporations under the Code. Dividends will generally be included in a U.S. Holder's income on the date of the U.S. Holder's receipt of the dividend. The amount of any dividend paid in Danish kroner will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognise foreign currency gain or loss in respect of the amount received. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt, and any such gain or loss will be U.S.-source ordinary income or loss. U.S. Holders should consult their tax advisers regarding the possible recognition of foreign currency gain or loss in respect of any amount of Danish taxes received as a refund from the Danish tax authorities after the date of distribution (See “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—individuals” and “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—companies”.) Subject to applicable limitations, some of which vary depending upon the U.S. Holder's circumstances, non-refundable Danish income taxes withheld from dividends on Shares at a rate not exceeding the applicable rate provided by the Treaty will be creditable against the U.S. Holder's U.S. federal income tax liability. Danish income taxes withheld in excess of the rate applicable under the Treaty will not be eligible for credit against a U.S. Holder's federal income tax liability. See “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—individuals” and “—Danish Tax Considerations—Taxation of shareholders residing outside Denmark—Dividends—companies” for a discussion of how to obtain the applicable Treaty rate or a refund of Danish taxes withheld in excess of the applicable Treaty rate. Foreign taxes eligible for credit are calculated separately with respect to specific classes of foreign source income. For this purpose, dividends paid by the Company on the Shares generally will constitute “passive category income” or in certain cases “general category income”. The rules governing foreign tax credits are complex, and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct foreign taxes, including the Danish tax, in computing their taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year. ## Sale or Other Taxable Disposition of Shares For U.S. federal income tax purposes, gain or loss realised on the sale or other taxable disposition of Shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the Shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder's tax basis in the Shares disposed of and the amount realised on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. Non-corporate U.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-term capital gains at preferential rates. The deductibility of capital losses is subject to limitations. ## Passive Foreign Investment Company Rules In general, a foreign corporation will be a PFIC for any taxable year in which (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. If a corporation owns at least 25% (by value) of the stock of another corporation, the corporation will be treated, for purposes of the PFIC tests, as owning its proportionate share of the 25%-owned corporation's assets and receiving its proportionate share of the 25%-owned corporation's income. “Passive income” generally includes interest, dividends, rents and royalties (other than certain rents and royalties derived in the active conduct of a trade or business) and certain gains. The Company does not expect to be a PFIC for U.S. federal income tax purposes for its current taxable year or in the foreseeable future. However, because PFIC status depends on the composition of the Company's income and assets and the market value of its assets, including goodwill, from time to time (which may be determined, in part, by reference to the market price of the Shares), there can be no assurance that the Company will not be a PFIC for any taxable year. In general, if the Company were a PFIC for any taxable year during which a U.S. Holder held Shares, gain recognised by the U.S. Holder on a sale or other disposition (including certain pledges) of Shares, and income from certain “excess distributions,” would be allocated ratably over the U.S. Holder's holding period for the 214 --- Shares. The amounts allocated to the taxable year of the sale or other disposition or the receipt of excess distribution and to any year before the Company became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as applicable, for that taxable year, and an interest charge would be imposed on the resulting tax liability with respect to each such taxable year. Certain elections may be available that would result in alternative treatments (such as a mark-to-market treatment) of the Shares. U.S. Holders should consult their tax advisers to determine whether any of these elections would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances. If the Company were a PFIC for any taxable year during which a U.S. Holder owns Shares, the Company will generally continue to be treated as a PFIC with respect to the U.S. Holder for all succeeding years during which the U.S. Holders owns the Shares, even if the Company ceases to meet the threshold requirements for PFIC status. Furthermore, if the Company were a PFIC for the taxable year in which it paid a dividend or the prior taxable year, the reduced rate discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply. If the Company were a PFIC, a U.S. Holder would also be subject to annual information reporting requirements. U.S. Holders should consult their tax advisers regarding the application of the PFIC rules to their investment in the Shares. ## Information Reporting and Backup Withholding Payments of dividends and proceeds from the sale or other taxable disposition of Shares that are made within the United States or through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding, unless (i) the U.S. Holder is a corporation or other "exempt recipient" or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the Internal Revenue Service. ## Foreign Financial Assets Reporting Certain U.S. Holders who are individuals (and certain specified or non-U.S. financial accounts through which the Shares are held) may be required to report information relating to the Shares. U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership and disposition of the Shares. 215 --- 216 # THE OFFERING ## Joint Global Coordinators The Offering is being arranged by Danske Bank A/S, Deutsche Bank AG, London Branch and Morgan Stanley & Co. International plc in their capacity as Joint Global Coordinators and Joint Bookrunners and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as Joint Bookrunner. ## The Offering The Offering consists of: (i) an initial public offering to retail and institutional investors in Denmark; (ii) a private placement in the United States to persons who are “qualified institutional buyers” or “QIBs” (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A; and (iii) private placements to institutional investors in the rest of the world. The Offering outside the United States will be made in compliance with Regulation S under the U.S. Securities Act. The Selling Shareholders are offering 20,000,000 Offer Shares, excluding any Shares subject to the Overallotment Option. The Significant Shareholders have agreed to grant the Joint Global Coordinators, on behalf of the Managers, an Overallotment Option to purchase up to 3,000,000 Option Shares at the Offer Price, exercisable, in whole or in part, from the date of Admission until 30 calendar days thereafter, solely to cover overallotments or short positions, if any, incurred in connection with the Offering. See “Plan of Distribution”. The Significant Shareholders are offering between 8,753,013 and 8,878,762 Offer Shares, excluding any Shares subject to the Overallotment Option and between 11,753,013 and 11,878,762 Offer Shares, including all Shares subject to the Overallotment Option. André Rogaczewski Holding ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Holdingselskabet Claus Jørgensen ApS is offering between 1,691,432 and 1,702,267 Offer Shares, Carsten Gomard Holding ApS is offering between 879,209 and 880,031 Offer Shares, NC NorthCo AB is offering between 1,501,921 and 1,523,498 Offer Shares, Danica Pension, Livsforsikringsaktieselskab is offering between 842,262 and 1,029,431 Offer Shares and the MIP Participants and Employee Shareholders are offering between 4,452,740 and 4,471,735 Offer Shares. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. Each of the Selling Shareholders will sell a number of Shares pro rata to their relative ownership of the Company, following completion of the IPO Reorganisation, but prior to Admission. The exact number of Shares to be held by each Selling Shareholder, following completion of the IPO Reorganisation, will be determined on the basis of the final Offer Price, as part of the IPO Reorganisation. See “Reorganisation”. ## Offer Price The Offer Price will be determined through a book-building process. Book-building is a process in which the Joint Global Coordinators, prior to the final pricing of the Offering, determine the Offer Price by collecting expressions of interest in the Offer Shares from potential institutional investors. Following the book-building process, the Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, the Board of Directors and the Joint Global Coordinators. The Offer Price is expected to be announced through Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. The Offer Price is free of brokerage charges and is expected to be between DKK 135 and DKK 165 per Offer Share. This indicative Offer Price Range has been set by the Significant Shareholders in consultation with the other Selling Shareholders, the Board of Directors and the Joint Global Coordinators, taking into account, among other things, the Company's historic and projected revenue and earnings, the Company's objective to establish an orderly after market in the Offer Shares and prevailing market conditions. It is currently expected that the Offer Price will be set within the Offer Price Range. If the Offer Price Range is adjusted, the Company will make an announcement through Nasdaq Copenhagen and publish a supplement to this Offering Circular. Following publication of such supplement, investors who have submitted orders to --- purchase Offer Shares in the Offering will have two trading days to withdraw their purchase offer. In such an event, the announcement of the final Offer Price will not be published until the period for exercising such withdrawal rights has ended. See also “—Investors’ Withdrawal Rights”. ## Offer Period The Offer Period will commence on 23 May 2018 and will close no later than 6 June 2018 at 11:00 a.m. (CET). The Offer Period may be closed prior to 6 June 2018; however, the Offer Period will not be closed in whole or in part before 1 June 2018 at 00:01 a.m. (CET). If the Offering is closed before 6 June 2018, the announcement of the Offer Price, allocation and the Admission may be moved forward accordingly. The Offer Period in respect of applications for purchases of amounts up to, and including, DKK 3 million may be closed before the remainder of the Offering is closed. Any such earlier closing, in whole or in part, will be announced through Nasdaq Copenhagen. ## Submission of Bids ### Applications to purchase for amounts of up to and including DKK 3 million Applications by Danish investors to purchase for amounts of up to and including DKK 3 million should be made by submitting the application form enclosed in the English Language Prospectus to the investor’s own account holding bank during the Offer Period or such shorter period as may be announced through Nasdaq Copenhagen. Applications are binding and cannot be altered or cancelled. Bids may be made at a maximum price per Offer Share in Danish kroner. If the Offer Price exceeds the maximum price per Offer Share stated in the application form, then no Offer Shares will be allocated to the investor. Where no maximum price per share has been indicated, applications will be deemed to be made at the Offer Price. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. Applications should be made for a number of Offer Shares or for an aggregate amount rounded down to the nearest Danish kroner amount. Only one application will be accepted from each account in VP Securities. For binding orders, the application form must be submitted to the investor’s own account holding bank in complete and executed form in due time to allow the investor’s own account holding bank to process and forward the application to ensure that it is in the possession of Danske Bank A/S, no later than 11:00 a.m. (CET) on 6 June 2018, or such earlier time at which the Offering is closed. ### Applications to purchase for amounts of more than DKK 3 million Investors who wish to apply to purchase for amounts of more than DKK 3 million can indicate their interest to one or more of the Managers during the Offer Period. During the Offer Period, such investors can continuously change or withdraw their declarations of interest, but these declarations of interest become binding applications at the end of the Offer Period. Immediately following the determination of the Offer Price, investors will be allocated a number of Offer Shares at the Offer Price within the limits of the investor’s most recently submitted or adjusted declaration of interest. All applications made at a price equivalent to the Offer Price, or a higher price, will be settled at the Offer Price following allotment, if any. ### Minimum and Maximum Purchase Amounts The minimum purchase amount is one Offer Share. No maximum purchase amount applies to the Offering. However, the number of shares is limited to the number of Offer Shares in the Offering. ### Allocation and Reduction In the event that the total number of Shares applied for in the Offering exceeds the number of Offer Shares, reductions will be made as follows: - With respect to applications for amounts of up to and including DKK 3 million, reductions will be made mathematically. - With respect to applications for amounts of more than DKK 3 million, individual allocations will be made. The Joint Global Coordinators will allocate the Offer Shares after agreement upon such allocations with the Selling Shareholders and the Board of Directors. - Up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) will be reserved for Danske Bank A/S to purchase for the purpose of ensuring delivery to the Company pursuant to the LTIP Equity Swap, see also “The Board of Directors, Executive Management and Key Employees—Incentive Programmes”. 217 --- It is expected that the result of the Offering, the Offer Price and the basis of the allocation will be announced through Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. If the Offer Period is closed before 6 June 2018, announcement of the Offer Price and allocation will be brought forward accordingly. Following the expiration of the Offer Period, investors will receive a statement indicating the number of Offer Shares allocated, if any, and the equivalent value at the Offer Price unless otherwise agreed between the investor and the relevant account holding bank. Orders as well as indications of interest may not result in an allocation of Offer Shares. If the total applications in the Offering exceed the number of Offer Shares, a reduction will be made. In such event, the Joint Global Coordinators reserve the right to require documentation to verify that each application relates to a single account in VP Securities. Further, the Joint Global Coordinators reserve the right to require documentation to verify the authenticity of all orders, to demand the name of each purchaser, to pass on such information to the Company and the Selling Shareholders, and to make individual allocations if there are several orders that are determined to have originated from the same investor. To the extent several orders are determined to have originated from the same investor, only the largest order in Danish kroner will be taken into consideration and all other orders will be rejected. ## Trading and Official Listing on Nasdaq Copenhagen Application has been made for the Shares to be admitted to trading and official listing under the symbol "NETC" on Nasdaq Copenhagen. The Admission is subject to, among other things, completion of the IPO Reorganisation, Nasdaq Copenhagen's approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to the settlement of the Offering and the Company making an announcement to that effect. The Shares are expected to be admitted to trading and official listing on Nasdaq Copenhagen under the permanent ISIN on 7 June 2018. If the Offering is closed before 6 June 2018, the Admission, the Settlement Date and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. Payment for and settlement of the Offer Shares are expected to take place on or around 11 June 2018. If the Offering is not completed, no Offer Shares will be delivered to investors. Consequently, any trades in the Shares effected on or off the market before settlement of the Offering may subject investors to liability for not being able to deliver the Shares sold and investors who have sold or acquired Shares on or off the market may incur a loss. Any such dealings will be at the sole risk of the parties concerned. If the Offering is terminated or withdrawn prior to settlement, the Offering and any associated arrangements will lapse, all submitted orders will be automatically cancelled, any monies received in respect of the Offering will be returned to the investors without interest (less any transaction costs) and admission to trading and official listing of the Shares on Nasdaq Copenhagen will be cancelled. Consequently, any trades in the Shares effected on or off the market before settlement of the Offering may subject investors to liability for not being able to deliver the Shares sold, and investors who have sold or acquired Shares on or off the market may incur a loss. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. ## Identification Permanent ISIN for the Shares: DK0060952919. Nasdaq Copenhagen Symbol for the Shares: "NETC". ## Share Lending Agreement The Significant Shareholders have, pursuant to a Share Lending Agreement, agreed with the Joint Global Coordinators to make available up to 3,000,000 Shares for purposes of delivery of the Offer Shares to investors in connection with the Overallotment Option. The Shares made available by the Significant Shareholders shall be redelivered by the Joint Global Coordinators, no later than following the expiry of the Overallotment Option. No costs, interest or other payments shall be made by the Group as a result of the Share Lending Agreement or the Overallotment Option, if exercised. 218 --- 219 # Registration and Settlement The Offer Shares will be registered in book-entry form electronically with VP Securities, Weidekampsgade 14, P.O. Box 4040, 2300 Copenhagen S, Denmark. All Shares are registered on accounts with account holding banks in VP Securities. Investors that are not residents of Denmark may use a Danish bank directly or their own bank's Danish correspondent bank as their account holding bank or arrange for registration and settlement through Clearstream, 42 Avenue JF Kennedy, L-1855 Luxembourg, Luxembourg, or Euroclear, 1, Boulevard du Roi Albert II, B-1210 Brussels, Belgium. Payment for and settlement of the Offer Shares are expected to take place on 11 June 2018 (i.e. the Settlement Date), by way of delivery of Shares against payment in immediately available funds in Danish kroner in book-entry form to investors' accounts with VP Securities and through the facilities of Euroclear and Clearstream. If the Offering is closed before 6 June 2018, the Settlement Date, the delivery of Shares and the first day of trading and official listing of the Shares on Nasdaq Copenhagen may be moved forward accordingly. The account holding bank will normally send a statement to the name and address registered in VP Securities showing the number of Offer Shares purchased for by the investor unless otherwise agreed between the investor and the relevant account holding bank. This statement also constitutes evidence of the investor's holding. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. # Withdrawal of the Offering Completion of the Offering is conditional upon the Offering not being withdrawn. The Offering may be withdrawn by the Company, the Selling Shareholders and the Joint Global Coordinators at any time before pricing and allocation of the Offering and first day of trading and official listing of the Shares on Nasdaq Copenhagen take place. The Offering may also be withdrawn if Nasdaq Copenhagen is not satisfied that there will be a sufficiently broad distribution of the Shares to investors or if, for other reasons, the Shares cannot be admitted for trading and/or official listing on Nasdaq Copenhagen. In addition, the Underwriting Agreements contain a provision entitling the Joint Global Coordinators, but not the Company, to terminate the Offering (and the arrangements associated with it) at any time prior to settlement of the Offering by delivery, and payment for the Offer Shares expected on or around 11 June 2018 (including after Admission) in certain circumstances, including force majeure and material changes in the financial condition of the Group's business. The termination rights of the parties to the Underwriting Agreements will lapse upon settlement of the Offering, currently expected to take place on 11 June 2018, except in respect of the Option Shares. The termination rights of the parties to the Underwriting Agreements shall lapse, in respect of the Option Shares, upon settlement of the sale of the Option Shares, if the Overallotment Option is exercised. Nasdaq Copenhagen's approval of the Admission on Nasdaq Copenhagen is subject to such termination rights not being exercised after pricing and prior to settlement of the Offering (excluding any termination rights in respect of the Overallotment Option). The Underwriting Agreements contain closing conditions which the Company believes are customary for offerings such as the Offering. In addition, the Company and the Selling Shareholders have given usual representations and warranties to the Managers. The completion of the Offering is dependent on compliance with all of the closing conditions set forth in the Underwriting Agreements. If one or more closing conditions are not met, the Managers may, at their discretion, withdraw the Offering. If the Offering is terminated or withdrawn prior to settlement: the Offering and any associated arrangements will lapse, all submitted orders will be automatically cancelled, any monies received in respect of the Offering will be returned to the investors without interest (less any transaction costs) and admission to trading and official listing of the Shares on Nasdaq Copenhagen will be cancelled. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. Any withdrawal of the Offering will be announced immediately through Nasdaq Copenhagen. --- 220 # Investors' Withdrawal Rights In the event that the Company is required to publish a supplement to this Offering Circular, between the date of publication of this Offering Circular and Admission, investors who have submitted orders to purchase Offer Shares in the Offering shall have two trading days following the publication of the relevant supplement within which the investors can withdraw their offer to purchase Offer Shares in the Offering in its entirety. The right to withdraw an application to purchase Offer Shares in the Offering in these circumstances will be available to all investors in the Offering, provided the obligation to publish a supplement to this Offering Circular was triggered before the Admission and provided no Offer Shares have been delivered. If the order is not withdrawn within the stipulated period any order to purchase Offer Shares in the Offering will remain valid and binding. # Costs of the Offering The total expenses in relation to the Offering payable by the Group to the Managers, other advisor fees and expenses and fees related to the Refinancing, are estimated to be approximately DKK 50 million, of which 17.5 million were expensed in the financial year ended 2017. In addition, certain expenses in relation to the Offering, including commissions and fees (fixed and discretionary) to be paid to the Managers, are payable by the Selling Shareholders based proportionately on the numbers of Offer Shares that are sold in the Offering. Further, the Selling Shareholders have agreed to pay a selling commission to account holding banks (unless such account holding bank is a Manager) equivalent to 0.25% of the Offer Price of the Offer Shares that are allocated in respect of orders of up to and including DKK 3 million submitted through the account holding banks (except for the Managers) to be paid proportionally by the Selling Shareholders based on the number of Offer Shares, respectively, that are sold. None of the Company, the Selling Shareholders or the Managers will charge expenses to investors. Investors will have to bear customary transaction and handling fees charged by their account holding banks. # Selling Agents for the Danish Offering Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark A request for copies of the English Language Prospectus may be submitted by persons who satisfy the requirements of the applicable selling restrictions from: Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark E-mail: [email protected] Tel.: +45 70 23 08 34 In addition, the English Language Prospectus is available, subject to certain restrictions, on the Company's website (www.netcompany.com). Information included on the Company's website does not form part of and is not incorporated into this Offering Circular. The distribution of this Offering Circular and the offer or sale of the Offer Shares in certain jurisdictions are restricted by law. Persons possessing this Offering Circular are required by the Company, the Selling Shareholders and the Managers to inform themselves about and to observe any restrictions. This Offering Circular does not constitute an offer to sell or a solicitation of an offer to buy any of the Offer Shares in any jurisdiction to any person to whom it would be unlawful to make such an offer in such jurisdiction. # Interests of Natural and Legal Persons Involved in the Offering As described in "Board of Directors, Executive Management and Key Employees—Statement on Conflicts of Interest" and in "Ownership Structure and Selling Shareholders", certain members of the Board of Directors as well as the Executive Management and the Key Employee will be shareholders, directly or indirectly, in the Company following completion of the IPO Reorganisation or hold economic interests therein and therefore have an interest in the Offering. The Executive Management and the Key Employee will, subject to completion of the --- Offering, participate in certain share-based incentive programmes as described in “Board of Directors, Executive Management and Key Employees—Incentive programmes” and therefore have a direct economic interest in the Offering. No member of the Board of Directors or Executive Management, directly or indirectly, hold more than 5% of the Company’s share capital except for André Rogaczewski, CEO and Claus Jørgensen, COO, who will, through their respective holding companies, own 8.5% and 8.5% respectively of the share capital in the Company (assuming an Offer Price at the midpoint of the Offer Price Range), following completion of the IPO Reorganisation, but prior to Admission. The Shares held indirectly by André Rogaczewski, CEO and Claus Jørgensen, COO through their respective holding companies (André Rogaczewski Holding ApS and Holdingselskabet Claus Jørgensen ApS) will be transferred to a joint holding company, to be established immediately prior to Admission. The shares and voting rights in the joint holding company of André Rogaczewski, CEO and Claus Jørgensen, COO will be held in proportion to their ownership of the Company following completion of the IPO Reorganisation and will be governed by a shareholders’ agreement. In addition, the Key Employee will, through his holding company, own 7.6%, of the share capital in the Company, following completion of the IPO Reorganisation. See also “Plan of Distribution” for a description of certain interests of the Managers in the Offering. The Company is not aware of any other potential interest of natural or legal persons involved in the Offering who may have a material interest in the Offering. ## Governing Law The Shares are issued in accordance with Danish law. 221 --- 222 # THE DANISH SECURITIES MARKET Set forth below is a summary of certain information concerning the Danish securities market including information on certain provisions of Danish law and Danish securities market regulations in effect on the date of this Offering Circular. Such summary is qualified in its entirety by reference to the applicable Danish law and securities market regulations. ## Nasdaq Copenhagen Nasdaq Copenhagen is a company incorporated and organised under the laws of Denmark. Trading on Nasdaq Copenhagen is conducted by authorised firms, which include major Danish banks and other securities brokers, as well as certain mortgage credit institutions and the Danish Central Bank. The trading system for equities trading in Denmark on Nasdaq Copenhagen operates between 9:00 a.m. and 4:55 p.m. (CET) on weekdays. After the end of the continuous trading there is a pre-closing call between 4:55 p.m. to 5:00 p.m. (CET). An after trade "post trade" session exists from 5:00 p.m. to 5:20 p.m. (CET). Before the continuous trading begins, there is a second after trade "pre-open" session from 8:00 a.m. to 9:00 a.m. (CET) and a morning call session from 8:45 a.m. to 9:00 a.m. (CET) for the purpose of establishing fair opening prices. After the opening prices have been presented, the continuous trading begins. ## Registration Process In connection with an initial public offering, a company's shares are registered in book-entry form on accounts maintained in the computer system of VP Securities, which acts as an electronic central record of ownership and as the clearing centre for all transactions in Denmark. The address of VP Securities is Weidekampsgade 14, P.O. Box 4040, 2300 Copenhagen S, Denmark. Danish financial institutions, such as banks, are authorised to keep accounts for each specific investor with VP Securities, including for Euroclear and Clearstream. All Danish shares listed on Nasdaq Copenhagen are dematerialised, "non-certificated" and registered at VP Securities. The account is maintained through an account holding bank. The account holding bank has the exclusive right to make transactions and registrations on these accounts on behalf of its customers. Shares shall be registered in the name of the holder through the account holding bank. ## Nominees An account may be kept on behalf of one or more owners, meaning that a shareholder may appoint a nominee. A nominee shareholder is entitled to receive dividends and to exercise all subscription and other financial and administrative rights attached to the shares held in its name with VP Securities. The relationship between the nominee shareholder and the beneficial owner is regulated solely by an agreement between the parties, and the beneficial owner must disclose its identity if any of the aforementioned rights are to be exercised directly by the beneficial owner. The right to appoint a nominee does not eliminate a shareholder's obligation to notify the Company and the Danish Financial Supervisory Authority (the "Danish FSA") of a major shareholding. See "Disclosure of Major Shareholdings" below. ## Settlement Process Settlement in connection with trading on Nasdaq Copenhagen normally takes place on the second business day after effecting a sale or purchase transaction. On behalf of VP Securities, the account holding bank sends a statement to the name and address recorded in VP Securities, showing the amount of shares held in that name, which provides the holder with evidence of its rights. Settlement can also take place through the clearing facilities of Euroclear and Clearstream. --- # Disclosure of Major Shareholdings Shareholders in Danish companies with shares admitted to trading and official listing on Nasdaq Copenhagen are, pursuant to Section 38 of the Danish Capital Markets Act, required to give simultaneous notice to the company and the Danish FSA of the shareholding in the company, when the shareholding reaches, exceeds or falls below thresholds of 5%, 10%, 15%, 20%, 25%, 50% or 90% and limits of one-third or two-thirds of the voting rights or nominal value of the total share capital. A shareholder in a company means a natural or legal person who, directly or indirectly, holds: (i) shares in the company on behalf of himself and for his own account; (ii) shares in the company on behalf of himself, but for the account of another natural or legal person; or (iii) depository receipts, where such holder is considered a shareholder in relation to the underlying shares represented by the depository receipts. The duty to notify set forth above further applies to natural and legal persons who are entitled to acquire, sell or exercise voting rights which are: (i) held by a third party with whom that natural or legal person has concluded an agreement, which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the issuer in question (common duty to inform for all parties to the agreement); (ii) held by a third party under an agreement concluded with that natural or legal person providing for the temporary transfer of the voting rights in question in return for consideration; (iii) attached to shares which are lodged as collateral for that natural or legal person, provided the person controls the voting rights and declares an intention of exercising them; (iv) attached to shares in which that natural or legal person has a lifelong right of disposal; (v) held, or may be exercised within the meaning of (i) to (iv), by an undertaking controlled by that person or entity; (vi) attached to shares deposited with that natural or legal person and which the person can exercise at his own discretion in the absence of specific instructions from the shareholders; (vii) held by a third party in its own name on behalf of that person; or (viii) exercisable by that person through a proxy where that person may exercise the voting rights at his discretion in the absence of specific instructions of the shareholder. The duty to notify set forth above also applies to anyone, who directly or indirectly holds (a) financial instruments that afford the holder either an unconditional right to acquire or the discretion as to his right to acquire existing shares (e.g., share options); and/or (b) financial instruments based on existing shares and with an economic effect equal to that of the financial instruments mentioned in (a), regardless of them not affording the right to purchase existing shares (e.g., cash-settled derivatives linked to the value of the shares in question). Holding these kinds of financial instruments counts towards the thresholds mentioned above and may thus trigger a duty to notify by themselves or when accumulated with a shareholding. The notification shall be made promptly but not later than four weekdays after the shareholder was aware or should have become aware of the completion of the transaction, and in accordance with the provisions of Danish Executive Order no. 1172 of 31 October 2017 on Major Shareholders (the "Danish Executive Order on Major Shareholders"). The shareholder is deemed to have become aware of the completion of the transaction two weekdays after the completion of the transaction. The shareholder shall disclose the change in voting rights and shares, including the number of voting rights (and the division of voting rights between share classes, if applicable) and shares held directly or indirectly by the shareholder following the transaction. The notification shall further state the transaction date on which the threshold was reached or no longer reached and the identity of the shareholder as well as the identity of any natural or legal person with the right to vote on behalf of the shareholder and in the case of a group structure, the chain of controlled undertakings through which voting rights are effectively held. The information shall be notified to the company and simultaneously submitted electronically to the Danish FSA. Failure to comply with the notification requirements is punishable by fine or suspension of voting rights in instances of gross or repeated non-compliance. When an obligation to notify rests on more than one natural or legal person, the notification may be made through a joint notification. However, use of a joint notification does not exempt the individual shareholders or natural or legal persons from their responsibilities in connection with the obligation to notify or the contents of the notification. After receipt of the notification, but not later than three weekdays thereafter, the company shall publish the contents of the notification. 223 --- A similar duty, as set forth above, to publish major shareholdings also applies to a company's holding of treasury shares. A Danish company with shares admitted to trading and official listing on Nasdaq Copenhagen is required to promptly, but not later than four weekdays thereafter, publish an announcement specifying the company's, direct or indirect, holding of treasury shares, when the holding reaches, exceeds or falls below the thresholds of 5% or 10% of the voting rights or the nominal value of the share capital. This duty applies regardless of whether the company holds the treasury shares itself or through a person acting in his own name but on the company's behalf. Furthermore, the general duty of notification under Section 55 of the Danish Companies Act in respect of notification of significant holdings (similar to the thresholds set out in the Danish Capital Markets Act Section 38) applies, including when the limit of 100% of the share capital's voting rights or nominal value of the company is reached or are no longer reached. Section 58 of the Danish Companies Act provides that a company shall publish information related to major shareholdings received pursuant to Section 55 of the Danish Companies Act in an electronic public register of shareholders which is kept by the Danish Business Authority. ## Short Selling The Short Selling Regulation (236/2012/EU) includes certain notification requirements in connection with short selling and imposes restrictions on uncovered short selling of shares admitted to trading on a trading venue (including Nasdaq Copenhagen). When a natural or legal person reaches or falls below a net short position of 0.2% of the issued share capital of a company that has shares admitted to trading on a trading venue, such person shall notify the relevant competent authority, which in Denmark is the Danish FSA. The obligation to notify, moreover, applies in each case where the net short position reaches or falls below each 0.1% threshold above the 0.2% threshold. In addition, when a natural or legal person reaches or falls below a net short position of 0.5% of the issued share capital of a company that has shares admitted to trading on a trading venue and each 0.1% threshold above that, such person shall make a public announcement of its net short position. A natural or legal person is prohibited from entering into a short sale of shares admitted to trading on a trading venue unless one of the following conditions is satisfied: (i) the natural or legal person has borrowed the share or has made alternative provisions resulting in a similar legal effect; (ii) the natural or legal person has entered into an agreement to borrow the share or has another absolutely enforceable claim under contract or property law to be transferred ownership of a corresponding number of securities of the same class so that settlement can be effected when it is due; or (iii) the natural or legal person has an arrangement with third party under which that third party has confirmed that the share has been located and has taken measures vis-à-vis third parties necessary for the natural or legal person to have a reasonable expectation that settlement can be effected when it is due. Certain exemptions apply to the prohibition, such as in the case of market-makers or in connection with stabilisation in accordance with the Commission Delegated Regulation (EU) 2016/1052 (the "Safe Harbour Regulation"). ## Mandatory Tender Offers The Danish Capital Markets Act (Part 8) and the Danish Executive Order no. 1171 of 31 October 2017 on Takeover Bids (the "Danish Executive Order on Takeover Bids"). Includes rules concerning public offers for the acquisition of shares admitted to trading on a regulated market (including Nasdaq Copenhagen). If a shareholding is transferred, directly or indirectly, in a company with one or more share classes admitted to trading on a regulated market, to an acquirer or to persons acting in concert with such acquirer, the acquirer and the persons acting in concert with such acquirer, if applicable, shall give all shareholders of the company the option to dispose of their shares on identical terms, if the acquirer or the persons acting in concert with such acquirer gains control over the company as a result of the transfer. Control as mentioned above exists if the acquirer or persons acting in concert with such acquirer, directly or indirectly, holds at least one-third of the voting rights in the company, unless it can be clearly proven in special cases that such ownership does not constitute control. An acquirer or persons acting in concert with such acquirer who does not hold at least one-third of the voting rights in a company, nevertheless has control when the acquirer has or persons acting in concert with such acquirer have: - the right to control at least one-third of the voting rights in the company according to an agreement with other investors; or - the right to appoint or dismiss a majority of the members of the central governing body. 224 --- Voting rights attached to treasury shares shall be included in the calculation of voting rights. The Danish Capital Markets Act contains specific exemptions from the obligation to submit a mandatory takeover offer, including transfers of shares by inheritance or transfer within the same group and as a result of a creditor's debt enforcement proceedings Exemptions from the mandatory tender offer rules may be granted under special circumstances by the Danish FSA. ## Mandatory Redemption of Shares Where a shareholder holds more than 90% of the shares in a company and a corresponding proportion of the voting rights, such shareholder may, pursuant to the Danish Companies Act, Section 70, decide that the other shareholders have their shares redeemed by that shareholder. In this case, the other shareholders must be requested, under the rules governing notices for general meeting, to transfer their shares to the shareholder within four weeks after the request to transfer their shares. In addition, the other shareholders shall through the Danish Business Authority's IT system be requested to transfer their shares within the same four-week period. Specific requirements apply to the contents of the notices to the other shareholders regarding the redemption. If the redemption price cannot be agreed upon, the redemption price must be determined by an independent expert appointed by the court in the jurisdiction of the company's registered office in accordance with the provisions of the Danish Companies Act. However, the redemption price will be deemed fair under any circumstances, provided that (i) the redemption takes place in continuation of a voluntary tender offer by which the bidder obtained at least 90% of the voting rights, or (ii) the redemption takes place after a mandatory tender offer. To the extent any minority shareholders have not transferred their shares to the acquiring shareholder before the expiry of the four-week period, the redeeming shareholder shall, as soon as possible thereafter, deposit the amount required for redemption for the benefit of such minority shareholders. Upon the deposit, such minority shareholders will have been redeemed and the minority shareholders shall in such case through the Danish Business Authority's IT system be notified that the right to require determination of the redemption price by the independent expert expires at the end of a period, which cannot be less than three months pursuant to the Danish Companies Act, Section 72. Furthermore, where a shareholder holds more than 90% of the shares in a company and a corresponding proportion of the voting rights, the other shareholders may require such shareholder to acquire their shares pursuant to Section 73 of the Danish Companies Act. If the redemption price cannot be agreed upon, the redemption price must be determined by an independent expert appointed by the court in the jurisdiction of the company's registered office in accordance with the provisions of the Danish Companies Act. Expenses relating to the determination of the redemption price must be paid by the shareholder requesting such determination. If the valuation is higher than that offered by the redeeming shareholder, the court may order the redeeming shareholder to pay the expenses relating to determination of the redemption price in full or in part. ## Disclosure Requirements for Companies Admitted to Trading and Official Listing on Nasdaq Copenhagen As a company with its securities admitted to trading on a regulated market, the Company will under Regulation (EU) no. 596/2014 on Market Abuse (the "Market Abuse Regulation") and the Issuer Rules of Nasdaq Copenhagen be obliged to inform the public and the Danish FSA of inside information, as defined in Article 7 of the Market Abuse Regulation, as soon as possible if such information directly concerns the Company. Inside information must be disclosed as soon as possible unless the Company is in a position to delay such disclosure to the public with reference to Article 17(4) of the Market Abuse Regulation. In addition, the Company will be obliged to disclose certain other information to the public pursuant to the Danish Capital Markets Act, the Danish Executive Order no. 1173 of 31 October 2017 on an Issuers' Duty to Provide Information (the "Danish Executive Order on Issuers' Duty to Provide Information") and the Issuer Rules of Nasdaq Copenhagen, regardless of whether this information amounts to inside information. Information which would have to be disclosed under these rules includes, for example: (i) changes to the Board of Directors, Executive Management and auditors; (ii) decisions to introduce incentive schemes; (iii) substantial changes in business activities; (iv) material acquisitions and divestments; (v) unexpected and significant deviations in the Company's financial result or position; (vi) proposed changes in the capital structure; and (vii) annual and interim reports and accounts. Furthermore, the Company will be required to make sure that no unauthorised person gains access to inside information prior to its publication to the market. 225 --- PLAN OF DISTRIBUTION ## The Offering In connection with the Offering, two separate underwriting agreements are expected to be entered into, between respectively (i) the Company, certain of the Selling Shareholders and the Managers and (ii) the Company, certain of the Selling Shareholders and Danske Bank A/S. Each such underwriting agreement are expected to be entered into immediately prior to Admission which is expected to occur on 7 June 2018 (the “Underwriting Agreements”). Subject to certain conditions set forth in the Underwriting Agreements, the Selling Shareholders will agree to sell to the purchasers procured by the Managers or, failing which, to the Managers themselves; and each of the Managers, severally but not jointly, will agree to procure purchasers for, or failing such procurement, to purchase from the Selling Shareholders the percentage of total number of Offer Shares, excluding the LTIP Equity Swap, offered listed opposite such Manager’s name below. | Managers | Percentage of Offer Shares | | --- | --- | | Danske Bank A/S | 30% | | Deutsche Bank AG, London Branch | 30% | | Morgan Stanley & Co. International Plc | 30% | | Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige | 10% | | Total | 100% | The Underwriting Agreements provide that the obligations of the Managers are subject to: (i) receipt of opinions on certain legal matters from counsel; and (ii) certain other conditions, including receipt of auditor letters and reports and officer certificates. Both the Company and the Selling Shareholders have agreed to indemnify the Managers against certain losses and liabilities arising out of or in connection with the Offering, including liabilities under the U.S. Securities Act. The Managers are not required to take or pay for the Option Shares covered by the Managers’ Overallotment Option described below. The Underwriting Agreements provide that, upon the occurrence of certain events, such as the general suspension of all trading on Nasdaq Copenhagen, a material adverse change in the Group’s business, results of operations or financial condition or in the financial markets and under certain other conditions, the Managers may elect to terminate their several commitments and have the right to withdraw from the Offering before settlement of the Offering (i.e. payment for and settlement of the Offer Shares). If the Managers elect to terminate their several commitments, the Offering may be cancelled, and if it is cancelled, no Offer Shares will be delivered. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. Pursuant to the Underwriting Agreements, the Joint Global Coordinators, on behalf of the Managers, have been granted an option to purchase an aggregate of up to an additional 3,000,000 Option Shares from the Significant Shareholders, solely to cover overallotments or short positions, if any, exercisable for a period of 30 calendar days after Admission. If any Option Shares are agreed to be purchased under this option, each Manager will be obligated, subject to certain conditions contained in the Underwriting Agreements, to purchase a number of additional Option Shares proportionate to that Manager’s initial percentage of Offer Shares reflected in the table above, and the Significant Shareholders will be obligated to sell a number of Shares proportionate to the additional Option Shares over which they have granted this option. Purchasers of the Offer Shares may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the Offer Price. Application has been made for the Shares to be admitted to trading and official listing on Nasdaq Copenhagen. The Admission is subject to, among other things, completion of the IPO Reorganisation, Nasdaq Copenhagen’s approval of the distribution of the Offer Shares, the Offering not being withdrawn prior to settlement of the Offering and the Company making an announcement to that effect. The Offer Shares are expected to be delivered on or around 11 June 2018 against payment in immediately available funds in Danish kroner to investors’ accounts with VP Securities and through the facilities of Euroclear and Clearstream. The first day of trading and official listing of the Shares on Nasdaq Copenhagen is expected to be 7 June 2018 provided that the announcement of the Offer Price and allocation has been published through 226 --- Nasdaq Copenhagen no later than 7:30 a.m. (CET) on 7 June 2018. All dealings in the Offer Shares prior to settlement of the Offering will be conditional and for the account of and at the sole risk of the parties involved. As of the date of this Offering Circular, the Company does not hold any treasury shares, but for the purpose of meeting further obligations to deliver Shares under the Company's incentives programmes, the Company may buy Shares in the market at prevailing market price from time to time, see "Board of Directors, Executive Management and Key Employees—Incentive Programmes". For the purpose of delivering Shares to the participants in the Post-IPO LTIP upon vesting of the grant of restricted share units after the first vesting period, the Group has entered into an equity swap allowing the Company, on 15 April 2019, to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) at the Offer Price from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap. The number of Shares which may be purchased by the Company from Danske Banks A/S under the LTIP Equity Swap, will be reserved for Danske Bank A/S to purchase in the Offering. The costs related to the LTIP Equity Swap is expected to be approximately DKK 1 million, which will be expensed over the duration of the LTIP Equity Swap. See also "The Offering—Allocation and Reduction". In connection with the Offering, the Managers and any affiliates acting as investors for their own account may take up the Shares and in that capacity may retain, purchase or sell the Shares, for their own account and may offer or sell such securities otherwise than in connection with the Offering, in each case, in accordance with applicable law. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. No action has been or will be taken in any jurisdiction other than Denmark that would permit a public offering of the Offer Shares, or the possession, circulation or distribution of this Offering Circular or any other material relating to the Company or the Offer Shares, in any jurisdiction where action for that purpose is required. Accordingly, the Offer Shares may not be offered or sold, directly or indirectly, and neither this Offering Circular nor any other offering material or advertisements in connection with the Offer Shares may be distributed or published, in or from any country or jurisdiction, except in compliance with any applicable rules and regulations of such country or jurisdiction. Prior to the Offering, the Shares have never been listed, and there is currently no public market for the Shares. The Offer Price will be determined by the Significant Shareholders in consultation with the other Selling Shareholders, the Board of Directors and the Joint Global Coordinators, on the basis of a number of factors, including the following: - the orders, in terms of price and quantity, received from potential institutional and retail investors; - prevailing market conditions; - the Group's historical, operational and financial performance; - estimates of the Group's business potential and earning prospects; and - the market valuation of publicly traded common stock of comparable companies. The Offer Price is expected to be announced no later than at 7:30 a.m. (CET) on 7 June 2018. The indicative Offer Price Range set forth on the cover page of this Offering Circular is subject to change as a result of market conditions and other factors. See also "The Offering—Offer Price". There can be no assurance that an active trading market will develop for the Shares or that the Shares will trade in the public market after the Offering at, or above, the Offer Price. See also "Risk Factors—Risks Relating to the Offering". ## Lock-up Arrangements The Company has agreed with the Managers that it will not, except as set forth below, for a period of 180 days from Admission, without the prior written consent of the Managers: (i) issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce such action), directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or otherwise; or (iii) submit to the Company's shareholders a proposal to effect any of the foregoing. 227 --- The foregoing shall not apply to (i) Shares issued in connection with IPO Reorganisation, and (ii) the grant of restricted share units and Shares to the Executive Management and employees of the Company and its subsidiaries in accordance with the terms of the Company’s Post-IPO LTIP. The Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab, have agreed with the Managers that they will not, except as set forth below, for a period of 180 days after Admission, without the prior written consent of the Managers: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or publicly announce such action), directly or indirectly, any of their Shares, or any securities convertible into or exercisable or exchangeable for such Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Shares, whether any such transactions described in clause (i) or (ii) above are to be settled by delivery of such Shares or such other securities, in cash or otherwise; or (iii) propose any general meeting of the Company, or convene or take action to convene any general meeting for the purpose of proposing, any resolution of the Company authorising the issue of any Shares or warrants to subscribe for Shares. Further, the Significant Shareholders and Danica Pension, Livsforsikringsaktieselskab have agreed with the Managers that they will not publicly announce any intention to enter into any of the transactions mentioned in (i) and (ii). The foregoing shall not apply to: (i) disposal of Shares to their respective related parties, provided that such persons agree to adhere to identical restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) with respect to the Significant Shareholders, the lending of Shares under the Share Lending Agreement (see “The Offering—Share Lending Agreement”); (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of the relevant Selling Shareholder, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such Selling Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the Selling Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; or (viii) sale of subscription rights received in connection with a rights issue. The members of the Board of Directors, Executive Management, the Key Employee and the MIP Participants and Employee Shareholders have agreed with the Managers that, for a period of 360 days from Admission of the Shares, they will be subject to substantially the same restrictions as those of the Company and Selling Shareholders as set forth above. The foregoing shall not apply to: (i) the disposal to their respective (a) spouse, (b) child or (c) any legal entity over which they alone (or together with any other of their respective related parties) have a controlling influence, provided that such persons agree to adhere to similar restrictions; (ii) the sale of the Offer Shares in the Offering; (iii) disposal of Shares in connection with the IPO Reorganisation and/or the Post-IPO Reorganisation, including any disposal required to be made for the purpose of implementing, directly or indirectly, the IPO Reorganisation and/or the Post-IPO Reorganisation; (iv) disposal made with a view to settle any tax liabilities incurred as a result of the IPO Reorganisation and/or the Post-IPO Reorganisation (if any); (v) the transfer of Shares to the direct or indirect shareholders of an entity controlled by a member of the Board of Directors, the Executive Management, the Key Employee or the MIP Participants and Employee Shareholders, in connection with or arising out of any dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting such obliged Shareholder or any of its affiliates, provided that as a condition to such transfer and receipt of Shares, including through dividend or other distributions, or any liquidation, dissolution, reorganisation or other similar event affecting the obliged Shareholder or any of its affiliates, each such transferee shareholder has agreed to assume the lock-up obligations; (vi) disposal in accordance with a court order or as required by law or regulation; (vii) disposal occurring after death, permanent disability or interruption in employment for a continuous period of not less than 16 weeks due to disability or illness; (viii) disposal occurring after termination of employment by the Company (or the relevant employer company in the Group) or resignation from the Board of Directors; (ix) any disposal of Shares pursuant to a general offer made to all holders of shares in the Company made in accordance with takeover regulations on terms which treat all such holders alike; (x) sale of subscription rights received in connection with a rights issue; (xi) the transfer of Shares to a personal pension scheme; (xii) with respect to persons comprised by the Post-IPO LTIP, the cancellation of restricted share units, in the event that, the employment relationship with the Group, under certain circumstances, is terminated; and (xiii) with respect to certain of the MIP Participants and Employee Shareholders (holding in the aggregate less than 5% of the total 228 --- outstanding Shares of the Company following completion of the IPO Reorganisation and the Offering) having undertaken to sell their Shares to the Significant Shareholders in the event they are leaving the Group within the first three years after Admission, such sale and transfer to the Significant Shareholders or any transferee appointed by the Significant Shareholders. In addition to the above, each of the Selling Shareholders and the members of the Board of Directors, Executive Management, the Key Employee and MIP Participants and Employee Shareholders shall be entitled to grant security over any Shares held on Admission, subject to the condition that (i) the beneficiary of such security, or (ii) in the event of and enforcement of such security interest, any transferee (whether the beneficiary or a third party) of such shares, shall execute and deliver an adherence to the lock-up undertaking. Further, certain of the MIP Participants and Employee Shareholders have agreed with the Company that, for a period of up to three years from Admission, the Shares they receive as part of the IPO Reorganisation and/or the Post-IPO Reorganisation (which corresponds with all shares in NC TopCo A/S they hold prior to such events) will be subject to certain restrictions and exceptions. Further, these MIP Participants and Employee Shareholders have undertaken to sell their shares in the Company to the Significant Shareholders (or to a transferee appointed by the Significant Shareholders) in the event that their employment with the Group is terminated. If the termination of any such MIP Participants and Employee Shareholders is effected within a three year period after Admission and (i) is caused by such MIP Participants and Employee Shareholders' material breach of the employee relationship, or (ii) such MIP Participants and Employee Shareholders' employment is terminated without cause, the Significant Shareholders will be entitled to acquire the Shares held by such MIP Participants and Employee Shareholders at a discount compared to the prevailing market price of the Shares at the time of such sale to the Significant Shareholders. Assuming an Offer Price at the midpoint of the Offer Price Range, following completion of the IPO Reorganisation and prior to Admission, 11,157,978 Shares will be held by the MIP Participants and Employee Shareholders comprised by this undertaking. ## Price Stabilisation and Short Positions In connection with the Offering, Danske Bank A/S, as the stabilising manager, or its agents, on behalf of the Managers, may engage in transactions that stabilise, maintain or otherwise affect the price of the Shares for up to 30 days from the Admission. Specifically, the Managers, the Selling Shareholders and the Company have agreed that the stabilising manager on behalf of the Managers may overallot Offer Shares by accepting offers to purchase a greater number of Offer Shares than for which they are obligated to procure purchasers under the Underwriting Agreements, creating a short position. A short sale is covered if the short position is no greater than the number of Offer Shares available for purchase by the stabilising manager on behalf of the Managers under the Overallotment Option. The Managers can close out a covered short sale by exercising the Overallotment Option or purchasing Shares in the open market. In determining the source of Shares to close out a covered short sale, the Managers will consider, among other things, the open market price of Shares compared to the price available under the Overallotment Option. As an additional means of facilitating the Offering, the stabilising manager or its agents may effect transactions to stabilise the price of the Shares. These activities may support the market price of the Offer Shares at a level higher than that which might otherwise prevail. Such transactions may be effected on Nasdaq Copenhagen, in the over-the-counter markets or otherwise. The stabilising manager and its agents are not required to engage in any of these activities, and, as such, there is no assurance that these activities will be undertaken; if undertaken, the stabilising manager or its agents may end any of these activities at any time, and they must be brought to an end at the end of the 30-day period mentioned above. Save as required by law or regulation, the stabilising manager does not intend to disclose the extent of any stabilisation transactions under the Offering. ## Other Relationships The Managers and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities 229 --- related to or issued by the Company, its affiliates or other parties involved in or related to the Offering. Certain of the Managers and their respective affiliates have from time to time engaged in, and may in the future engage in, commercial banking, investment banking and financial advisory transactions and services in the ordinary course of their business with the Company or the Selling Shareholders or any of the Company's or their respective related parties. With respect to certain of these transactions and services, the sharing of information is generally restricted for reasons of confidentiality, internal procedures or applicable rules and regulations. The Managers have received and will receive customary fees and commissions for these transactions and services and may come to have interests that may not be aligned or could potentially conflict with potential investors' and the Company's interests. In particular, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates are lenders under the Group's existing indebtedness. In addition, Danske Bank A/S and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige and/or their respective affiliates will be a lender under the New Facilities. Furthermore, Danske Bank A/S, Skandinaviska Enskilda Banken AB (publ), Sverige and/or their respective affiliates, have previously received and may in the future receive services provided by the Company. In addition, Danica Pension, Livsforsikringsaktieselskab, one of the Selling Shareholders, is a wholly-owned subsidiary of Danske Bank A/S. Danske Bank A/S is a party to the LTIP Equity Swap, see also "The Board of Directors, Executive Management and Key Employees—Incentive Programmes". In addition, in the ordinary course of business, the Managers and their respective affiliates may make or hold a broad array of investments including serving as counterparties to certain derivative and hedging arrangements and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of the Company. Some of the Managers and/or their respective affiliates may from time to time hold certain direct or indirect minority interests in the Significant Shareholders. The Managers and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. 230 --- 231 # SELLING RESTRICTIONS ## United States The Offer Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States for offer or sale as part of their distribution and may not be offered or sold within the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act. The Offer Shares may only be resold (i) in the United States only to QIBs in reliance on Rule 144A under the U.S. Securities Act; and (ii) outside the United States in offshore transactions in compliance with Regulation S under the U.S. Securities Act and in accordance with applicable law. Any offer or sale of Offer Shares in reliance on Rule 144A will be made by broker-dealers who are registered as such under the U.S. Exchange Act. Terms used above shall have the meanings given to them by Regulation S and Rule 144A under the U.S. Securities Act. ## European Economic Area In relation to each Relevant Member State, no offer of the Offer Shares may be made to the public in that Relevant Member State, except that offers of the Offer Shares may be made under the following exemptions under the Prospectus Directive as implemented in that Relevant Member State: - to any qualified investor as defined in the Prospectus Directive; - to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Joint Global Coordinators for any such offer; or - in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of Offer Shares shall result in a requirement for the publication by the Company or any Manager of a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this paragraph, the expression an “offer of the Offer Shares may be made to the public” in relation to any of the Offer Shares in any Relevant Member State, means the communication in any form and by any means of sufficient information on the terms of the Offering and the Offer Shares to be offered so as to enable an investor to decide to purchase the Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. ## United Kingdom Any offer or sale of the Offer Shares may only be made to persons in the United Kingdom who are “qualified investors” or otherwise in circumstances which do not require publication by the Company of a prospectus pursuant to section 85(1) of the UK Financial Services and Markets Act 2000. This Offering Circular is only being distributed to, and is only directed at, and any investment or investment activity to which this Offering Circular relates is available only to, and will be engaged in only with, persons who: (i) have professional experience in matters relating to investments falling within the definition of “investment professionals” in Article 19(5) of the Order 2005; (ii) are high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts, as described in Article 49(2) of the Order 2005; (iii) the Company believes on reasonable grounds to be persons to whom Article 43(2) of the Order 2005 applies for these purposes; or (iv) other persons to whom such investment or investment activity may lawfully be made available (all such persons referred to in (i), (ii), (iii) and (iv) together, “Relevant Persons”). Any other persons who are not Relevant Persons should not take any action on the basis of this offering memorandum and should not act or rely on it. ## Canada The Offer Shares are not being offered and may not be sold to any purchaser in a province or territory of Canada other than the provinces of Alberta, British Columbia, Ontario and Quebec. --- The Offer Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Offer Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this Offering Circular (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts ("NI 33-105"), the Managers are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the Offering. ## General No action has been or will be taken in any country or jurisdiction other than Denmark that would, or is intended to, permit a public offering of the Offer Shares, or the possession or distribution of this Offering Circular or any other offering material, in any country or jurisdiction where action for that purpose is required. Persons into whose hands this Offering Circular comes are required by the Company, the Selling Shareholders and the Managers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Offer Shares or have in their possession or distribute such offering material, in all cases at their own expense. Neither the Company, the Selling Shareholders nor the Managers accept any legal responsibility for any violation by any person, whether or not a prospective purchaser of any of the Offer Shares, of any such restrictions. 232 --- 233 # TRANSFER RESTRICTIONS The Offer Shares have not been, and will not be, registered under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. Each purchaser of the Offer Shares outside the United States in compliance with Regulation S will be deemed to have represented and agreed that it has received a copy of this Offering Circular and such other information as it deems necessary to make an informed investment decision and that: (1) the purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all applicable laws and regulations; (2) the purchaser acknowledges that the Offer Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority of any state of the United States, and, subject to certain exceptions, may not be offered or sold within the United States; (3) the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Offer Shares, was located outside the United States at the time the buy order for the Offer Shares was originated and continues to be located outside the United States and has not purchased the Offer Shares for the account or benefit of any person in the United States or entered into any arrangement for the transfer of the Offer Shares or any economic interest therein to any person in the United States; (4) the purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate; (5) the Offer Shares have not been offered to it by means of any “directed selling efforts” as defined in Regulation S; (6) the purchaser is aware of the restrictions on the offer, sale and transfer of the Offer Shares pursuant to Regulation S and acknowledges that the Company shall not recognise any offer, sale, pledge or other transfer of the Offer Shares made other than in compliance with the above stated restrictions; (7) if it is acquiring any of the Offer Shares as a fiduciary or agent for one or more accounts, the purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account; and (8) the purchaser acknowledges that the Company, the Managers and their respective affiliates will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Each purchaser of the Offer Shares within the United States purchasing pursuant to an exemption from the registration requirements of the U.S. Securities Act will be deemed to have represented and agreed that it has received a copy of this Offering Circular and such other information as it deems necessary to make an informed investment decision and that: (1) the purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all applicable laws and regulations; (2) the purchaser acknowledges that the Offer Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States and are subject to restrictions on transfer; (3) the purchaser: (i) is a qualified institutional buyer (as defined in Rule 144A under the U.S. Securities Act); (ii) is aware that the sale to it is being made in reliance on Rule 144A under the U.S. Securities Act or pursuant to another exemption from, or a transaction not subject to, the registration requirements of the U.S. Securities Act; and (iii) is acquiring such Offer Shares for its own account or for the account of a qualified institutional buyer; (4) the purchaser is aware that the Offer Shares are being offered in the United States in a transaction not involving any public offering in the United States within the meaning of the U.S. Securities Act; (5) if in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Offer Shares, or any economic interest therein, such Offer Shares or any economic interest therein may be offered, sold, pledged or otherwise transferred only: (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A under the U.S. Securities Act; (ii) in compliance with Regulation S under the U.S. Securities Act; or (iii) in accordance with Rule 144 under the U.S. Securities Act (if available), in each case in accordance with any applicable securities laws of any state of the United States or any other jurisdiction; --- (6) the purchaser acknowledges that the Offer Shares are restricted securities within the meaning of Rule 144(a)(3) under the U.S. Securities Act and no representation is made as to the availability of the exemption provided by Rule 144 under the U.S. Securities Act for resale of any Offer Shares; (7) the purchaser will not deposit or cause to be deposited such Offer Shares into any depositary receipt facility established or maintained by a depositary bank other than a Rule 144A restricted depositary receipt facility, so long as such Offer Shares are restricted securities within the meaning of Rule 144(a)(3) under the U.S. Securities Act; (8) the purchaser acknowledges that the Company shall not recognise any offer, sale, pledge or other transfer of the Offer Shares made other than in compliance with the above stated restrictions; (9) if it is acquiring any of the Offer Shares as a fiduciary or agent for one or more accounts, the purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of such account; and (10) the purchaser acknowledges that the Company, the Managers and their respective affiliates will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Each person in a Relevant Member State, other than persons receiving offers contemplated in the English Language Prospectus in Denmark, who receives any communication in respect of, or who acquires any Offer Shares under, the offers contemplated hereby will be deemed to have represented, warranted and agreed to and with each of the Managers, the Selling Shareholders and the Company that: (1) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)I of the Prospectus Directive; and (2) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (i) the Offer Shares acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive and the prior consent of the Joint Global Coordinators has been given to the offer or resale; or (ii) where Offer Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Offer Shares to it is not treated under the Prospectus Directive as having been made to such persons. For the purposes of this provision, the expression an "offer" in relation to any of the Offer Shares in any Relevant Member States means the communication in any form and by any means of sufficient information on the terms of the offer and any Offer Shares to be offered so as to enable an investor to decide to purchase the Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. 234 --- 235 # LEGAL MATTERS Certain legal matters in connection with the Offering will be passed upon for the Company by Davis Polk & Wardwell London LLP, United States legal counsel to the Company, and by Plesner Advokatpartnerselskab, Danish legal counsel to the Company. Certain legal matters in connection with the Offering will be passed upon for the Managers by Latham & Watkins (London) LLP, United States legal counsel to the Managers, and by Kromann Reumert, Danish legal counsel to the Managers. --- 236 # STATE AUTHORISED PUBLIC ACCOUNTANTS The name and address of Netcompany Group A/S and NC TopCo A/S' independent auditors are as follows: Deloitte Statsautoriseret Revisionspartnerselskab Weidekampsgade 6 DK-2300 Copenhagen S Denmark Deloitte Statsautoriseret Revisionspartnerselskab ("Deloitte") is represented by Kim Takata Mücke, State Authorised Public Accountant, and Brian Schmit Jensen, State Authorised Public Accountant, both members of FSR—Danish Auditors (FSR—danske revisorer). # Netcompany Group A/S As the Company, Netcompany Group A/S, was incorporated on 16 April 2018, no accounting history exists for the Company and, consequently, the Company has a complex financial history. Once the IPO Reorganisation is completed (see the section on "Reorganisation" in this Offering Circular), the Company will be the parent company of the Group. Therefore, the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015, which have been audited by the Group's independent auditors, Deloitte, as stated in their report appearing therein, have been included in this Offering Circular. Further, the unaudited condensed consolidated interim financial statements of the Group as of and for the three months ended 31 March 2018 and 2017, which have been reviewed by the Group's independent auditors, Deloitte, as stated in their report appearing therein, are included in this Offering Circular. --- ADDITIONAL INFORMATION Name, Registered Office and Date of Incorporation Netcompany Group A/S Grønningen 17, 1st floor DK-1270 Copenhagen K Denmark Telephone: +45 70 13 14 40 Website: www.netcompany.com The Company was incorporated in Denmark as a public limited liability company under the laws of Denmark on 16 April 2018. The Company does not have any secondary names. The registered office is located in the municipality of Copenhagen at Grønningen 17, 1st floor, DK-1270 Copenhagen K, Denmark. Information on the Group’s website does not form part of and is not incorporated by reference into this Offering Circular. Registration The Company is registered with the Danish Business Authority under registration (CVR) no. 39 48 89 14. Objectives of the Company According to article 2.1 of the Articles of Association, the objects of the Company are to invest in and own shareholdings in other companies and to carry on IT-business and thereto related business. Material Subsidiaries The following table sets forth the Group’s material subsidiaries which are, directly or indirectly, held by NC TopCo A/S, as at the date of this Offering Circular: | Entity Name | Country of Incorporation | Currency | Nominal Share Capital | Percentage of (Direct or Indirect) Ownership Interest and Voting Rights | | --- | --- | --- | --- | --- | | NC NewCo A/S | Denmark | DKK | 10,000,000 | 100% | | Netcompany Holding I A/S (formerly Netcompany A/S) | Denmark | DKK | 553,000 | 100% | | Netcompany UK Ltd (formerly Hunter Macdonald Ltd) | United Kingdom | GBP | 10,869 | 100% | | Netcompany UK Holding Ltd | United Kingdom | GBP | 200 | 100% | | Netcompany Norway AS (formerly Mesan AS) | Norway | NOK | 3,209,486 | 100% | | Netcompany A/S (formerly Netcompany IT and Business Consulting A/S) | Denmark | DKK | 16,000,000 | 100% | | Netcompany Poland Sp. Z o.o. (formerly Netcompany Solutions Sp. Z o.o.) | Poland | PLN | 50,000 | 100% | The Group has selected the material subsidiaries on the basis of a commercial materiality assessment, primarily focusing on (i) where revenue is generated and (ii) where a substantial part of the Group’s assets are held. The material subsidiaries represented 100% of the Group’s total revenue and 99.4% of the Group’s total EBITDA for the three months ended 31 March 2018 and 99.9% of the Group’s total assets as of 31 March 2018. Information Incorporated by Reference No documents are incorporated herein by reference. 237 --- 238 ## General Meetings The general meeting is the ultimate authority in all matters relating to the Company, subject to the limitations in Danish law and the Articles of Association. See “Description of the Shares and Share Capital—General Meetings and Voting Rights”. ## Principal Bankers After completion of the Offering and the Refinancing, the Group’s principal bankers will be Danske Bank A/S, Nordea Danmark, filial of Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial of Skandinaviska Enskilda Banken AB (publ.), Sverige. ## Share Issuing Agent The Company’s share issuing agent is: Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen Denmark --- 239 # GLOSSARY The following explanations are not intended as technical definitions and are provided purely for assistance in understanding certain terms as used in this Offering Circular. "Accordion Option" ... an option under the New Facilities Agreement for the Group to request that the lenders make available additional term loan facilities by up to DKK 400 million "Admission" ... admission of the Shares to trading and official listing on Nasdaq Copenhagen "AICPA" ... American Institute of Certified Public Accountants "Arbejdstilsynet" ... Arbejdstilsynet (Danish Working Environment Authority) "Articles of Association" ... the articles of association of the Company "ATP" ... Arbejdsmarkedets Tillægspension (Danish Pension and Benefits Provider and Administrator) "Audit Committee" ... the audit committee of the Board of Directors, described in “Board of Directors, Executive Management and Key Employees—Board of Directors—Board practices and committees” "Board of Directors" ... the Board of Directors of the Company at any given date "British pound sterling", "GBP" or "£" ... British pound sterling, the lawful currency of the United Kingdom "CAGR" ... compound annual growth rate "CET" ... Central European Time "Chairman" ... the Chairman of the Board of Directors of the Company, Pekka Ala-Pietilä "Clearstream" ... Clearstream Banking, S.A. "Closing Date" ... the date of first utilisation of the Term Loan Facility "Code" ... Internal Revenue Code of 1986, as amended "Combined Financial Statements" ... the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015 "Company" ... Netcompany Group A/S "Condensed Consolidated Interim Financial Statements" ... unaudited condensed interim consolidated financial statements of NC TopCo A/S as of and for the three months ended 31 March 2018, respectively, as included in this Offering Circular "Corporate Governance Recommendations" ... the Recommendations on Corporate Governance of the Danish Committee on Corporate Governance issued on 23 November 2017 "CPH" ... Copenhagen Airports "CRM" ... customer relationship management --- "CSR" Corporate Social Responsibility "Danish Central Bank" Danmarks Nationalbank "Danish Capital Markets Act" Consolidated Act no. 12 of 8 January 2018 on Capital Markets "Danish Companies Act" the Danish Consolidated Act no. 1089 of 14 September 2015 on limited liability companies, as amended "Danish Executive Order on Issuers' Duty to Provide Information" Executive Order no. 1173 of 31 October 2017 on issuers' duty to provide information "Danish Executive Order on Major Shareholders" Executive Order no. 1172 of 31 October 2017 on major shareholders "Danish Executive Order on Prospectuses" Executive Order no. 1176 of 31 October 2017 on prospectuses "Danish Executive Order on Takeover Bids" Executive Order no. 1171 of 31 October 2017 on takeover bids "Danish FSA" Danish Financial Supervisory Authority "Danish Offering" an initial public offering to retail and institutional investors in Denmark "DDoS" distributed denial-of-services, cyber attacks, where the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host connected to the Internet "Deloitte" Deloitte Statsautoriseret Revisionspartnerselskab "Deputy Chairman" the Deputy Chairman of the Board of Directors of the Company, Thomas Broe-Andersen "DESI" Digital Economy and Society Index "DKK" or "Danish kroner" Danish kroner, the lawful currency of Denmark "EBITA" as calculated by the Group, EBITA represents earnings before interest, taxes and amortisation "EBITDA" as calculated by the Group, EBITDA represents earnings before interest, tax, depreciations, amortisations and impairment losses "EEA" European Economic Area "EFI" Et Fælles Inddrivelsessystem, the debt collection system preceding the ICI debt collection system being developed by the Group "English Language Prospectus" a prospectus in English for the purpose of the Danish Offering "ERM" enterprise risk management "ERP" enterprise resource planning "EU" European Union 240 --- "euro", "EUR" or "€" ... euro, the lawful currency of the participating member states in the Third Stage of the European and Monetary Union of the Treaty Establishing the European Community "Euroclear" ... Euroclear Bank S.A./N.A. "Executive Management" ... the executive management of the Company as registered with the Danish Business Authority "Existing Group Shareholders" ... the Significant Shareholders and the other existing shareholders of NC TopCo A/S, including NC ShareCo ApS, the joint holding of certain of the MIP Participants and Employee Shareholders "FLIS" ... Danish municipalities information management system "FSN Capital Partners" ... FSN Capital Partners ApS, acting in its capacity as sub-investment advisor to FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of the Significant Shareholders "FTE" ... full time employees "GDPR" ... the EU General Data Protection Regulation (Regulation (EU) 2016/679) "Group" ... Netcompany Group A/S together with its consolidated subsidiaries, or otherwise as the context may require, for the period from completion of the IPO Reorganisation; and (ii) NC TopCo A/S together with its consolidated subsidiaries, or otherwise as the context may require, for the period prior to completion of the IPO Reorganisation "ICI" ... Integreret Centralt Inddrivelse (Centrally Integrated Collection), a new debt collection system for all debt by citizens to Danish governmental authorities "IFRS" ... International Financial Reporting Standards "International Offering" ... the private placement in the United States only to persons who are "qualified institutional buyers" or "QIBs" (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A and the private placements to institutional investors in the rest of the world "International Offering Circular" ... an Offering Circular in English for use of the international private placement outside of Denmark and the United States "IPO" ... Initial Public Offering "IPO Reorganisation" ... the Company is expected to acquire NC TopCo A/S pursuant to a reorganisation which will result in the Selling Shareholders together with the MIP Participants and Employee Shareholders becoming the owners of the Company, and which will be carried out in connection with pricing and prior to Admission "ISAE" ... International Standard on Assurance Engagements "Issuer Rules of Nasdaq Copenhagen" ... the rules for issuers of shares on Nasdaq Copenhagen of 3 January 2018 "Joint Bookrunner" ... Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige 241 --- "Joint Global Coordinators" Danske Bank A/S, Deutsche Bank AG, London Branch, Morgan Stanley & Co. International plc. "Key Employee" Gustaf Lofberg, Country Manager, Denmark "KOMBIT" Kombit A/S "LTIP Equity Swap" the equity swap entered into by the Group allowing the Company to purchase up to a maximum of 370,370 Offer Shares (the exact number of Offer Shares will correspond to an aggregate value of DKK 50,000,000, divided by the Offer Price) from Danske Bank A/S or alternatively, subject to certain conditions, cash-settle the swap "Managers" the Joint Global Coordinators and the Joint Bookrunner "Market Abuse Regulation" Regulation (EU) no. 596/2014 on Market Abuse "MiFID II" Directive 2014/65/EU on markets in financial instruments, as amended "MiFID II Product Governance Requirements" the product governance requirements contained within MiFID II, Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and local implementing measures "MIP" the previous management incentive programme as described in "Board of Directors, Management and Key Employees—Incentive Programmes—Offering related programmes—Management investment programme (the "MIP")" "MIP Participants and Employee Shareholders" participants in the MIP (including four members of the Board of Directors, a member of the Executive Management and certain other employees, including certain of the previous owners of Mesan AS (renamed to Netcompany Norway AS in March 2018) and Hunter Macdonald Ltd (renamed to Netcompany UK Ltd in January 2018)), who have invested directly or indirectly through individual holding companies or through NC ShareCo ApS, the joint holding company for certain of the MIP participants, and certain other employees, a total of 81 individuals "Motorregistret" Motorregistret (the Danish Register of Motor Vehicles) "Nasdaq Copenhagen" Nasdaq Copenhagen A/S, CVR no. 19 04 26 77 "New Facilities" the facilities made available to the Group by the New Facilities Agreement "New Facilities Agreement" the facilities agreement entered into between the Company, NC TopCo A/S, NC NewCo A/S, Netcompany Holding I A/S and Netcompany A/S and Danske Bank A/S, Nordea Danmark, filial af Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as mandated lead arrangers, and Danske Bank A/S as agent "NI 33-105" National Instrument 33-105 Underwriting Conflicts "Nomination Committee" the nomination committee of the Board of Directors, described in "Board of Directors, Executive Management and Key Employees—Board of Directors—Board practices and committees" 242 --- 243 "NOPLAT" ... net operating profit less adjusted taxes "NPS" ... net promoter score "Offer Period" ... 23 May 2018 to 6 June 2018 at 11:00 a.m. (CET) unless the Offering is closed earlier "Offer Price" ... the price per Offer Share at which the Offer Shares will be sold "Offer Price Range" ... the Offer Price is expected to be between DKK 135 and DKK 165 per Offer Share "Offer Shares" ... 23,000,000 Shares offered by the Selling Shareholders, including any Option Shares (unless the context indicates otherwise) "Offering" ... offering of 20,000,000 Offer Shares of DKK 1 nominal value each "Offering Circular" ... the U.S. Offering Circular, the English Language Prospectus and the International Offering Circular "Option Shares" ... option granted by the Significant Shareholders to the Joint Global Coordinators, on behalf of the Managers, to purchase up to 3,000,000 additional Shares in the aggregate at the Offer Price "Order 2005" ... the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended "OSS" ... open source software "Overallotment Option" ... the option granted the Joint Global Coordinators, on behalf of the Managers, by the Significant Shareholders to purchase additional Shares at the Offer Price "PFIC" ... passive foreign investment company "Post-IPO Reorganisation" ... following Admission and completion of the Offering, and in accordance with the terms of the Reorganisation Agreements, the Company anticipates to procure the completion of certain steps to simplify the corporate structure of the Group "Post-IPO LTIP" ... the post-offering long-term incentive programme as described in "Board of Directors, Executive Management and Key Employees—Incentive programmes" "Matching Shares" ... the Shares granted to the persons participating in the Group's matching shares incentive programme "Prospectus Directive" ... Directive 2003/71/EC of 4 November 2003 (together with any applicable implementing measures in any member state) "Prospectus Regulation" ... Commission Regulation (EC) no. 809/2004 of 29 April 2004, as amended "QIBs" ... qualified institutional buyers "Refinancing" ... the Group's refinancing of certain of its existing indebtedness using a combination of the following facilities: (i) the Term Loan Facility; and (ii) the Revolving Facility, to which drawdowns or funding are subject to the Settlement Date. The New Facilities include an Accordion Option for the Group to request that the lenders make --- available term loan facilities by up to DKK 400 million. The New Facilities are provided for pursuant to the New Facilities Agreement entered into on 7 May 2018, by inter alios the Company, Netcompany A/S and Danske Bank A/S, Nordea Danmark, filial af Nordea Bank AB (publ), Sverige and Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige as mandated lead arrangers, and Danske Bank A/S as agent "Regulation S" ... Regulation S under the U.S. Securities Act "Relevant Member State" ... any Member State of the European Economic Area that has implemented the Prospectus Directive, excluding Denmark "Relevant Persons" ... persons who: (i) are investment professionals falling within Article 19(5); or (ii) falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc."), of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or other persons to whom such investment or investment activity may lawfully be made available "Remuneration Committee" ... the remuneration committee of the Board of Directors, described in "Board of Directors, Executive Management and Key Employees—Board of Directors—Board practices and committees" "Reorganisation Agreements" ... certain reorganisation agreements entered into between the Existing Group Shareholders as well as the shareholders of NC ShareCo ApS and the shareholders of NC ManCo AS in connection with the IPO Reorganisation "Revolving Facility" ... DKK 750 million multicurrency revolving credit facility with a final maturity date of five years after the Settlement Date, which may be utilised in DKK, EUR and any other currency readily available and freely convertible into DKK made available to the Group by the New Facilities Agreement "Rule 144A" ... Rule 144A under the U.S. Securities Act "Safe Harbour Regulation" ... Commission Delegated Regulation (EU) 2016/1052 "Selling Shareholders" ... The Significant Shareholders, André Rogaczewski Holding ApS, Holdingselskabet Claus Jørgensen ApS, Carsten Gomard Holding ApS, NC NorthCo AB, and Danica Pension, Livsforsikringsaktieselskab, and the MIP Participants and Employee Shareholders "Settlement Date" ... the date of payment for and settlement of the Offer Shares is expected to take place on or around 11 June 2018 "Shares" ... the outstanding ordinary shares of the Company "Short Selling Regulation" ... Regulation (EU) 236/2012 of 14 March 2012 on short selling "Significant Shareholders" ... FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP. "Skatteministeriet" ... Skatteministeriet (Danish Ministry of Taxation) "SLA" ... service level agreement "STIL" ... Styrelsen for IT og Læring (National Agency for IT and Learning) 244 --- "STIP" The short-term incentive programme as described in "Board of Directors, Executive Management and Key Employees—Incentive programmes" "Target Market Assessment" The product approval process conducted for the purposes of the MiFID II Product Governance Requirements, which has determined that the Offer Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II "Term Loan Facility" a DKK 750 million term facility with a final maturity date of five years after the Closing Date made available to the Group by the New Facilities Agreement "Treaty" the income tax treaty between Denmark and the United States "U.S." or "United States" United States of America "U.S. dollar" or "$" United States dollar, the lawful currency of the United States of America "U.S. Exchange Act" U.S. Securities Exchange Act of 1934, as amended "U.S. Offering Circular" an Offering Circular in English in connection with the private placement in the United States "U.S. Securities Act" U.S. Securities Act of 1933, as amended "Underwriting Agreements" the two separate underwriting agreements entered into between respectively (i) the Company, certain of the Selling Shareholders and the Managers named below, and (ii) the Company, certain of the Selling Shareholders and Danske Bank A/S, expected to be entered into on 7 June 2018 "VP Securities" VP SECURITIES A/S, CVR no. 21 59 93 36 "VPN" virtual private network 245 --- [THIS PAGE INTENTIONALLY LEFT BLANK] --- FINANCIAL INFORMATION Index of Financial Information Consolidated Interim Financial Statements of NC TopCo A/S and subsidiaries for the three months ended 31 March 2018: Management statement ... F-2 Independent auditors’ review report ... F-3 Statement of comprehensive income for the three months ended 31 March 2018 and 2017 ... F-4 Balance sheets as at 31 March 2018 and 2017 ... F-5 Statement of changes in equity as at 31 March 2018 and 2017 ... F-7 Statement of cash flows for the three months ended 31 March 2018 and 2017 ... F-8 Notes to the consolidated interim financial statements ... F-9 Combined Financial Statements for the financial years ended 31 December 2017, 2016 and 2015: Introduction ... F-14 Management statement ... F-17 Independent auditors’ report ... F-18 Statement of comprehensive income for the years ended 31 December 2017, 2016 and 2015 ... F-20 Balance sheets as at 31 December 2017, 2016 and 2015 ... F-21 Statement of changes in equity as at 31 December 2017, 2016 and 2015 ... F-23 Statement of cash flows for the years ended 31 December 2017, 2016 and 2015 ... F-24 Notes to the combined financial statements ... F-25 F-1 --- Statement by the Board of Directors and Executive Management on the Consolidated Interim Financial Statements of NC TopCo A/S and Subsidiaries for the Three Months period ended 31 March 2018 The Board of Directors and Executive Management have today reviewed and approved the Consolidated Interim Financial Statements of NC TopCo A/S and subsidiaries (the "Group") for the period 1 January – 31 March 2018. The Consolidated Interim Financial Statements for the period 1 January – 31 March 2018 have been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union and the accounting policies set out in the Annual Report 2017 of NC TopCo A/S. In our opinion, the Consolidated Interim Financial Statements give a true and fair view of the Group’s financial position at 31 March 2018 and of the results of the Group’s operations and cash flows for the period 1 January – 31 March 2018 in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union. Copenhagen, 23 May 2018 NC TopCo A/S Board of Directors Pekka Ala-Pietilä Chairman Thomas Broe-Andersen Deputy Chairman Pernille Fabricius Board Member Juha Christensen Board Member Bo Rygaard Board Member Carsten Gomard Board Member Executive Management André Rogaczewski CEO Claus Jørgensen COO Thomas Johansen CFO F-2 --- Independent Auditors' review Report on the Consolidated Interim Financial Statements of NC TopCo A/S and Subsidiaries for the Three Months period ended 31 March 2018 To shareholders and prospective investors We have reviewed the interim consolidated financial statements of NC TopCo A/S and subsidiaries (the "Group") for the period 1 January – 31 March 2018 comprising consolidated statements of income, comprehensive income, cash flows and changes in equity for the period then ended, balance sheet as of 31 March 2018 and selected notes, prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. Management's Responsibility Management of NC TopCo A/S is responsible for the preparation of the interim consolidated financial statements in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union and for such internal control as Management determines is necessary to enable the preparation of the interim consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibilities for the audit of the Consolidated Interim Financial Statements Our responsibility is to express a conclusion on the interim consolidated financial statements based on our review. We conducted our review in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity and additional requirements under Danish audit regulation. This requires us to conclude whether anything has come to our attention that causes us to believe that the interim consolidated financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This also requires us to comply with ethical requirements. A review of interim consolidated financial statements in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity is a limited assurance engagement. The auditor performs procedures, primarily consisting of making inquiries of management and others within the Group, as appropriate, and applying analytical procedures, and evaluates the evidence obtained. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on the interim consolidated financial statements. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim consolidated financial statements are not prepared in all material respects in accordance with IAS 34 "Interim Financial Reporting" as adopted in the European Union. Copenhagen, 23 May 2018 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No 33 96 35 56 Kim Takata Mücke State-Authorised Public Accountant mne10944 Brian Schmit Jensen State-Authorised Public Accountant mne40050 F-3 --- STATEMENT OF COMPREHENSIVE INCOME | | Notes | 1 January – 31 March | | | --- | --- | --- | --- | | | | 2018 | 2017 | | | | DKK million | | | Revenue | | 517.0 | 332.9 | | Cost of services | 5 | (318.8) | (192.3) | | Gross profit | | 198.2 | 140.6 | | Sales and marketing costs | 6 | (2.7) | (2.0) | | Administrative costs | 7 | (67.7) | (42.8) | | Special items | 8 | (7.7) | (0.0) | | Earnings before interest, tax and amortisation (EBITA) (non-IFRS) | | 120.1 | 95.7 | | Amortisation | | (28.8) | (23.9) | | Operating profit (EBIT) | | 91.2 | 71.8 | | Financial income | | 7.1 | 0.4 | | Financial expenses | | (31.8) | (24.2) | | Profit before tax | | 66.5 | 48.0 | | Tax on profit for the period | | (15.3) | (12.1) | | Profit for the period | | 51.2 | 35.9 | | Basic earnings per share (DKK) | | 0.71 | 0.52 | | Diluted earnings per share (DKK) | | 0.71 | 0.52 | | Other comprehensive income | | | | | Items that may be reclassified subsequently to profit or loss | | | | | Cash flow hedging, net fair value gain / (loss) | | 0.3 | (1.4) | | Foreign currency translation subsidiaries | | (2.3) | (2.0) | | Change in deferred cost of hedging | | 3.5 | 3.7 | | Tax on other comprehensive income | | (0.8) | (1.1) | | Other comprehensive income | | 0.6 | 2.1 | | Comprehensive income for the period | | 51.8 | 38.0 | F-4 --- BALANCE SHEET | | Notes | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | --- | | | | DKK million | | | | Goodwill | | 2,108.7 | 1,883.9 | 2,108.7 | | Other intangible assets | | 465.2 | 463.6 | 495.2 | | Intangible assets | | 2,573.9 | 2,347.5 | 2,603.9 | | Leasehold improvements | | 4.3 | 3.1 | 3.9 | | Equipment | | 20.8 | 15.4 | 20.0 | | Right of use assets | | 26.9 | 25.2 | 30.5 | | Property, plant and equipment | | 52.0 | 43.8 | 54.5 | | Other receivables | | 9.9 | 6.4 | 8.8 | | Deferred tax assets | | 0.7 | 0.2 | 0.0 | | Financial assets | | 10.6 | 6.6 | 8.8 | | Non-current assets | | 2,636.4 | 2,397.9 | 2,667.2 | | Trade receivables | 10 | 318.7 | 193.6 | 445.4 | | Contract work in progress | | 301.6 | 170.7 | 139.2 | | Other receivables | | 9.3 | 2.2 | 11.0 | | Prepayments | | 6.6 | 6.0 | 12.3 | | Receivables | | 636.1 | 372.4 | 607.8 | | Cash | | 154.2 | 71.2 | 194.5 | | Current assets | | 790.4 | 443.7 | 802.3 | | Assets | | 3,426.8 | 2,841.5 | 3,469.5 | F-5 --- BALANCE SHEET | | Notes | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | --- | | | | DKK million | | | | Share capital | | 71.7 | 69.4 | 71.6 | | Cash flow hedging reserve | | (29.8) | (38.7) | (30.0) | | Foreign currency translation reserve | | (5.2) | (2.1) | (2.9) | | Deferred cost of hedging reserve | | 13.1 | 20.9 | 10.4 | | Retained earnings | | 1,652.8 | 1,252.8 | 1,594.8 | | Equity | | 1,702.6 | 1,302.3 | 1,643.9 | | Borrowings | 11 | 1,167.3 | 1,175.7 | 1,264.9 | | Leasing | | 15.0 | 13.6 | 17.6 | | Deferred tax liability | | 116.9 | 106.1 | 112.4 | | Non-current liabilities | | 1,299.2 | 1,295.4 | 1,394.9 | | Borrowings | 11 | 0.0 | 0.6 | 0.0 | | Leasing | | 12.8 | 11.7 | 13.6 | | Prepayments received from customers | | 46.2 | 19.5 | 36.2 | | Trade payables | | 54.3 | 16.9 | 50.6 | | Other payables | 12 | 199.9 | 157.7 | 223.1 | | Provisions | 13 | 30.4 | 2.5 | 30.4 | | Income tax payable | | 81.4 | 34.8 | 76.8 | | Current liabilities | | 425.0 | 243.8 | 430.7 | | Liabilities | | 1,724.2 | 1,539.2 | 1,825.6 | | Equity and liabilities | | 3,426.8 | 2,841.5 | 3,469.5 | F-6 --- STATEMENT OF CHANGES IN EQUITY | | Share capital | Fair value adjustment of interest rate swap | Exchange differences on translating foreign subsidiaries | Deferred cost of hedging reserve | Retained earnings | Total | | --- | --- | --- | --- | --- | --- | --- | | | | | DKK million | | | | | Equity at 1 January 2017 | 69.3 | (39.8) | (0.1) | 18.0 | 1,213.1 | 1,260.5 | | Capital increase | 0.1 | 0.0 | 0.0 | 0.0 | 3.8 | 3.9 | | Profit for the period | 0.0 | 0.0 | 0.0 | 0.0 | 35.9 | 35.9 | | Other comprehensive income for the period | 0.0 | 1.1 | (2.0) | 2.9 | 0.0 | 2.1 | | Equity at 31 March 2017 | 69.4 | (38.7) | (2.1) | 20.9 | 1,252.8 | 1,302.3 | | Equity at 1 January 2018 | 71.6 | (30.0) | (2.9) | 10.4 | 1,594.8 | 1,643.9 | | Capital increase | 0.1 | 0.0 | 0.0 | 0.0 | 6.8 | 6.9 | | Profit for the period | 0.0 | 0.0 | 0.0 | 0.0 | 51.2 | 51.2 | | Other comprehensive income for the period | 0.0 | 0.2 | (2.3) | 2.7 | 0.0 | 0.6 | | Equity at 31 March 2018 | 71.7 | (29.8) | (5.2) | 13.1 | 1,652.8 | 1,702.6 | | Equity at 1 January 2017 | 69.3 | (39.8) | (0.1) | 18.0 | 1,213.1 | 1,260.5 | | Capital increase | 2.3 | 0.0 | 0.0 | 0.0 | 240.0 | 242.4 | | Profit for the year | 0.0 | 0.0 | 0.0 | 0.0 | 141.6 | 141.6 | | Other comprehensive income/(loss) for the year | 0.0 | 9.8 | (2.8) | (7.6) | 0.0 | (0.6) | | Equity at 31 December 2017 | 71.6 | (30.0) | (2.9) | 10.4 | 1,594.8 | 1,643.9 | F-7 --- CASH FLOW STATEMENT | | Notes | 1 January – 31 March | | | --- | --- | --- | --- | | | | 2018 | 2017 | | | | DKK million | | | Operating profit (EBIT) | | 91.2 | 71.8 | | Depreciation and amortisation | | 38.5 | 27.7 | | Working capital changes | | (35.0) | (20.7) | | Free cash flow | | 94.7 | 78.9 | | Income taxes paid | | (10.4) | (19.4) | | Financial income received | | 1.1 | 0.3 | | Financial expenses paid | | (14.3) | (15.9) | | Cash flows from operating activities | | 71.1 | 43.8 | | Acquisition of property, plant and equipment | | (3.5) | (4.9) | | Other receivables (deposits) | | (1.1) | 0.0 | | Cash flows from investing activities | | (4.6) | (4.9) | | Cash proceeds from issue of share capital | | 6.9 | 3.9 | | Repayment of borrowings | 11 | (114.7) | (3.9) | | Cash flows from financing activities | | (107.7) | 0.0 | | Increase in cash and cash equivalents | | (41.2) | 38.9 | | Cash and cash equivalents at 1 January | | 194.5 | 32.0 | | Effect of exchange rate changes on the balance of cash held in foreign currencies | | 1.0 | (0.2) | | Cash and cash equivalents at 31 March | | 154.2 | 70.7 | Reconciliation of liabilities arising from financing activities | | 1 January – 31 March 2018 | | | | | --- | --- | --- | --- | --- | | | Borrowings | Leasing | Interest rate and currency swaps fair value | Total | | | DKK million | | | | | Opening balance 1 January 2018 | 1,264.9 | 31.2 | 28.0 | 1,324.1 | | Financing obtained | — | — | — | — | | Repayment | (108.9) | (5.8) | — | (114.7) | | Fair value adjustments (non-cash) | — | — | (2.8) | (2.8) | | Leasing (non-cash) | — | 2.4 | — | 2.4 | | Amortisation loan costs (non-cash) | 6.6 | — | — | 6.6 | | Acquired entities (non-cash) | — | — | — | — | | Exchange rate adjustments (non-cash) | 4.6 | — | — | 4.6 | | Closing balance 31 March 2018 | 1,167.3 | 27.8 | 25.2 | 1,220.3 | F-8 --- NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Accounting policies The interim consolidated financial statements for the period 1 January – 31 March has been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union. The accounting policies applied for period 1 January – 31 March 2018 are consistent with those applied in the consolidated annual financial statements for 2017. Please refer to F-pages covering the combined financial statements for 2015, 2016 & 2017, pages F-25 to F-26. 2. Significant accounting estimates, assumptions and uncertainties Please refer to F-pages covering the combined financial statements for 2015, 2016 & 2017, pages F-27 to F-30. 3. Effect of the change in accounting policies No changes in accounting policies has been adopted during the period. 4. Segment information 1 January – 31 March | Strategic business areas | Description | Operating segments | Geographic segments | | --- | --- | --- | --- | | Public | Public companies or companies acting as a public company seen from a business aspect. | Denmark, Norway & United Kingdom | Denmark, Norway, United Kingdom, Poland & Vietnam | | Private | All other companies | Denmark, Norway & United Kingdom | Denmark, Norway, United Kingdom, Poland & Vietnam | | Strategic business area | Public 2018 | Private 2018 | Total 2018 | | | | DKK million | | | Development Revenue | 128.0 | 95.2 | 223.2 | | Maintenance Revenue | 157.8 | 136.1 | 293.8 | | Total Revenue | 285.8 | 231.2 | 517.0 | | EBITA (non-IFRS) | 60.5 | 59.6 | 120.1 | | Strategic business area | Public 2017 | Private 2017 | Total 2017 | | | | DKK million | | | Development Revenue | 87.6 | 53.1 | 140.6 | | Maintenance Revenue | 65.0 | 127.2 | 192.3 | | Total Revenue | 152.6 | 180.3 | 332.9 | | EBITA (non-IFRS) | 32.8 | 62.9 | 95.7 | F-9 --- 1 January – 31 March | Segment information related to operating entities | Denmark 2018 | Norway 2018 | United Kingdom 2018 | Other 2018 | Total 2018 | | --- | --- | --- | --- | --- | --- | | | DKK million | | | | | | Revenue from external customers | 397.3 | 42.6 | 77.1 | — | 517.0 | | EBITA, operating entities (non-IFRS) | 106.0 | 9.0 | 5.1 | — | 120.1 | | Allocated cost | 0.4 | (1.5) | (0.0) | 1.2 | 0.0 | | EBITA, reported in legal entities (non-IFRS) | 106.3 | 7.5 | 5.1 | 1.2 | 120.1 | | Segment information related to operating entities | Denmark 2017 | Norway 2017 | United Kingdom 2017 | Other 2017 | Total 2017 | | | DKK million | | | | | | Revenue from external customers | 297.8 | 35.1 | — | — | 332.9 | | EBITA, operating entities (non-IFRS) | 87.9 | 7.8 | — | — | 95.7 | | Allocated cost | (11.9) | 1.5 | — | 10.4 | — | | EBITA, reported in legal entities (non-IFRS) | 76.0 | 9.3 | — | 10.4 | 95.7 | 1 January – 31 March | Segment information related to geographical areas | Denmark 2018 | Norway 2018 | Poland 2018 | United Kingdom 2018 | Vietnam 2018 | Total 2018 | | --- | --- | --- | --- | --- | --- | --- | | | DKK million | | | | | | | Revenue from external customers | 396.6 | 42.9 | — | 77.5 | — | 517.0 | | Revenue from internal sales | 8.1 | — | 36.2 | — | 5.0 | 0.0 | | Revenue, geographical areas (non-IFRS) | 404.7 | 42.9 | 36.2 | 77.5 | 5.0 | 517.0 | | EBITA, geographical areas (non-IFRS) | 95.0 | 7.5 | 12.1 | 5.1 | 0.4 | 120.1 | | Allocated cost | 11.0 | 1.5 | (12.1) | 0.0 | (0.4) | 0.0 | | EBITA, geographical areas (non-IFRS) | 106.0 | 9.0 | — | 5.1 | — | 120.1 | | Segment information related to geographical areas | Denmark 2017 | Norway 2017 | Poland 2017 | United Kingdom 2017 | Vietnam 2017 | Total 2017 | | | DKK million | | | | | | | Revenue from external customers | 297.8 | 35.1 | — | — | — | 332.9 | | Revenue from internal sales | 1.6 | — | 24.3 | — | — | 0.0 | | Revenue, geographical areas (non-IFRS) | 299.4 | 35.1 | 24.3 | — | — | 332.9 | | EBITA, geographical areas (non-IFRS) | 75.5 | 9.3 | 10.9 | — | — | 95.7 | | Allocated cost | 12.4 | (1.5) | (10.9) | — | — | 0.0 | | EBITA, geographical areas (non-IFRS) | 87.9 | 7.8 | — | — | — | 95.7 | 5. Costs of services | | 1 January – 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million | | | Project costs | 102.4 | 31.1 | | Staff costs | 213.5 | 158.5 | | Depreciation | 2.8 | 2.7 | | Total costs of services | 318.8 | 192.3 | F-10 --- F-11 # 6. Sales and marketing costs | | 1 January – 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million | | | Sales and marketing costs | 1.7 | 1.5 | | Staff costs | 1.0 | 0.5 | | Total sales and marketing costs | 2.7 | 2.0 | # 7. Administrative costs | | 1 January – 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million | | | Administrative costs | 37.9 | 28.4 | | Staff costs | 23.0 | 13.2 | | Depreciation | 6.8 | 1.2 | | Total administrative costs excl. amortisation | 67.7 | 42.8 | # 8. Special items | | 1 January – 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million | | | Acquisition related costs | 1.0 | 0.0 | | Offer-related costs | 6.7 | 0.0 | | Total special items | 7.7 | 0.0 | # 9. Income Statement classified by function | | 1 January – 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million | | | Revenue | 517.0 | 332.9 | | Cost of services, including depreciation and amortisation | (318.8) | (192.3) | | Gross profit | 198.2 | 140.6 | | Sales and marketing costs, including depreciation and amortisation | (2.7) | (2.0) | | Administrative costs, including depreciation and amortisation | (104.2) | (66.7) | | Operating profit (EBIT) | 91.2 | 71.8 | | Financial income | 7.1 | 0.4 | | Financial expenses | (31.8) | (24.2) | | Profit before tax | 66.5 | 48.0 | | Tax on profit for the period | (15.3) | (12.1) | | Profit for the period | 51.2 | 35.9 | | Depreciation and Amortisation have been presented as follows in the income statement: | | | | Cost of services | 2.8 | 2.7 | | Sales and marketing costs | 0.0 | 0.0 | | Administrative costs | 35.6 | 25.1 | | Depreciation and amortisation | 38.4 | 27.8 | --- F-12 # 10. Trade receivables | | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | | | DKK million | | | | Trade receivables | 318.7 | 193.6 | 445.4 | The carrying amount of trade receivables is assumed to be equal to the fair value: | | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | | | DKK million | | | | Aging of receivables that are not impaired | | | | | Not due | 197.5 | 148.0 | 314.9 | | Until 30 days | 80.6 | 26.4 | 75.0 | | Between 30 and 90 days | 16.1 | 3.9 | 34.7 | | More than 90 days | 24.5 | 15.3 | 20.8 | | Total trade receivables | 318.7 | 193.6 | 445.4 | The Group is continuously conducting individual assessment of potential bad debts. Historically, credit losses experienced by the Group has been insignificant, and no indications of changes in the level of credit losses in the future have been identified. Consequently, allowances for credit losses at 31 March 2018 (31 March 2017 and 31 December 2017) are insignificant. # 11. Borrowings Borrowings has been presented as follows in the balance sheet: | | | | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | --- | --- | | | | | DKK million | | | | Non-current liability | | | 1,167.3 | 1,175.7 | 1,264.9 | | Current liability | | | 0.0 | 0.6 | 0.0 | | Total borrowings | | | 1,167.3 | 1,176.3 | 1,264.9 | | | Currency | Maturity | Fixed or floating interest | Loan costs | Nominal value | Fair value | | --- | --- | --- | --- | --- | --- | --- | | | | | | | DKK million | | | Bank loan | EUR | 2023 | Floating | 26.4 | 1,106.1 | 1,079.7 | | Bank loan | DKK | 2023 | Floating | 4.4 | 92.0 | 87.6 | | Total borrowings 31 March 2018 | | | | 30.8 | 1,198.1 | 1,167.3 | | Bank loan | EUR | 2023 | Floating | 31.0 | 1,104.1 | 1,073.1 | | Bank loan | NOK | 2023 | Floating | 11.3 | 114.0 | 102.7 | | Total borrowings 31 March 2017 | | | | 42.3 | 1,218.0 | 1,175.7 | | Bank loan | EUR | 2023 | Floating | 27.6 | 1.105.1 | 1,077.6 | | Bank loan | NOK | 2023 | Floating | 5.2 | 105.2 | 100.0 | | Bank loan | DKK | 2023 | Floating | 4.6 | 92.0 | 87.4 | | Total borrowings 31 December 2017 | | | | 37.4 | 1,302.3 | 1,264.9 | The fair value of bank loans is deemed to approximate the nominal value of the loans. The carrying value of the loans is based on the amortised cost method and upon initial recognition recognised at the loan proceeds received less cost to obtain the loans. The loan costs are amortised over the life of the loans based on the effective interest rate method. The repayment profile for the bank debt is conditional on the Group complying with certain financial ratios (covenants). For the period 1 January – 31 March 2018 the Group complied with the covenants defined. According to the loan agreement, all distribution of dividends has to be approved by the lender. --- F-13 # 12. Other payables | | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | | | DKK million | | | | Interest and currency rate swaps stated at fair value | 25.2 | 26.7 | 28.0 | | Wages and salaries, payroll taxes, social security costs, etc. payable | 14.1 | 17.7 | 39.3 | | Holiday pay obligation | 89.7 | 65.9 | 70.6 | | VAT and duties | 42.1 | 26.8 | 57.6 | | Other costs payable | 28.8 | 20.4 | 27.6 | | Total other payables | 199.9 | 157.7 | 223.1 | # 13. Provisions | | 31 March 2018 | 31 March 2017 | 31 December 2017 | | --- | --- | --- | --- | | | DKK million | | | | Onerous contracts and warranty obligations at 1 January | 30.4 | 8.9 | 8.9 | | Used in the period | 0.0 | (6.4) | (6.4) | | Provisions for the period | 0.0 | 0.0 | 27.9 | | Onerous contracts and warranty obligations at end of period | 30.4 | 2.5 | 30.4 | # 14. Collateral provided and contingent liabilities There have been no changes in collateral provided and contingent liabilities during 1 January – 31 March 2018 compared to the combined financial statements as of 31 December 2017. # 15. Related party transactions - Related parties with a controlling interest FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP (jointly referred to as the "Significant Shareholders"). - Transactions with related parties The Group has had the following transactions with other companies controlled by the Significant Shareholders: | | 1 January – 31 March | | | --- | --- | --- | | | 2018 | 2017 | | | DKK million | | | Revenue | 2.5 | 0.3 | --- # Introduction The Company was formed on 16 April 2018 for the purpose of acquiring NC TopCo A/S (the ultimate parent holding company of the Group prior to the effectiveness of the IPO Reorganisation) in connection with the IPO Reorganisation, pursuant to which the Existing Group Shareholders will become shareholders in the Company, through a series of share exchanges. The Company does not have any material assets or liabilities and will not conduct any operating activities prior to the effectiveness of the IPO Reorganisation and have a financial history. NC TopCo A/S was formed on 14 December 2015 and prepared stand-alone financial statements for the period 14 – 31 December 2015 without any activities. On 1 February 2016, NC TopCo A/S acquired the entire share capital of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) (through the intermediary holding company; NC NewCo A/S), hence the published consolidated financial statements for 2016 for NC TopCo A/S and subsidiaries, cover operations for the period 1 February – 31 December 2016. In addition, NC TopCo A/S has published consolidated financial statements for 2017. Also NC TopCo A/S is as such not able to present a meaningful full three-year financial history. Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) has existed for a number of years and a full three-year financial history exist for Netcompany A/S and its subsidiaries. # Combined financial statements To present a full meaningful three-year financial history, the Group presents the financial information set out on pages F-20-F-49 as combined financial statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as of and for the years ended 31 December 2017, 2016 and 2015, prepared as follows: ## 2015 The audited consolidated financial statements for 2015 for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries was prepared in accordance with the Danish Financial Statements Act and approved by the executive management and board of directors of Netcompany A/S on 29 January 2016. The consolidated figures for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) used in the combined financial statements derive from the consolidated financial statements for 2016 where Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) prepared its consolidated financial statements in accordance with IFRS as adopted by the EU including restated figures for 2015. The audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) for 2016 was approved by the executive management and board of directors of Netcompany A/S on 23 February 2017. In the income statement for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries for 2015, cost items were presented based on their nature. In the combined financial statements, cost item are presented based on their function. Comparative figures have been changed accordingly. ## 2016 In the statement of comprehensive income and in the cash flow statement for 2016, the financial figures for January 2016 have been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries, whereas for the period 1 February to 31 December 2016 the financial figures have been derived from the audited consolidated financial statements for NC TopCo A/S. The consolidated balance sheet as of 31 December 2016 is identical with the audited consolidated balance sheet for NC TopCo A/S. The Statement of Changes in Equity for 2016 has been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries and combined with NC TopCo A/S as of 1 February 2016. The consolidated financial statements of NC TopCo A/S for 2016 was prepared and approved by the executive management and board of directors of NC TopCo A/S on 23 February 2017, and the consolidated financial statements of Netcompany A/S was prepared and approved by the executive management and board of directors of Netcompany A/S on 23 February 2017. F-14 --- The compilation of the statement of comprehensive income and the cash flow statement for 2016 can be summarized as follows: | Statement of Comprehensive income | 2016 | | | | --- | --- | --- | --- | | | Netcompany A/S January | NC TopCo A/S Feb.-Dec. | Combined Full year | | | DKK million | | | | Revenue | 71.1 | 828.5 | 899.6 | | Cost of services | (34.6) | (492.4) | (527.0) | | Gross profit | 36.5 | 336.1 | 372.6 | | Sales and marketing costs | (0.4) | (3.3) | (3.7) | | Administrative costs | (19.7) | (101.2) | (120.9) | | Special items | 0.0 | (35.1) | (35.1) | | Earnings before interest, taxes and amortisation (EBITA) (non-IFRS) | 16.4 | 196.5 | 212.9 | | Amortisation | 0.0 | (73.8) | (73.8) | | Operating profit (EBIT) | 16.4 | 122.7 | 139.1 | | Financial income | 0.1 | 1.3 | 1.4 | | Financial expenses | (0.4) | (63.7) | (64.1) | | Profit before tax | 16.1 | 60.3 | 76.4 | | Tax on profit for the year | (0.1) | (43.6) | (43.6) | | Profit for the year | 16.0 | 16.7 | 32.8 | | Other comprehensive income | | | | | Items that may be reclassified subsequently to profit or loss | | | | | Cash flow hedging, net fair value gain / (loss) | 0.0 | (51.0) | (51.0) | | Foreign currency translation subsidiaries | 0.0 | (0.1) | (0.1) | | Change in deferred cost of hedging | 0.0 | 23.1 | 23.1 | | Tax on other comprehensive income | 0.0 | 6.2 | 6.2 | | Other comprehensive income / (loss) | 0.0 | (21.9) | (21.9) | | Comprehensive income for the year / (loss) | 16.0 | (5.1) | 10.8 | | Cash flow statement | 2016 | | | | | Netcompany A/S January | NC TopCo A/S Feb.-Dec. | Combined Full year | | | DKK million | | | | Operating profit (EBIT) | 16.4 | 122.7 | 139.1 | | Depreciation and amortisation | 0.0 | 94.2 | 94.2 | | Working capital changes | 32.9 | (52.6) | (19.6) | | Free cash flow | 49.3 | 164.3 | 213.6 | | Financial income received | 0 | 1.3 | 1.3 | | Financial expenses paid | (0.4) | (63.7) | (64.1) | | Income taxes paid | (0.1) | (33.9) | (34.0) | | Cash flows from operating activities | 48.8 | 68.1 | 116.9 | | Net cash outflow on acquisition of subsidiaries | 0.0 | (2,516.1) | (2,516.1) | | Acquisition of property, plant and equipment | 0.6 | (13.5) | (13.0) | | Acquisition of intangible assets | (0.9) | (8.3) | (9.2) | | Other receivables (deposits) | 0.0 | (1.5) | (1.5) | | Cash flows from investing activities | (0.3) | (2,539.4) | (2,539.7) | | Cash proceeds from issue of share capital | 0.0 | 1,265.1 | 1,265.1 | | Cash proceeds from borrowings | 0.0 | 1,178.0 | 1,178.0 | | Repayment of borrowings | 0.6 | (11.6) | (11.0) | | Dividend paid to previous shareholder of Netcompany A/S | (116.4) | 0.0 | (116.4) | | Cash flows from financing activities | (115.8) | 2,431.5 | 2,315.7 | | Increase/(decrease) in cash and cash equivalents | (67.3) | (39.7) | (107.0) | | Cash and cash equivalents at 1 January | 111.5 | 0.0 | 111.5 | | Cash and cash equivalents balances acquired | 0.0 | 27.6 | 27.6 | | Effect of exchange rate changes on the balance of cash held in foreign currencies | 0.0 | (0.1) | (0.1) | | Cash and cash equivalents at 31 December | 44.2 | (12.2) | 32.0 | --- 2017 The financial information for 2017 represents the audited consolidated figures for NC TopCo A/S and subsidiaries, which was prepared and approved by the executive management and board of directors of NC TopCo A/S on 5 March 2018. ## Basis of preparation of combined financial statements The combined financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements. The combined financial statements have been prepared in the same format as the consolidated financial statements for 2017 for NC TopCo A/S. The combined financial statements was prepared and approved by the Executive Management and the Board of Directors on 23 May 2018. Deloitte Statsautoriseret Revisionspartnerselskab has audited all underlying financial statements forming basis for the combined financial statements and provided them all with unmodified opinions dated 29 January 2016 for the consolidated financial statements of Netcompany A/S for 2015, dated 23 February 2017 for the consolidated financial statements for 2016 for NC TopCo A/S and dated 23 February 2017 for the consolidated financial statements for 2016 for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and dated 5 March 2018 for the consolidated financial statements for 2017 for NC TopCo A/S, respectively. In addition, Deloitte Statsautoriseret Revisionspartnerselskab has provided the combined financial statements with an unmodified opinion dated 23 May 2018. The combined financial statements in 2016 reflect a change in accounting entity from Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) to NC TopCo A/S in connection with NC TopCo A/S acquiring Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) as of 1 February 2016. The acquisition has been accounted for in accordance with IFRS 3 "Business combinations", which among other things resulted in the recognition of intangible assets, which are subject to annual amortization beginning from 1 February 2016. In addition, part of the purchase price was financed with bank borrowings, whereby the income statement is also impacted by increased financing costs from 1 February 2016. These matters should be noted when comparing the 2015 figures with 2016 and 2017. F-16 --- F-17 # Statement by the Board of Directors and Executive Management on the Combined Financial Statements The Executive Management and the Board of Directors have today reviewed and approved the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) (“the Group”) for 2017, 2016 and 2015 prepared solely for the purposes of this Offering Circular as further outlined in the introduction to “Financial Information” on page F-14 and Note 1 on page F-25, which describes the background and basis for preparing Combined Financial Statements. The Combined Financial Statements comprise statement of comprehensive income, balance sheet, statements of changes in equity and cash flows and notes, prepared in accordance with International Financial Reporting Standards as adopted by the EU. In our opinion, the accounting policies applied are appropriate and the Combined Financial Statements give a true and fair view of the Group’s financial position at 31 December 2017, 2016 and 2015 and of the results of their operations and cash flows for 2017, 2016 and 2015 in accordance with International Financial Reporting Standards as adopted by the EU. Copenhagen, 23 May 2018 NC TopCo A/S Board of Directors Pekka Ala-Pietilä Chairman Thomas Broe-Andersen Deputy Chairman Pernille Fabricius Board Member Juha Christensen Board Member Bo Rygaard Board Member Carsten Gomard Board Member Executive Management André Rogaczewski CEO Claus Jørgensen COO Thomas Johansen CFO --- Independent Auditors' Report on the Combined Financial Statements To shareholders and prospective investors We have audited the Combined Financial Statements of NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) ("the Group") as outlined in Note 1, which describes the background and basis for preparing Combined Financial Statements. The Combined Financial Statements of the Group comprise the combined balance sheets as at 31 December 2017, 2016 and 2015, the combined statements of comprehensive income, changes in cash flows and equity for the years then ended, and notes, comprising a summary of significant accounting policies and disclosure notes. The Combined Financial Statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act. In our opinion, the Combined Financial Statements give a true and fair view of the Group's financial position at 31 December 2017, 2016 and 2015 and of the results of the Group's operations and cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's responsibilities for the audit of the Combined Financial Statements. We are independent of the Group in accordance with the International Ethics Standards Board of Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Basis of preparation Without modifying our opinion, we draw attention to note 1, which describe the basis for preparing the Combined Financial Statements in connection with an initial public offering. As a result, the Combined Financial Statements may not be suitable for another purpose. Management's Responsibility Management of NC TopCo A/S is responsible for the preparation of the Combined Financial Statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of the Combined Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Combined Financial Statements, Management is responsible for assessing the Group's ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the Combined Financial Statements unless Management either intends to liquidate the Group or to cease operations or has no realistic alternative but to do so. Auditor's responsibilities for the audit of the Combined Financial Statements Our objectives are to obtain reasonable assurance about whether the Combined Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Combined Financial Statements. F-18 --- As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the Combined Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. - Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the Combined Financial Statements, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Combined Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the Combined Financial Statements, including the disclosures in the notes, and whether the Combined Financial Statements represent the underlying transactions and events in a manner that gives a true and fair view. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Combined Financial Statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Copenhagen, 23 May 2018 Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No 33 96 35 56 Kim Takata Mücke State-Authorised Public Accountant mne10944 Brian Schmit Jensen State-Authorised Public Accountant mne40050 F-19 --- STATEMENT OF COMPREHENSIVE INCOME | | Notes | 31 December | | | | --- | --- | --- | --- | --- | | | | 2017 | 2016 | 2015 | | | | DKK million | | | | Revenue | | 1,416.1 | 899.6 | 758.1 | | Cost of services | 5 | (803.4) | (527.0) | (446.8) | | Gross profit | | 612.7 | 372.6 | 311.3 | | Sales and marketing costs | 6 | (9.7) | (3.7) | (3.8) | | Administrative costs | 7 | (201.0) | (120.9) | (100.1) | | Special items | 9 | (32.9) | (35.1) | 0.0 | | Earnings before interest, tax and amortisation (EBITA) (non-IFRS) | | 369.0 | 212.9 | 207.4 | | Amortisation | 10 | (95.9) | (73.8) | 0.0 | | Operating profit (EBIT) | | 273.2 | 139.1 | 207.4 | | Financial income | 11 | 10.2 | 1.4 | 3.4 | | Financial expenses | 11 | (82.3) | (64.1) | (3.2) | | Profit before tax | | 201.0 | 76.4 | 207.6 | | Tax on profit for the year | 12 | (59.4) | (43.6) | (19.8) | | Profit for the year | | 141.6 | 32.8 | 187.8 | | Basic earnings per share (DKK)* | | 2.03 | 0.25 | | | Diluted earnings per share (DKK)* | | 2.03 | 0.25 | | | Other comprehensive income | | | | | | Items that may be reclassified subsequently to profit or loss | | | | | | Cash flow hedging, net fair value gain / (loss) | | 12.5 | (51.0) | 0.0 | | Foreign currency translation subsidiaries | | (2.9) | (0.1) | 0.0 | | Change in deferred cost of hedging | | (9.7) | 23.1 | 0.0 | | Tax on other comprehensive income | | (0.6) | 6.2 | 0.0 | | Other comprehensive income / (loss) | | (0.7) | (21.9) | 0.0 | | Comprehensive income for the year | | 141.0 | 10.8 | 187.8 | * Basic and diluted earnings per share have been presented only for the periods where NC TopCo A/S has been the majority shareholder of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) starting from 1 February 2016. Hence the calculation for 2016 only includes the period 1 February – 31 December. The share capital structure of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) was substantially different from the share capital structure of NC TopCo A/S and basic and diluted earnings per share for the periods prior to 1 February 2016 are not comparable to the basic and diluted earnings per share for the periods starting from 1 February 2016. F-20 --- BALANCE SHEET | | Notes | 31 December | | | | --- | --- | --- | --- | --- | | | | 2017 | 2016 | 2015 | | | | DKK million | | | | Goodwill | 14 | 2,108.7 | 1,883.9 | 0.0 | | Other intangible assets | 14 | 495.2 | 488.7 | 4.1 | | Intangible assets | | 2,603.9 | 2,372.5 | 4.1 | | Leasehold improvements | 15 | 3.9 | 2.2 | 2.1 | | Equipment | 15 | 20.0 | 14.0 | 6.4 | | Right of use assets | 15 | 30.5 | 25.2 | 11.9 | | Property, plant and equipment | | 54.5 | 41.5 | 20.4 | | Other receivables | | 8.8 | 5.4 | 4.0 | | Deferred tax assets | 12 | 0.0 | 0.2 | 11.0 | | Financial assets | | 8.8 | 5.6 | 15.0 | | Non-current assets | | 2,667.2 | 2,419.6 | 39.5 | | Trade receivables | 16 | 445.4 | 258.2 | 180.3 | | Contract work in progress | 17 | 139.2 | 110.5 | 80.9 | | Receivables from group enterprises | | 0.0 | 0.0 | 97.7 | | Other receivables | | 11.0 | 6.8 | 1.0 | | Prepayments | | 12.3 | 5.3 | 5.2 | | Receivables | | 607.8 | 380.8 | 365.1 | | Cash | 18 | 194.5 | 60.0 | 111.5 | | Current assets | | 802.3 | 440.8 | 476.6 | | Assets | | 3,469.5 | 2,860.4 | 516.1 | F-21 --- BALANCE SHEET | | Notes | 31 December | | | | --- | --- | --- | --- | --- | | | | 2017 | 2016 | 2015 | | | | DKK million | | | | Share capital | 19 | 71.6 | 69.3 | 0.6 | | Cash flow hedging reserve | | (30.0) | (39.8) | 0.0 | | Foreign currency translation reserve | | (2.9) | (0.1) | 0.0 | | Deferred cost of hedging reserve | | 10.4 | 18.0 | 0.0 | | Retained earnings | | 1,594.8 | 1,213.1 | 299.8 | | Equity | | 1,643.9 | 1,260.5 | 300.4 | | Borrowings | 20 | 1,264.9 | 1,178.0 | 0.0 | | Leasing | 20 | 17.6 | 13.6 | 6.1 | | Deferred tax liability | 12 | 112.4 | 111.2 | 0.0 | | Non-current liabilities | | 1,394.9 | 1,302.8 | 6.1 | | Borrowings | 20 | 0.0 | 28.0 | 0.0 | | Leasing | 20 | 13.6 | 11.7 | 5.8 | | Prepayments received from customers | 17 | 36.2 | 27.5 | 27.2 | | Trade payables | | 50.6 | 26.8 | 18.6 | | Payables to group enterprises | | 0.0 | 0.0 | 52.1 | | Other payables | 21 | 223.1 | 163.3 | 80.0 | | Provisions | 22 | 30.4 | 8.9 | 5.0 | | Income tax payable | 12 | 76.8 | 31.0 | 20.9 | | Current liabilities | | 430.7 | 297.1 | 209.6 | | Liabilities | | 1,825.6 | 1,599.9 | 215.7 | | Equity and liabilities | | 3,469.5 | 2,860.4 | 516.1 | F-22 --- STATEMENT OF CHANGES IN EQUITY | | Share capital | Fair value adjustment of interest rate swap | Exchange differences on translating foreign subsidiaries | Deferred cost of hedging reserve | Retained earnings | Total | | --- | --- | --- | --- | --- | --- | --- | | | | | DKK million | | | | | Equity at 1 January 2015 | 0.6 | 0.0 | 0.0 | 0.0 | 212.0 | 212.6 | | Profit for the year | 0.0 | 0.0 | 0.0 | 0.0 | 187.8 | 187.8 | | Other comprehensive income for the year | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Dividend paid | 0.0 | 0.0 | 0.0 | 0.0 | (100.0) | (100.0) | | Equity at 31 December 2015 | 0.6 | 0.0 | 0.0 | 0.0 | 299.8 | 300.4 | | Equity at 1 January 2016 | 0.6 | 0.0 | 0.0 | 0.0 | 299.8 | 300.4 | | Effect of combining Netcompany A/S and NC TopCo A/S equities as of 1 February 2016 (see explanation in note 1) | (0.1) | 0.0 | 0.0 | 0.0 | (315.8) | (315.8) | | Capital increase | 68.8 | 0.0 | 0.0 | 0.0 | 1,196.3 | 1,265.1 | | Profit for the year | 0.0 | 0.0 | 0.0 | 0.0 | 32.8 | 32.8 | | Other comprehensive income for the year / (loss) | 0.0 | (39.8) | (0.1) | 18.0 | 0.0 | (21.9) | | Equity at 31 December 2016 | 69.3 | (39.8) | (0.1) | 18.0 | 1,213.1 | 1,260.5 | | Equity at 1 January 2017 | 69.3 | (39.8) | (0.1) | 18.0 | 1,213.1 | 1,260.5 | | Capital increase | 2.3 | 0.0 | 0.0 | 0.0 | 240.0 | 242.4 | | Profit for the year | 0.0 | 0.0 | 0.0 | 0.0 | 141.7 | 141.7 | | Other comprehensive income for the year / (loss) | 0.0 | 9.8 | (2.8) | (7.6) | 0.0 | (0.6) | | Equity at 31 December 2017 | 71.6 | (30.0) | (2.9) | 10.4 | 1,594.8 | 1,643.9 | F-23 --- CASH FLOW STATEMENT | | Notes | 31 December | | | | --- | --- | --- | --- | --- | | | | 2017 | 2016 | 2015 | | | | DKK million | | | | Operating profit (EBIT) | | 273.2 | 139.1 | 207.4 | | Depreciation and amortisation | 10 | 129.2 | 94.2 | 20.6 | | Working capital changes | 23 | (95.0) | (19.6) | 9.1 | | Free cash flow | | 307.3 | 213.6 | 257.2 | | Income taxes paid | 12 | (35.4) | (34.0) | (20.6) | | Financial income received | 11 | 1.2 | 1.3 | 3.4 | | Financial expenses paid | 11 | (77.8) | (64.1) | (3.2) | | Cash flows from operating activities | | 195.3 | 116.9 | 216.8 | | Net cash outflow on acquisition of subsidiaries | 25 | (120.3) | (2,516.1) | 0.0 | | Acquisition of property, plant and equipment | 15 | (16.7) | (13.0) | (3.0) | | Acquisition of intangible assets | 14 | (11.1) | (9.2) | (5.9) | | Other receivables (deposits) | | (2.3) | (1.5) | (0.6) | | Cash flows from investing activities | | (150.5) | (2,539.7) | (9.6) | | Cash proceeds from issue of share capital | | 16.7 | 1,265.1 | 0.0 | | Cash proceeds from borrowings | 20 | 92.0 | 1,178.0 | 0.0 | | Repayment of borrowings | 20 | (16.6) | (11.0) | (8.6) | | Dividend paid to previous shareholder of Netcompany A/S | | 0.0 | (116.4) | (100.0) | | Cash flows from financing activities | | 92.2 | 2,315.7 | (108.6) | | Increase in cash and cash equivalents | | 137.0 | (107.0) | 98.6 | | Cash and cash equivalents at 1 January | 18 | 32.0 | 111.5 | 12.9 | | Cash and cash equivalents balances acquired | | 26.3 | 27.6 | 0.0 | | Effect of exchange rate changes on the balance of cash held in foreign currencies | | (0.8) | (0.1) | 0.0 | | Cash and cash equivalents at 31 December | 18 | 194.5 | 32.0 | 111.5 | F-24 --- NOTES TO THE COMBINED FINANCIAL STATEMENTS ## 1. Accounting policies The combined financial statements consist of the activities of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries for the period 1 January 2016 to 31 January 2016, and from 1 February 2016, the combined financial statements consist of the activities of NC TopCo A/S and subsidiaries, including Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and its subsidiaries, with 1 February 2016 being the date where the Significant Shareholders acquired a majority stake in the Group. ## 2015 The financial information for 2015 represents the audited consolidated figures for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries as presented as comparative figures in the 2016 consolidated financial statements prepared in accordance with IFRS as adopted by the EU. In the income statement for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries for 2015, cost items were presented based on their nature. In the combined financial statements, cost item are presented based on their function. Comparative figures have been changed accordingly. ## 2016 In the statement of comprehensive income and in the cash flow statement for 2016, the financial figures for January 2016 have been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries, whereas for the period 1 February to 31 December 2016 the financial figures have been derived from the audited consolidated financial statements for NC TopCo A/S. The balance sheet as of 31 December 2016 is identical with the audited consolidated balance sheet for NC TopCo A/S. The Statement of Changes in Equity for 2016 has been derived from the audited consolidated financial statements for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries and combined with NC TopCo A/S as of 1 February 2016. In order to avoid double counting of equities as of 1 February 2016 where the Significant Shareholders acquired a majority stake in the Group, an elimination adjustment have been included in the Statement of Changes in Equity as of 1 February 2016. ## 2017 The financial information for 2017 represents the audited consolidated figures for NC TopCo A/S and subsidiaries. The combined financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU and additional Danish disclosure requirements. The combined financial statements are presented in DKK, which is considered the functional currency of the Group's activities. The figures are prepared in accordance with IFRS standards and interpretations applicable to the 2017 financial year. Please refer to note 3 for a discussion of the impact from implementing IFRS 9, 15 and 16 with effect for the 2017 financial year. ## Combination principles The combined financial statements are prepared by adding together financial statement items of a uniform nature. The financial statements used for combination purposes have been prepared applying the Group's accounting policies. Upon combining the financial information for NC TopCo A/S and Netcompany A/S (subsequently renamed to Netcompany Holding I A/S), respectively, for the periods described above, with their respective subsidiaries, intra-group income and expenses, intragroup accounts and dividends as well as profits and losses on transactions between the combined entities are eliminated. ## Foreign currency translation On initial recognition, foreign currency transactions are translated applying the exchange rate at the transaction date. Receivables, payables and other monetary items denominated in foreign currencies that have not F-25 --- been settled at the balance sheet date are translated using the exchange rate at the balance sheet date. Exchange differences that arise between the rate at the transaction date and the one in effect at the payment date or the rate at the balance sheet date are recognised in the income statement of comprehensive income as financial income or financial expenses. Property, plant and equipment, intangible assets, and other non-monetary assets that have been purchased in foreign currencies and are measured based on historical costs are translated using historical rates. When subsidiaries, which present their financial statements in a functional currency different from DKK are included in the combined financial statements, the items of the income statement are translated at the average exchange rates. Exchange differences arising out of the translation of foreign subsidiaries' balance sheet items at the beginning of the year using the balance sheet date exchange rates as well as out of the translation of income statements from average rates to the exchange rates at the balance sheet date are recognised in other comprehensive income. ## Statement of comprehensive income ### Revenue The Group's primary service offerings include information technology consulting services and operations solutions. Consulting services are generally provided on either a time-and-material basis or as fixed-price contract basis. Revenue from time-and-material contracts is recognised as hours are delivered and direct expenses are incurred. Revenue from fixed-price contracts is recognised under the percentage-of-completion method. whereby revenue is recognised based on hours incurred to date as a percentage of the total estimated costs of hours to fulfil the contract. Revenue from operations solutions is recognised in the period the solutions are provided, which will either be based on output measures or using the straight-line method over the term of the contracts. ### Special items Special items are non-recurring costs or income recorded in the income statement which cannot directly be attributed to Groups ordinary activities. Such costs and income comprises expenses for restructuring, fundamental structural changes in the business, M&A and strategic considerations regarding the future of the group. They are therefore presented separately to provide a more comparable basis for assessing the underlying performance. Key assumptions involve judgment from Management in identifying and separating special income or expense items from other items in the income statement. These items are carefully considered in order to ensure correct presentation. See note 9. ## Cash flow statement The cash flow statement shows cash flows from operating, investing and financing activities as well as cash and cash equivalents at the beginning and the end of the financial year. Cash flows from operating activities are presented using the indirect method and calculated as the operating profit/ loss adjusted for non-cash operating items, working capital changes as well as financial income, financial expenses and income taxes paid. Cash flows from investing activities comprise payments in connection with acquisition of subsidiaries, activities and fixed asset investments and proceeds from sale of property, plant and equipment. Cash flows from financing activities comprise cash changes in the size or composition of the Group's share capital and related costs as well as the raising of loans, installments on interest-bearing debt payment relating to leasing obligations and dividend payments to shareholders. Cash and cash equivalents comprise cash. F-26 --- 2. Significant accounting estimates, assumptions and uncertainties When applying the accounting policies, Management has to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that cannot be directly derived from other sources. Such estimates and assumptions are based on historical experience and other relevant factors. The actual results may deviate from such estimates. Estimates and the underlying assumptions are reassessed on a regular basis. Any changes in the accounting estimates are recognised in the accounting period in which the change was made as well as in future accounting periods if the change affects the period in which it was made as well as subsequent accounting periods. In the financial statements for 2017, it is particularly important to note the following assumptions and uncertainties: A. Contract work in progress Contract work in progress for fixed-priced-contracts is measured at the selling price of work completed at the balance sheet date, and the selling price is calculated on the basis of contracted income and the determined stage of completion. Stage of completion is determined making estimates of future hours and other project costs. The Group reviews its contract portfolio on a regular basis. If circumstances arise that change the original estimates of the selling price of the contracts or costs, revisions to estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in the income statement in the period in which the circumstances giving rise to the revisions become known by the Group. See note 17. B. Provisions for onerous contracts and warranty obligations As part of its regular review of the contract portfolio, the Group may identify contracts where the completion of a contract most likely will result in a negative contribution. In these circumstances, the Group will record a provision to cover the unavoidable loss. Provision for warranty obligations are based on past history and provisions for specific customer cases. The estimates of the provision may be subject to significant management judgement and uncertainty depending on project complexity and on whether there are any disputes with customers in relation to project performance, claims and counter claims, contract interpretation and alike. See note 22. C. Business combinations Acquisitions of businesses are accounted for using the acquisition method. The cost of an acquisition is measured as the consideration transferred for assets acquired and liabilities assumed in the business combination measured at fair value on acquisition date. 2017 On the 25 October 2017, the Group acquired the entire share capital of Hunter Macdonald Ltd at a price of DKK 345.9m, of which DKK 120.3m was paid in cash and DKK 225.6m was settled by the issue of share capital in NC Topco A/S. Accounting for a business combination requires Management to estimate the fair value of the assets, such as goodwill, customer relationships and order backlog. Key assumptions for the methods applied in determining the fair value are based on the present value of future cash flows, churn rates or the expected cash flows related to the specific asset. Estimates and methodologies used, can have a material impact on the respective values and ultimately the amount of the fair values recognised. IFRS 3 “Business Combinations” requires that the Group recognize, separately from goodwill, the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values. The recognised goodwill amount is allocated to the activities of the Group generating separate payments (cash generating units). Determination of cash generating units complies with the management structure and management accounting and reporting of the Group. Goodwill is not amortised, but tested at least once a year for impairment. F-27 --- The Group has performed a review of the balance sheet of Hunter Macdonald Ltd at the acquisition date 25 October 2017, for the purposes of identifying non-recognised assets and liabilities, and for identifying any fair value adjustments to the assets and liabilities already recognised in the balance sheet of Hunter Macdonald Ltd at the acquisition date. As part of this process the following unrecognised assets and liabilities were identified in connection with the acquisition in 2017: - Order back-log, DKK 31.5m Fair value of order back-log has been determined on basis of Net Operating Profit Less Adjusted Taxes (NOPLAT) from the order back-log at the acquisition date, adjusted for amounts already included in the recognition of fair value of other identified intangible assets, and discounted with the internal required rate of return of 13.2% p.a. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. - Customer relationships, DKK 75.9m Fair value of customer relationships has been determined on basis of forecasted NOPLAT from acquisition date in October 2017 to 2024 adjusted for expected churn-rate and discounted with the internal required rate of return of 13.2% p.a. The calculated fair value has been increased with a tax amortisation benefit factor of 1.15. - Deferred tax liability, DKK 20.4m Deferred tax on the remeasurement of order back-log and customer relationships reflects and is equal to the total increase in the fair value of the order back-log and customer relationships as a result of increasing the fair values with the tax amortisation benefit factor. - Goodwill arising on acquisition, DKK 214.7m Based on the measurement of identifiable assets and liabilities at their fair values, the difference between the cash consideration and the fair value of the identified net assets equals DKK 214.7m, which amount represents the goodwill from the acquisition of Hunter Macdonald Ltd. In addition, the consideration paid for the business combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of Hunter Macdonald Ltd. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. Goodwill is also not deductible for tax purposes. For all other identified assets and liabilities Management determined that the book values in the balance sheet of Hunter Macdonald Ltd at 25 October 2017 were equal to their fair values. - Summary of acquired balance sheet of Hunter Macdonald at the take-over date: | | 2017 Hunter Macdonald | | | --- | --- | --- | | | Book value on acquisition date | Opening balance sheet | | | DKK million | DKK million | | Cash and cash equivalents | 26.3 | 26.3 | | Trade and other receivables | 51.7 | 51.7 | | Work in progress | 3.3 | 3.3 | | Right of use assets | 1.0 | 1.0 | | Plant and equipment | 0.6 | 0.6 | | Goodwill | 0.0 | 214.7 | | Customer Relationships | 0.0 | 75.9 | | Order back-log | 0.0 | 31.5 | | Deferred tax of the transaction | 0.0 | (20.4) | | Trade and other payables | (38.7) | (38.7) | | Consideration transferred | | 345.9 | --- - Revenue and profit contribution: The acquisition of Hunter Macdonald Ltd contributed revenues of DKK 61.9m and net profit of DKK 12.4m to the Group for the period from 25 October to 31 December 2017. Had the acquisition occurred on 1 January 2017 consolidated pro-forma revenue and profit for the year ended 31 December 2017 would have been increased by DKK 286.3m and DKK 21.0m, respectively. These amounts have been calculated using the subsidiary's results and adjusting them for: - differences in the accounting policies between the Group and the subsidiary and - the additional depreciation that would have been charged assuming the fair value adjustments to identifiable intangible assets had applied from 1 January 2017 together with the consequential tax effects. 2016 On 1 February 2016, the Group acquired the entire share capital of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and its subsidiaries at a price of DKK 2,320.4m in cash. Furthermore, on 22 November 2016, the Group acquired the entire share capital of Mesan AS (subsequently renamed to Netcompany AS) which is located in Norway. The consideration amounted to DKK 195.6m in cash. After the acquisition Mesan AS has changed its name to Netcompany AS. Assets acquired and liabilities recognised at the dates of acquisition are summarised above. The acquisitions have strengthened the Group's position on the European market and added a strong partner for Group. Goodwill represents the value of the current workforce and potential synergies expected from integration within the Group. | | 2016 Netcompany A/S* (Denmark) | | | 2016 Netcompany AS (Norway) | | --- | --- | --- | --- | --- | | | Book value on acquisition date | Opening balance sheet | Book value on acquisition date | Opening balance sheet | | | DKK million | DKK million | DKK million | DKK million | | Cash and cash equivalents | 44.4 | 44.4 | 27.4 | 27.4 | | Software | 4.5 | 4.5 | 0.0 | 0.0 | | Trade and other receivables | 182.8 | 182.8 | 26.8 | 26.8 | | Work in progress | 78.7 | 78.7 | 0.0 | 0.0 | | Deferred tax asset | 0.9 | 0.9 | 0.1 | 0.1 | | Plant and equipment | 12.3 | 12.3 | 0.5 | 0.5 | | Goodwill | 0.0 | 1,765.2 | 0.0 | 118.7 | | Customer Relationships | 0.0 | 205.5 | 0.0 | 63.0 | | Order back-log | 0.0 | 57.5 | 0.0 | 7.0 | | Technology | 0.0 | 52.9 | 0.0 | 0.0 | | Brand | 0.0 | 167.8 | 0.0 | 0.0 | | Corporate tax | (20.8) | (20.8) | (4.1) | (4.1) | | Deferred tax of the transaction | 0.0 | (106.4) | 0.0 | (17.5) | | Prepayments from costumers | (25.2) | (25.2) | 0.0 | 0.0 | | Trade and other payables | (99.7) | (99.7) | (26.2) | (26.1) | | Consideration transferred | | 2,320.4 | | 195.6 | * subsequently renamed to Netcompany Holding I A/S In 2017, the Group has made an additional payment of DKK 10.1m, which has been added to goodwill for Netcompany A/S (subsequently renamed to Netcompany Holding I A/S). - Revenue and profit contribution The acquisition of Mesan AS (subsequently renamed to Netcompany AS) contributed revenues of DKK 11.7m and net profit of DKK (2.6)m to the Group for the period from 22 November to 31 December 2016. F-29 --- Had the acquisition occurred on 1 January 2016 consolidated pro-forma revenue and profit for the year ended 31 December 2016 would have been increased by DKK 106.6m and DKK 20.9m respectively. These amounts have been calculated using the subsidiary’s results and adjusting them for: - differences in the accounting policies between the Group and the subsidiary and - the additional depreciation that would have been charged assuming the fair value adjustments to identifiable intangible assets had applied from 1 January 2016 together with the consequential tax effects. ## D. Impairment assessment of goodwill and other intangible assets relating to business acquisitions The Group has recognised goodwill and certain other intangible assets from the acquisitions of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) (1 February 2016), Netcompany AS (22 November 2016) and Hunter Macdonald Ltd (25 October 2017), as further outlined in Notes 14 and 25. Since the acquisition of Hunter Macdonald Ltd (subsequently renamed to Netcompany UK Ltd) took place in the last quarter of 2017, Management has determined that the carrying value of goodwill and the other identified intangible assets is at least equal to their fair values. Management has therefore concluded that goodwill and related intangible assets are not impaired, and no detailed impairment test has been deemed necessary at 31 December 2017 for Hunter Macdonald Ltd In 2018 the goodwill and the other identified intangibles assets will be tested at least once a year. For impairment test of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and Netcompany AS, see note 14. ## E. Share based payment A number of key employees of the Group hold shares directly or indirectly in NC TopCo A/S. The key employees participate as shareholders on the same terms and at the same price as the other shareholders of NC TopCo A/S. On this basis Management has concluded that NC TopCo A/S is not subject to the requirements of IFRS 2 “Share-based Payment” and since the key employees have acquired shares at the same price as other shareholders, there are no deemed service cost to be recognized relating to the key employees holding shares in NC TopCo A/S. ## 3. Effect of the change in accounting policies In 2017 certain new standards or amendments and revised accounting standards and interpretations issued by IASB have been early adopted by the Group. The following standards have been fully implemented in 2017 and comparative figures for 2016 and 2015 have been adjusted accordingly. ### IFRS 9 “Financial instruments” The date of initial application (i.e. the date on which the Group has assessed its existing financial assets and financial liabilities in terms of the requirements of IFRS 9) is 1 January 2015. Accordingly, the Group has applied the requirements of IFRS 9. The implementation of IFRS 9 has not affected the classification and measurement of the Group’s financial instruments compared to classification and measurement applied in the past financial statements. Financial assets and liabilities classified as held-to-maturity and loans and receivables under IAS 39 that were measured at amortised cost continue to be measured at amortised cost under IFRS 9 as they are held within a business model to collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal amount outstanding. The Group has entered into a currency swap and an interest swap to hedge currency and interest rate risks, respectively. Both swap contracts are measured at fair value. For the currency swap, the fair value of the difference between EUR and DKK has been reflected in financial income, whereas the fair value relating to the time value has been reflected in other comprehensive income and are shown as “Deferred cost of hedging reserve” in equity. The interest swap has been valued at fair value with fair value changes reflected in other comprehensive income and as “Cash flow hedging reserve” in equity. The application of IFRS 9 has not changed the measurement or classification of swaps. F-30 --- The effect of the change from the 'incurred loss' model in IAS 39 to the 'expected credit loss' model in IFRS 9 is immaterial due to the low credit risk in the Group. Therefore, the implementation of IFRS 9 has not had material impact on the financial position or performance of Group. Credit risk is described in note 24 as well. ## IFRS 15 "Revenue from Contracts with Customers" IASB has issued IFRS 15 "Revenue from Contracts with Customers". This standard replaces IAS 11 and IAS 18 and sets out the principles for recognition, measurement, presentation and disclosure of revenue from contracts with customers. The Group has decided to early adopt IFRS 15 from 1 January 2017 with change of comparative figures for 2016 and 2015. The transition to IFRS 15 have not had any significant impact on revenue, cash-flows or equity for 2017, 2016 or 2015, since under the past practice the Group recognised revenue in accordance with the same principles as set out by IFRS 15. IFRS 15 introduces a single model to deal with revenue from contracts with customers. Its core principle is that an entity should recognise revenue based on the transfer of promised goods or services to customers with an amount that reflects the consideration to which the entity expects to be entitled to for those goods or services provided to customers. Only when it comes to subscriptions, which is considered to be an insignificant type of revenue, the implementation of IFRS 15 has changed the recognition of income. Subscriptions were previously recognised on the date of invoicing. They are now recognized over the subscription period. The effect of this is a total of DKK 1.7m of revenue now being recognised in 2018 instead of 2017. There was no effect in 2016 or 2015, and therefore no recognition of revenue in 2017 related to 2016 and in 2016 related to 2015, respectively. ## IFRS 16 "Leases" This standard replaces IAS 17 and sets out the principles for recognition, measurement, presentation and disclosure of leases. IFRS 16 uses a single lessee accounting model and requires recognition of assets and liabilities for almost all leases which results in an increase of fixed assets and total financial debt. The Group decided to implement IFRS 16 in 2017 applying the "full retrospective" approach, which means restating opening retained earnings as if IFRS 16 had always been applied and preparing comparative figures according to IFRS 16. The Lease liability is determined as present value of the remaining payments using the borrowing rate of the entities. The right of use assets are recognised with an amount equal to the initial amount of the lease liability less depreciation. Accounting for leases is further described in note 15. ## 4. Segment information | Strategic business areas | Description | Operating segments | Geographic segments | | | --- | --- | --- | --- | --- | | Public | Public companies or companies acting as a public company seen from a business aspect. | Denmark, Norway & United Kingdom | Denmark, Norway, United Kingdom, Poland & Vietnam | | | Private | All other companies | Denmark, Norway & United Kingdom | Denmark, Norway, United Kingdom, Poland & Vietnam | | | Strategic business area | | | Public 2017 | Private 2017 | | | | | DKK million | | | Development Revenue | | | 440.4 | 206.5 | | Maintenance Revenue | | | 289.8 | 479.4 | | Total Revenue | | | 730.2 | 685.9 | | EBITA (non-IFRS) | | | 137.2 | 231.9 | --- F-32 | Strategic business area | | | Public 2016 | Private 2016 | Total 2016 | | --- | --- | --- | --- | --- | --- | | | | | DKK million | | | | Development Revenue | | | 166.7 | 271.8 | 438.4 | | Maintenance Revenue | | | 201.7 | 259.5 | 461.2 | | Total Revenue | | | 368.3 | 531.3 | 899.6 | | EBITA (non-IFRS) | | | 65.5 | 147.4 | 212.9 | | Strategic business area | | | Public 2015 | Private 2015 | Total 2015 | | | | | DKK million | | | | Development Revenue | | | 136.8 | 210.2 | 347.0 | | Maintenance Revenue | | | 174.7 | 236.4 | 411.1 | | Total Revenue | | | 311.5 | 446.6 | 758.1 | | EBITA (non-IFRS) | | | 80.7 | 126.7 | 207.4 | | Segment information related to operating entities | Denmark 2017 | Norway 2017 | United Kingdom 2017 | Other 2017 | | | | | DKK million | | | | | Revenue from external customers | | 1,220.3 | 133.9 | 61.9 | 0.0 | | EBITA, operating entities (non-IFRS) | | 329.0 | 27.8 | 12.4 | 0.0 | | Allocated cost | | 3.7 | 3.2 | 0.0 | (6.9) | | EBITA, reported in legal entities (non-IFRS) | | 332.6 | 31.0 | 12.4 | (6.9) | | Segment information related to operating entities | Denmark 2016 | Norway 2016 | United Kingdom 2016 | Other 2016 | | | | | DKK million | | | | | Revenue from external customers | | 887.9 | 11.7 | 0.0 | 0.0 | | EBITA, operating entities (non-IFRS) | | 210.9 | 2.0 | 0.0 | 0.0 | | Allocated cost | | (25.5) | 0.0 | 0.0 | 25.5 | | EBITA, reported in legal entities (non-IFRS) | | 185.5 | 2.0 | 0.0 | 25.5 | | Segment information related to operating entities | Denmark 2015 | Norway 2015 | United Kingdom 2015 | Other 2015 | | | | | DKK million | | | | | Revenue from external customers | | 758.1 | 0.0 | 0.0 | 0.0 | | EBITA, operating entities (non-IFRS) | | 207.4 | 0.0 | 0.0 | 0.0 | | Allocated cost | | (22.7) | 0.0 | 0.0 | 22.7 | | EBITA, reported in legal entities (non-IFRS) | | 184.7 | 0.0 | 0.0 | 22.7 | | Segment information related to geographical areas | Denmark 2017 | Norway 2017 | Poland 2017 | United Kingdom 2017 | Vietnam 2017 | | | | DKK million | | | | | Revenue from external customers | | 1,220.3 | 133.9 | 0.0 | 61.9 | | Revenue from internal sales | | 15.6 | 0.0 | 114.2 | 0.0 | | Revenue, geographical areas (non-IFRS) | | 1,235.9 | 133.9 | 114.2 | 61.9 | | EBITA, geographical areas (non-IFRS) | | 278.7 | 30.9 | 47.1 | 12.1 | | Allocated cost | | 50.3 | (3.2) | (47.1) | 0.3 | | EBITA, geographical areas (non-IFRS) | | 329.0 | 27.7 | 0.0 | 12.4 | --- F-33 | Segment information related to geographical areas | Denmark 2016 | Norway 2016 | Poland 2016 | United Kingdom 2016 | Vietnam 2016 | Total 2016 | | --- | --- | --- | --- | --- | --- | --- | | Revenue from external customers | 887.9 | 11.7 | 0.0 | 0.0 | 0.0 | 899.6 | | Revenue from internal sales | 0.1 | 0.0 | 59.0 | 0.0 | 0.0 | 59.1 | | Revenue, geographical areas (non-IFRS) | 888.0 | 11.7 | 59.0 | 0.0 | 0.0 | 958.7 | | EBITA, geographical areas (non-IFRS) | 178.8 | 2.0 | 32.2 | 0.0 | 0.0 | 212.9 | | Allocated cost | 32.2 | 0.0 | (32.2) | 0.0 | 0.0 | 0.0 | | EBITA, geographical areas (non-IFRS) | 210.9 | 2.0 | 0.0 | 0.0 | 0.0 | 212.9 | | Segment information related to geographical areas | Denmark 2015 | Norway 2015 | Poland 2015 | United Kingdom 2015 | Vietnam 2015 | Total 2015 | | --- | --- | --- | --- | --- | --- | --- | | Revenue from external customers | 758.1 | 0.0 | 0.0 | 0.0 | 0.0 | 758.1 | | Revenue from internal sales | 0.3 | 0.0 | 33.4 | 0.0 | 0.0 | 33.7 | | Revenue, geographical areas | 758.4 | 0.0 | 33.4 | 0.0 | 0.0 | 791.8 | | EBITA, geographical areas (non-IFRS) | 184.4 | 0.0 | 23.0 | 0.0 | 0.0 | 207.4 | | Allocated cost | 23.0 | 0.0 | (23.0) | 0.0 | 0.0 | 0.0 | | EBITA, geographical areas (non-IFRS) | 207.4 | 0.0 | 0.0 | 0.0 | 0.0 | 207.4 | ## 5. Costs of services | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Project costs | 166.9 | 80.0 | 60.8 | | Staff costs, see note 8 | 624.1 | 438.5 | 376.5 | | Depreciation, see note 10 | 10.7 | 7.5 | 9.3 | | Guarantee fees | 1.7 | 1.0 | 0.1 | | Total costs of services | 803.4 | 527.0 | 446.8 | ## Accounting principles Project costs comprise external consultants, subscriptions etc. Staff costs comprise wages and salaries for consultants incurred to achieve revenue. Depreciation comprise depreciation and impairment losses relating to Property, plant and equipment used for projects of the Group that are directly incurred to achieve revenue for the year. Costs of services are recognized income as the projects progresses. ## 6. Sales and marketing costs | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Sales and marketing costs | 7.1 | 2.9 | 3.2 | | Staff costs, see note 8 | 2.6 | 0.8 | 0.6 | | Total sales and marketing costs | 9.7 | 3.7 | 3.8 | ## Accounting principles Sales and marketing costs comprise expenses incurred for sale of the Group’s projects. Staff costs comprise wages and salaries for sales staff. In addition, sales and marketing costs comprise advertising costs, travelling and entertainment expenses, etc. as well as depreciation and impairment losses relating to property, plant and equipment attached to the sales and marketing function. --- 7. Administrative costs | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Administrative costs | 113.4 | 77.7 | 65.4 | | Staff costs, see note 8 | 65.0 | 30.4 | 23.4 | | Depreciation, see note 10 | 22.6 | 12.8 | 11.3 | | Total administrative costs excl. amortisation | 201.0 | 120.9 | 100.1 | 8. Staff costs and remuneration | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Salary and wages | 664.6 | 456.1 | 390.8 | | Pension contributions | 10.1 | 2.1 | 2.2 | | Other social security costs | 14.3 | 5.9 | 3.9 | | Other staff costs | 2.7 | 5.6 | 3.6 | | Total staff costs | 691.7 | 469.7 | 400.5 | | Staff costs presented under following Income Statement items: | | | | | Costs of services | 624.1 | 438.5 | 376.5 | | Sales and marketing costs | 2.6 | 0.8 | 0.6 | | Administrative costs | 65.0 | 30.4 | 23.4 | | Total staff costs | 691.7 | 469.7 | 400.5 | | Average number of employees | 1,256 | 876 | 598 | | Remuneration to the Executive Management Salaries | 7.3 | 9.1 | 9.1 | | Total | 7.3 | 9.1 | 9.1 | | Remuneration to the Board of Directors Board fees | 1.7 | 0.0 | 0.0 | | Total | 1.7 | 0.0 | 0.0 | | Remuneration to Key Personnel Salaries | 4.1 | 2.5 | 0.0 | | Total | 4.1 | 2.5 | 0.0 | For the years ended 31 December 2017, 2016 and 2015, the Group does not have post-employment benefits or share-based payments. Accounting principles Staff costs comprise salaries and wages as well as social security costs, pension contributions, etc for the Group's staff. 9. Special items | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Acquisition related costs | 15.4 | 35.1 | 0.0 | | Offer-related costs | 17.5 | 0.0 | 0.0 | | Total special items | 32.9 | 35.1 | 0.0 | F-34 --- # 10. Amortisation and depreciation | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Amortisation | | | | | Technology and software | 10.6 | 9.7 | 0.0 | | Trademark | 8.4 | 7.7 | 0.0 | | Order back-log | 23.4 | 17.8 | 0.0 | | Customer relationships | 53.5 | 38.6 | 0.0 | | Total amortisation | 95.9 | 73.8 | 0.0 | | Depreciation | | | | | Technology and software* | 4.9 | 3.8 | 2.9 | | Leasehold improvements | 1.2 | 0.8 | 0.8 | | Equipment | 8.5 | 5.4 | 8.3 | | Right of use assets | 19.0 | 10.3 | 8.6 | | Total depreciation | 33.6 | 20.3 | 20.6 | * Amortisation of technology and software derives from amortisation of assets identified in business acquisitions, whereas depreciation of technology and software derives from purchases of assets as part of the ongoing business Depreciation and amortisation have been presented as follows in the income statement: | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Costs of services | 10.7 | 7.5 | 9.3 | | Administrative costs | 22.6 | 12.8 | 11.3 | | Amortisation | 95.9 | 73.8 | 0.0 | | Total depreciation and amortisation | 129.2 | 94.2 | 20.6 | ## Accounting principles Please refer to notes 14 & 15. # 11. Financial income and expenses | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Financial income | | | | | Interest on corporate income tax | 0.2 | 0.0 | 0.8 | | Exchange rate adjustments | 8.8 | 0.0 | 2.5 | | Other interest income | 1.2 | 1.4 | 0.1 | | Total financial income | 10.2 | 1.4 | 3.4 | | Financial expenses | | | | | Income tax surcharge | 2.4 | 1.3 | 0.8 | | Interest expense, bank loan | 62.4 | 53.1 | 0.0 | | Interest expense, leasing | 0.8 | 0.7 | 0.3 | | Exchange rate adjustments | 7.7 | 1.3 | 0.0 | | Other financial costs | 9.0 | 7.7 | 2.1 | | Total financial costs | 82.3 | 64.1 | 3.2 | ## Accounting principles These items comprise interest income and expenses, currency gains and losses and tax surcharge and tax relief under the Danish Tax Prepayment Scheme. F-35 --- 12. Tax | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Current tax | 78.4 | 45.3 | 20.6 | | Adjustment regarding previous years | 0.0 | 0.0 | (0.8) | | Change in deferred tax | (19.0) | (1.6) | 0.0 | | | 59.4 | 43.6 | 19.8 | | Profit/loss before tax | 201.0 | 76.4 | 207.6 | | Tax at a rate of 22% (2016: 22%, 2015: 23.5%) | 44.2 | 16.8 | 48.8 | | Tax-based value of non-deductible expenses | 16.0 | 27.8 | 1.1 | | Adjustment regarding previous years | 0.0 | 0.0 | (0.8) | | Tax-based value of utilization of non-capitalised tax loss and unrecognized temporary differences | 0.0 | 0.0 | (26.6) | | Effect of different tax rates of subsidiaries | (0.8) | (0.9) | (2.7) | | | 59.4 | 43.6 | 19.8 | | Effective tax rate | 29.6% | 57.2% | 9.6% | | Deferred tax has been presented as follows in the balance sheet: | | | | | Deferred tax asset | 0.0 | 0.2 | 11.0 | | Deferred tax liability | (112.4) | (111.2) | 0.0 | | | (112.4) | (111.0) | 11.0 | | Deferred tax: | | | | | Non-current assets | (102.2) | (102.7) | 8.1 | | Work in progress | (10.8) | (8.4) | (3.4) | | Other payables | 0.6 | 0.1 | 0.0 | | Tax losses | 0.0 | 0.0 | 6.3 | | | (112.4) | (111.0) | 11.0 | | Tax payable and tax receivable | 31 December | | | | | 2017 | 2016 | 2015 | | | DKK million | | | | Tax payable at January 1, net | 31.0 | 20.9 | 22.7 | | Foreign exchange adjustments | (0.6) | (0.5) | 0.0 | | Addition, acquisition of subsidiaries | 0.7 | 4.1 | 0.0 | | Payment relating to prior years | (4.4) | (20.8) | (22.7) | | Current tax for the year | 78.4 | 45.3 | 20.6 | | Current tax interest for the year | 2.0 | 1.3 | 0.3 | | Current tax for the year recognised in other comprehensive income for the year | 0.7 | (6.2) | 0.0 | | Payments relating to the current year | (31.0) | (13.1) | 0.0 | | Tax payable at December 31, net | 76.8 | 31.0 | 20.9 | | Current tax is recognised as follows in the balance sheet: | | | | | Tax receivable (assets) | 0.0 | 0.0 | 0.0 | | Tax payable (liabilities) | 76.8 | 31.0 | 20.9 | | Tax payable at December 31, net | 76.8 | 31.0 | 20.9 | 2017 | Deferred tax (liabilities)/assets in relation to: | Property, plant & equipment | Intangible assets | Work in progress | Other payables | Tax losses | Total | | --- | --- | --- | --- | --- | --- | --- | | | | | DKK million | | | | | Opening balance 1 January 2017 | 4.1 | (106.8) | (8.4) | 0.1 | 0.0 | (111.0) | | Recognised in income | (0.9) | 21.7 | (2.3) | 0.5 | 0.0 | 19.0 | | Acquisitions | 0.0 | (20.4) | 0.0 | 0.0 | 0.0 | (20.4) | | Exchange difference | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Closing balance 31 December 2017 | 3.2 | (105.5) | (10.7) | 0.6 | 0.0 | (112.4) | F-36 --- 2016 | Deferred tax (liabilities)/assets in relation to: | Property, plant & equipment | Intangible assets | Work in progress DKK million | Other payables | Tax losses | Total | | --- | --- | --- | --- | --- | --- | --- | | Opening balance 1 January 2016 | 5.2 | 2.9 | (3.4) | 0.0 | 6.3 | 11.0 | | Recognised in income | (1.3) | 14.2 | (5.0) | 0.0 | (6.3) | (1.6) | | Acquisitions | 0.2 | (123.9) | 0.0 | 0.1 | 0.0 | (123.6) | | Closing balance 31 December 2016 | 4.1 | (106.8) | (8.4) | 0.1 | 0.0 | (111.0) | 2015 | Deferred tax (liabilities)/assets in relation to: | Property, plant & equipment | Intangible assets | Work in progress DKK million | Other payables | Tax losses | Total | | --- | --- | --- | --- | --- | --- | --- | | Opening balance 1 January 2015 | 5.2 | 2.9 | (3.4) | 0.0 | 6.3 | 11.0 | | Recognised in income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Acquisitions | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Closing balance 31 December 2015 | 5.2 | 2.9 | (3.4) | 0.0 | 6.3 | 11.0 | # Accounting principles Tax for the year, which consists of current tax for the year and changes in deferred tax, is recognised in profit/loss for the year by portion attributable to the profit for the year and recognised directly in other comprehensive income and equity by the portion attributable to entries recognised directly in other comprehensive income and equity. Current tax payable and current tax receivable are recognised in the balance sheet, calculated as tax on taxable income for the year, adjusted for prepaid tax. On calculation of current tax, the tax rates and rules applicable at the balance sheet date are used. Deferred tax is recognised on all temporary differences between the carrying amounts and tax-based values of assets and liabilities using the balance sheet liability method. Deferred tax is calculated on the basis of the planned use of each asset and the settlement of each liability, respectively. Deferred tax is measured using the tax rates and tax rules which — based on acts in force or acts actually in force at the balance sheet date — are expected to apply when the deferred tax is expected to crystallise as current tax. Changes in deferred tax resulting from changed tax rates or tax rules are recognised in profit/loss unless the deferred tax is attributable to transactions previously recognised directly in equity or other comprehensive income. In the latter case, such changes are also recognised directly in equity or other comprehensive income. Deferred tax assets, including the tax base of tax loss carry-forwards, are recognised in the balance sheet at their estimated realisable value, either as a set-off against deferred tax liabilities or as net tax assets to be set off against future positive taxable income. At each balance sheet date, it is considered whether sufficient taxable income is likely to arise in the future for the deferred tax asset to be used. # 13. Income Statement classified by function | | 1 January – 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Revenue | 1,416.1 | 899.6 | 758.1 | | Cost of services, including amortisation | (803.4) | (527.0) | (446.8) | | Gross profit | 612.7 | 372.6 | 311.3 | | Sales and marketing costs, including amortisation | (9.7) | (3.7) | (3.8) | | Administrative costs, including amortisation | (329.8) | (229.8) | (100.1) | | Operating profit (EBIT) | 273.2 | 139.1 | 207.4 | | Financial income | 10.2 | 1.4 | 3.4 | | Financial expenses | (82.3) | (64.1) | (3.2) | | Profit before tax | 201.0 | 76.4 | 207.6 | | Tax on profit for the year | (59.4) | (43.6) | (19.8) | | Profit for the year | 141.6 | 32.8 | 187.8 | F-37 --- Depreciation and amortisation have been presented as follows in the income statement: | Costs of services | 10.7 | 7.5 | 9.3 | | --- | --- | --- | --- | | Sales and marketing costs | 0.0 | 0.0 | 0.0 | | Administrative costs | 118.5 | 86.6 | 11.3 | | Depreciation and amortisation | 129.2 | 94.2 | 20.6 | ## 14. Intangible assets | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Goodwill | | | | | Cost at 1 January | 1,883.9 | 0.0 | 0.0 | | Additional payment | 10.1 | 0.0 | 0.0 | | Additions, acquisition of subsidiaries | 214.7 | 1,883.9 | 0.0 | | Cost at 31 December | 2,108.7 | 1,883.9 | 0.0 | | Carrying amount at 31 December | 2,108.7 | 1,883.9 | 0.0 | | Technology and software 2017 | Trademark 2017 | Order back-log 2017 | Customer relationships 2017 | | Other intangible assets | DKK million | | | | Other intangible assets | | | | | Cost at 1 January | 65.7 | 167.8 | 64.4 | | Addition | 0.0 | 0.0 | 0.0 | | Addition, acquisition of subsidiaries | 0.0 | 0.0 | 31.5 | | Cost at 31 December | 65.7 | 167.8 | 95.9 | | Amortisation at 1 January | (13.5) | (7.7) | (17.8) | | Amortisation for the year | (15.5) | (8.4) | (23.4) | | Amortisation at 31 December | (29.0) | (16.1) | (41.2) | | Carrying amount at 31 December | 36.7 | 151.7 | 54.7 | | Technology and software 2016 | Trademark 2016 | Order back-log 2016 | Customer relationships 2016 | | Other intangible assets | DKK million | | | | Cost at 1 January | 14.2 | 0.0 | 0.0 | | Addition | 9.2 | 0.0 | 0.0 | | Addition, acquisition of subsidiaries | 56.5 | 167.8 | 64.4 | | Elimination upon acquisition of subsidiaries | (14.2) | 0.0 | 0.0 | | Cost at 31 December | 65.7 | 167.8 | 64.4 | | Amortisation at 1 January | (10.1) | 0.0 | 0.0 | | Amortisation for the year | (13.5) | (7.7) | (17.8) | | Elimination upon acquisition of subsidiaries | 10.1 | 0.0 | 0.0 | | Amortisation at 31 December | (13.5) | (7.7) | (17.8) | | Carrying amount at 31 December | 52.2 | 160.1 | 46.6 | --- F-39 | Other intangible assets | Technology and software 2015 | Trademark 2015 | Order back-log 2015 | Customer relationships 2015 | | --- | --- | --- | --- | --- | | Cost at 1 January | 8.3 | 0.0 | 0.0 | 0.0 | | Addition | 5.9 | 0.0 | 0.0 | 0.0 | | Addition, acquisition of subsidiaries | 0.0 | 0.0 | 0.0 | 0.0 | | **Cost at 31 December** | **14.2** | **0.0** | **0.0** | **0.0** | | Amortisation at 1 January | (7.2) | 0.0 | 0.0 | 0.0 | | Amortisation for the year | (2.9) | 0.0 | 0.0 | 0.0 | | **Amortisation at 31 December** | **(10.1)** | **0.0** | **0.0** | **0.0** | | **Carrying amount at 31 December** | **4.1** | **0.0** | **0.0** | **0.0** | ## Accounting principles - **Goodwill** On initial recognition, goodwill is recognised and measured as the difference between, on one hand, the cost of the acquired subsidiary and, on the other hand, the fair value of the acquired identifiable assets, liabilities and contingent liabilities. The recognised goodwill amount is allocated to the activities of the Group generating separate payments (cash generating units). Determination of cash generating units complies with the management structure and management accounting and reporting of the Group. Goodwill is not amortised, but tested at least once a year for impairment. ## Intangible assets acquired in a business combination Intangible assets acquired in a business combination consists of technology, order back-log, customer relationships and trademark. Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Amortisation is recognised on a straight-line basis over their estimated useful lives: - Technology: 5 years - Order back-log: 3 years - Customer relationships: 5 - 7 years - Trademark: 20 years - **Intangible assets acquired separately** Intangible assets acquired separately with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. The cost of developed software comprises costs such as salaries and amortisation that are directly attributable to the development projects and are needed to complete the project, recognised from the time at which the development project first qualifies for recognition as an asset. Amortisation is recognised on a straight-line basis over their estimated useful lives: - Software: 3-5 years The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. - **Impairment testing** Goodwill and other intangibles which are acquired through business combinations are annually tested for impairment. The tests are performed at the end of each reporting period. --- Goodwill is allocated to each of the Group's cash generating unit, and impairment test was performed at the lowest level of the cash generating units representing different business acquisitions. Goodwill specified by cash generating unit appears from note 2 and note 25. The tests show that the recoverable amounts were estimated to be higher than the carrying amounts and therefore no impairment loss has been recognised. In the event that the recoverable amount of the cash generating unit is lower than the carrying amount, the carrying amount is written down to the recoverable amount. For cash generating units, the write-down for impairment is allocated so that any goodwill is written down first, and then any remaining impairment loss is allocated on the other assets of the unit. However, the individual asset may not be written down to an amount below its fair value net of any expected selling costs. The determination of the recoverable amount of a cash generating unit to which goodwill is allocated requires significant Management judgement in determining the various assumptions, such as cash-flow projections, discount rate and terminal growth rates. The sensitivity of the estimated measurement to these assumptions, combined or individually, can be significant. Furthermore, the use of different estimates or assumptions when determining the fair value of such assets may result in different values and could result in impairment changes in future periods. For the purposes of determining the recoverable amount of a terminal growth rate of $2\%$ has been used and a discount rate based on the weighted average cost of capital (WACC) between $13.7\%$ to $15.4\%$ . # 15. Property, plant and equipment | | Leasehold improvements 2017 | Equipment 2017 | Right of use assets 2017 | | --- | --- | --- | --- | | | DKK million | | | | Cost 1 January | 3.1 | 19.3 | 36.3 | | Additions | 2.2 | 14.5 | 23.4 | | Correction to prior years | 0.7 | (0.6) | 0.0 | | Additions, acquisitions of subsidiaries | 0.0 | 0.6 | 1.0 | | Disposals | 0.0 | (0.6) | 0.0 | | Cost at 31 December | 5.9 | 33.3 | 60.7 | | Depreciation 1 January | (0.8) | (5.4) | (11.1) | | Depreciation for the year | (1.2) | (8.5) | (19.1) | | Disposals | 0.0 | 0.6 | 0.0 | | Depreciation at 31 December | (2.0) | (13.3) | (30.2) | | Carrying amount at 31 December | 3.9 | 20.0 | 30.5 | | | Leasehold Improvements 2016 | Equipment 2016 | Right of use assets 2016 | | | DKK million | | | | Cost 1 January | 4.5 | 38.6 | 12.7 | | Additions | 0.9 | 12.1 | 14.9 | | Additions, acquisitions of subsidiaries | 0.0 | 0.5 | 8.7 | | Correction, prior years | 0.0 | 0.9 | 0.0 | | Elimination upon acquisition of subsidiaries | (2.3) | (32.8) | 0.0 | | Cost at 31 December | 3.1 | 19.3 | 36.3 | | Depreciation 1 January | (2.3) | (32.3) | (0.8) | | Depreciation for the year | (0.8) | (5.4) | (10.3) | | Elimination upon acquisition of subsidiaries | 2.3 | 32.3 | 0.0 | | Depreciation at 31 December | (0.8) | (5.4) | (11.1) | | Carrying amount at 31 December | 2.2 | 14.0 | 25.2 | --- | | Leasehold Improvements 2015 | Equipment 2015 | Right of use assets 2015 | | --- | --- | --- | --- | | | DKK million | | | | Cost 1 January | 4.2 | 35.9 | 5.0 | | Additions | 0.3 | 2.7 | 15.8 | | Disposals | 0.0 | 0.0 | (8.1) | | Cost at 31 December | 4.5 | 38.6 | 12.7 | | Depreciation 1 January | (1.5) | (24.0) | (0.3) | | Depreciation for the year | (0.8) | (8.3) | (8.6) | | Disposals | 0.0 | 0.0 | 8.1 | | Depreciation at 31 December | (2.3) | (32.3) | (0.8) | | Carrying amount at 31 December | 2.1 | 6.4 | 11.9 | ## Accounting principles - **Equipment and leasehold improvements:** Equipment and leasehold improvements are measured at cost less accumulated depreciation and impairment losses. Cost comprises the acquisition price, costs directly attributable to the acquisition, and preparation costs of the asset until the time when it is ready to be put into operation. The basis of depreciation is cost less estimated residual value after the end of useful life. Depreciation is calculated on a straight-line basis over their estimated useful lives: - Leasehold improvements: 3-5 years - Equipment: 3-5 years Depreciation methods, useful lives and residual values are reviewed annually. Gains and losses from the sale of property, plant and equipment are calculated as the difference between selling price less selling costs and carrying amount at the time of sale. Gains or losses are recognised in the income statement in the functions to which the assets relate. - **Right of use assets:** Right of use assets are measured at cost less accumulated depreciation and impairment losses adjusted for any remeasurements of the lease liability where initial cost is equal to the initial amount of the related lease liability. Depreciation is straight-line on basis of the underlying contracts, which are 1-7 years. The Group has entered into leasing contracts regarded as low-value and short-term, all expiring within 6 months. Total commitments relating to the non-canceling period is DKK 0.1m. All other lease contracts are recognised on the balance sheet according to IFRS 16. F-41 --- F-42 # 16. Trade receivables | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Trade receivables | 445.4 | 258.2 | 180.3 | The carrying amount of trade receivables is assumed to be equal to the fair value: | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Aging of receivables that are not impaired | | | | | Not due | 314.9 | 193.3 | 123.8 | | Until 30 days | 75.0 | 53.1 | 40.8 | | Between 30 and 90 days | 34.7 | 10.4 | 11.6 | | More than 90 days | 20.8 | 1.4 | 4.1 | | Total trade receivables | 445.4 | 258.2 | 180.3 | At 31 December 2017, the Group has recognised bad debt provisions of DKK 0m (2016: DKK 0m, 2015: DKK 0m), and no bad debt losses have been incurred during the year. ## Accounting principles Receivables include receivables from sales and other receivables. Receivables are measured at fair value on initial recognition and subsequently at amortised cost, usually equaling nominal value less any write-downs for bad debts. # 17. Contact work in progress | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Selling price of work performed | 409.3 | 315.2 | 224.2 | | Prepayments received from customers | (306.4) | (232.2) | (170.5) | | Total contract work in progress | 102.9 | 83.0 | 53.7 | Net value – stated on a contract-per-contract basis – is presented in the balance sheet as follows: | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Contract work in progress | 139.2 | 110.5 | 80.9 | | Prepayments received from customers | (36.2) | (27.5) | (27.2) | | Total contract work in progress | 102.9 | 83.0 | 53.7 | ## Accounting principles Contract work in progress is measured at the selling price of the work carried out less prepayments received at the balance sheet date. The selling price is measured based on the stage of completion and the total estimated income from the individual contracts in progress. Usually, the stage of completion is determined as the ratio of actual to total budgeted consumption of resources. For some projects where the consumption of resources cannot be applied as a basis, the ratio between completed and total sub-activities of the individual projects has been applied. If the selling price of a project cannot be made up reliably, it is measured at the lower of costs incurred and net realisable value. If prepayments received exceed the selling price on a contract by contract basis, the excess amount is recognised as a liability in “Prepayments received from customers”. --- F-43 # 18. Cash and cash equivalents | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Deposits at bank | 194.5 | 60.0 | 111.5 | | Bank overdraft | 0.0 | (28.0) | 0.0 | | Total cash and cash equivalents | 194.5 | 32.0 | 111.5 | # Accounting principles The carrying amounts for cash and cash equivalents assumed to equal the fair value. The Group's cash and cash equivalents consist of deposits in well-reputed banks. Therefore, cash and cash equivalents are not subject to credit risk. # 19. Share capital The share capital equals DKK 71,607,330 divided into shares of DKK 1 each or multiples hereof. The shares have been divided into the following classes: | | No. of shares | Votes | | --- | --- | --- | | A shares | 250,000 | — | | A2-shares | 50,001 | — | | B-shares | 19,525,772 | 35,620,736 | | C-shares | 10,156,043 | — | | C1-shares | 130,724 | — | | D Shares | 7,314,288 | 6,671,703 | | E Shares | 7,314,288 | 6,671,703 | | F Shares | 7,314,288 | 3,335,852 | | G Shares | 6,769,456 | 6,174,737 | | H Shares | 11,047,803 | 10,077,217 | | I Shares | 380,842 | — | | J-Shares | 1,353,825 | 13,534 | | Sum | 71,607,330 | 68,565,482 | | | 2017 | 2016* | | Profit for the year (DKK million) | 141.6 | 16.7 | | Weighted average number of shares (‘000) | 69,780 | 67,155 | | Basic earnings per share (DKK)* | 2.03 | 0.25 | | Diluted earnings per share (DKK)* | 2.03 | 0.25 | * Basic and diluted earnings per share have been presented only for the periods where NC TopCo A/S has been the majority shareholder of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) starting from 1 February 2016. Hence the calculation for 2016 only includes the period 1 February – 31 December. The share capital structure of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) was substantially different from the share capital structure of NC TopCo A/S and basic and diluted earnings per share for the periods prior to 1 February 2016 are not comparable to the basic and diluted earnings per share for the periods starting from 1 February 2016. Earnings per share are calculated in accordance with IAS 33. Earnings per share are calculated by dividing profit by the weighted average number of shares. No share options or loans with conversion rights or other financial instruments have been issued that would have a potential dilutive impact on earnings per share, which is why basic and diluted earnings per share are identical for the periods disclosed. --- F-44 # 20. Borrowings Borrowings has been presented as follows in the balance sheet: | | | | 31 December | | | | --- | --- | --- | --- | --- | --- | | | | | 2017 | 2016 | 2015 | | | | | DKK million | | | | Non-current liability | | | 1,264.9 | 1,178.0 | 0.0 | | Current liability | | | 0.0 | 28.0 | 0.0 | | Total borrowings | | | 1,264.9 | 1,206.0 | 0.0 | | | Currency | Maturity | Fixed or floating interest | Loan costs | Nominal value | | | | | | DKK million | | | Bank loan | EUR | 2023 | Floating | 27.6 | 1,105.1 | | Bank loan | NOK | 2023 | Floating | 5.2 | 105.2 | | Bank loan | DKK | 2023 | Floating | 4.6 | 92.0 | | Total borrowings | | | | 37.4 | 1,302.3 | | | | | 2017 | | | | | | Borrowings | Leasing | Interest rate and currency swaps fair value | Total | | | | | DKK million | | | | Opening balance 1 January 2017 | | 1,178.0 | 25.4 | 28.0 | 1,231.4 | | Financing obtained | | 92.0 | 0.0 | 0.0 | 92.0 | | Repayment | | 0.0 | (16.6) | 0.0 | (16.6) | | Fair value adjustments (non-cash) | | 0.0 | 0.0 | 0.0 | 0.0 | | Leasing (non-cash) | | 0.0 | 21.4 | 0.0 | 21.4 | | Amortisation loan costs (non-cash) | | 6.6 | 0.0 | 0.0 | 6.6 | | Acquired entities (non-cash) | | 0.0 | 1.0 | 0.0 | 1.0 | | Exchange rate adjustments (non-cash) | | (11.7) | 0.0 | 0.0 | (11.7) | | Closing balance 31 December 2017 | | 1,264.9 | 31.2 | 28.0 | 1,324.1 | The fair value of bank loans is deemed to approximate the nominal value of the loans. The carrying value of the loans is based on the amortised cost method and upon initial recognition recognised at the loan proceeds received less cost to obtain the loans. The loan costs are amortised over the life of the loans based on the effective interest rate method. The repayment profile for the bank debt is conditional on the Group complying with certain financial ratios (covenants). In 2017, the Group complied with the covenants defined. According to the loan agreement, all distribution of dividends has to be approved by the lender. ## Accounting principles Financial liabilities are measured at amortised cost. # 21. Other payables | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Interest and currency rate swaps stated at fair value | 28.0 | 28.0 | 0.0 | | Wages and salaries, payroll taxes, social, security costs, etc. payable | 39.3 | 31.2 | 11.2 | | Holiday pay obligation | 70.6 | 55.8 | 45.4 | | VAT and duties | 57.6 | 28.5 | 17.9 | | Other costs payable | 27.6 | 19.9 | 5.5 | | Total other payables | 223.1 | 163.3 | 80.0 | --- # Accounting principles The carrying amount of the above-mentioned other payables is assumed to equal their fair value. Holiday pay obligation represents the Group's obligations for payment of wages and salaries during holiday periods, corresponding to the employees' right vested at the balance sheet date to be used in subsequent financial years. The liability is presented under current liabilities. ## 22. Provisions | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Onerous contracts and warranty obligations at 1 January | 8.9 | 5.0 | 5.9 | | Additions, acquisition of subsidiaries | 0.0 | 0.0 | 0.0 | | Used in the year | (6.4) | (3.0) | (0.9) | | Provisions for the year | 27.9 | 6.9 | 0.0 | | Onerous contracts and warranty obligations at 31 December | 30.4 | 8.9 | 5.0 | ## Accounting principles Provisions represent commitments for onerous contracts and warranty obligations. An onerous contract is considered to exist when the Group has a contract under which the unavoidable costs of meeting the obligation under the contract exceed the economic benefits to be received from the contract. Hence the recognised provision represents the Group's best estimate of the unavoidable loss to complete its contract obligations for the related contracts. Provisions for warranty obligations are based on past history and provisions for specific customer cases. ## 23. Working capital changes | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Change in receivables | (170.4) | (165.1) | (59.4) | | Change in trade payables etc. | 75.3 | 145.5 | 68.6 | | Working capital changes | (95.0) | (19.6) | 9.1 | ## 24. Financial Risks And Financial Instruments | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Categories of financial instruments | | | | | Trade receivables | 445.4 | 258.2 | 180.3 | | Contract work in progress | 139.2 | 110.5 | 80.9 | | Receivables from group enterprises | 0.0 | 0.0 | 97.7 | | Other receivables | 11.0 | 6.8 | 1.0 | | Cash | 194.5 | 60.0 | 111.5 | | Loans and receivables measured at amortised cost | 790.1 | 435.5 | 471.4 | | Trade payables | 50.6 | 26.8 | 18.6 | | Payables to group enterprises | 0.0 | 0.0 | 52.1 | | Other payables | 223.1 | 163.3 | 80.0 | | Financial liabilities measured at amortised cost | 273.7 | 190.1 | 150.7 | | Fair value, Interest swap | (38.5) | (51.0) | 0.0 | | Fair value, Currency swap | 10.5 | 23.1 | 0.0 | | Financial assets and liabilities measured at fair value | (28.0) | (28.0) | 0.0 | F-45 --- - Policy for management of financial risks The Group’s objective at all times is to limit the Group’s financial risks. The Group manages the financial risks and coordinates cash management and management of interest rate and currency risks based on financial risk policies agreed with the board of directors and its majority shareholder. - Liquidity risks The Group attempts to maximise flexibility and minimise risks. At 31 December 2017, the Group has unutilised credit facilities of a total of DKK 212.5m (2016: DKK 84.8m, 2015: DKK 40.0m). - Credit risks In 2017, the Group has not had any bad debt losses. At 31 December 2017, the credit risk is assessed to be limited and at 31 December 2017, the Group has made a provision of DKK 0.0m (2016: DKK 0.0m, 2015: DKK 0.0m) for potential bad debts. - Currency risks The Group is to a limited extent exposed to foreign currency risks. The main part of the Group’s transactions is in Danish kroner. Late 2017, the Group acquired a subsidiary in the United Kingdom. With respect to subsidiaries situated in Poland, Norway and Vietnam there are transactions with these subsidiaries, however, their extent and risk are not significant. The Group may repatriate dividends from the foreign subsidiaries, which then may be subject to currency risk. Furthermore the Group has entered into loan agreements in different currencies, see note 20. To hedge currency risk, the Group has entered into a currency swap covering the loan in EUR. The fair value of the currency swap outstanding at the balance sheet date is positive by DKK 10.5m (2016: DKK 23.1m, 2015: N/A). - Interest rate risks The interest-bearing liabilities in the Group relate to the loans obtained to finance the purchases of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S), Mesan AS (subsequently renamed to Netcompany AS) and Hunter Macdonald Ltd (subsequently renamed to Netcompany UK Ltd), which bears interest according to OTC Rate Floor Transaction agreement made. In 2017 the floating rate averaged 4.3% (2016: 5.0%, 2015: N/A), excluding the impact from amortisation of loan costs. Approximately 80% of the bank loans have been converted to fixed interest rate of 4.0% p.a. through the use of interest rate swaps. The fair value of the interest rate swaps outstanding at the balance sheet date is negative by DKK 38.5m (2016: DKK 51.0m, 2015: N/A). The Group is to a limited extent also exposed to interest rate risks relating to the cash balances, which currently bear negative interest due to the current low interest environment. - Optimisation of the capital structure The Group regularly assesses whether its capital structure is in accordance with the Group’s and the owners’ interests. The overall objective is to ensure a capital structure that supports long-term growth whilst maximising returns for the Group’s owners by optimising the equity-to-debt ratio. F-46 --- 25. Acquisition of subsidiaries 2017 On 25 October 2017, the Group acquired the entire share capital of Hunter Macdonald Ltd (subsequently renamed to Netcompany UK Ltd) and its subsidiary at a price of DKK 345.9m of which DKK 120.3m was paid in cash and DKK 225.6m was settled by the issue of share capital in NC Topco A/S. 2016 On 1 February 2016, the Group acquired the entire share capital of Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) and subsidiaries at a price of DKK 2,320.4m in cash. On 22 November 2016, the Group acquired the entire share capital of Mesan AS (subsequently renamed to Netcompany AS), Norway at a price of DKK 195.6m in cash. Assets acquired and liabilities recognised at the dates of acquisition can be summarised as follows: | | 2017 Hunter Macdonald Ltd | 2016 Netcompany A/S* (Denmark) DKK million | 2016 Netcompany AS (Norway) | | --- | --- | --- | --- | | Non-current assets | | | | | Technology | 0.0 | 52.9 | 0.0 | | Software | 0.0 | 4.5 | 0.0 | | Trademarks | 0.0 | 167.8 | 0.0 | | Order back-log | 31.5 | 57.5 | 7.0 | | Customer relationships | 75.9 | 205.5 | 63.0 | | Property, plant and equipment | 0.6 | 8.4 | 0.5 | | Right of use assets | 1.0 | 18.0 | 8.6 | | Deferred tax assets | 0.0 | 0.9 | 0.1 | | Other receivables | 14.0 | 4.0 | 0.0 | | Current assets | | | | | Trade receivables | 37.7 | 172.5 | 17.5 | | Contract work in progress | 3.3 | 78.7 | 0.0 | | Other receivables | 0.0 | 10.3 | 9.2 | | Cash | 26.3 | 44.4 | 27.4 | | Current liabilities | | | | | Leasing | (0.9) | (18.0) | (8.6) | | Deferred tax on remeasurement of certain identifiable assets | (20.4) | (106.4) | (17.5) | | Prepayments received from customers | (1.9) | (25.2) | 0.0 | | Trade payables | (29.9) | (12.2) | (1.5) | | Tax payable | (0.7) | (20.8) | (4.0) | | Other payables | (5.2) | (87.4) | (24.7) | | Net assets taken over | 131.2 | 555.2 | 77.0 | | Goodwill | 214.7 | 1,765.2 | 118.7 | | Total consideration | 345.9 | 2,320.4 | 195.6 | | Less cash acquired | (26.3) | (44.4) | (27.4) | | Total net consideration | 319.6 | 2,276.0 | 168.3 | * subsequently renamed to Netcompany Holding I A/S For description of the assets and liabilities identified in the acquisitions in 2017 and 2016 see note 2. The Group has incurred acquisition costs totalling DKK 13.8m (2016: DKK 35.1m, 2015: DKK 0.0m), which are included in special items. Impact on revenue and profit/loss from acquired business in 2017: | | Revenue | Profit | | --- | --- | --- | | | DKK million | | | Hunter Macdonald Ltd | 61.9 | 12.4 | | Total | 61.9 | 12.4 | F-47 --- Pro-forma figures if Hunter Macdonald Ltd. had been a subsidiary in whole 2017: | | Revenue | Profit | | --- | --- | --- | | | DKK million | | | Hunter Macdonald Ltd | 286.3 | 21.0 | | Total | 286.3 | 21.0 | ## Impact on revenue and profit/loss from acquired business in 2016: (excluding Netcompany A/S (subsequently renamed to Netcompany Holding I A/S) which is included the combined financial statements for the whole year 2016) | | Revenue | Profit | | --- | --- | --- | | | DKK million | | | Netcompany AS | 11.7 | (2.6) | | Total | 11.7 | (2.6) | Pro-forma figures if Netcompany AS had been subsidiary in whole 2016: | | Revenue | Profit | | --- | --- | --- | | | DKK million | | | Netcompany AS | 106.6 | 20.9 | | Total | 106.6 | 20.9 | ## Accounting principles Acquired or newly established subsidiaries are recognised in the consolidated financial statements from the time of acquiring or establishing such subsidiaries. Time of acquisition is the date on which control over the subsidiary is actually acquired. Divested or wound-up subsidiaries are recognised in the consolidated income statement up to the time of their divestment or winding-up. Time of divestment is the date on which control of the subsidiary actually passes to a third party. When acquiring new subsidiaries, over which the Group obtains control, the acquisition method is applied under which identifiable assets, liabilities and contingent liabilities of these subsidiaries are measured at fair value at the acquisition date. Allowance is made for the tax effect of the restatements made. The purchase consideration for a subsidiary consists of the fair value of the consideration paid for the acquired subsidiary. Costs which are directly attributable to the acquisition of the subsidiary are recognised directly in income when incurred. Positive differences (goodwill) between, the purchase consideration for the subsidiary acquired and, the fair value of the net assets acquired are recognised as an intangible asset and tested for impairment at least once a year. ## 26. Fee for the group's auditor appointed by the shareholders | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Statutory audit | 1.2 | 0.4 | 0.4 | | Other assurance agreements | 0.6 | 0.2 | 0.0 | | Tax and VAT advisory services | 1.0 | 0.1 | 0.1 | | Other services | 4.7 | 8.4 | 0.5 | | Total audit fee | 7.5 | 9.1 | 1.0 | Other services includes pre-IPO services and services relating to mergers and acquisitions and various consultancy services. F-48 --- F-49 # 27. Related parties - **Related parties with a controlling interest** FSN Capital GP IV Limited acting in its capacity as general partner for and on behalf of each of FSN Capital IV L.P., FSN Capital IV (B) L.P., FSN Capital IV Invest L.P. and FSN Capital IV Netcompany Co-Investment LP (jointly referred to as the “Significant Shareholders”). - **Related parties with significant influence** Related parties with significant influence also comprises the Company’s Executive Management, Board of Directors and their related parties. Furthermore, related parties are companies in which the above persons have significant interests. - **Transactions with related parties** The Group has had the following transactions with other companies controlled by the Significant Shareholders: | | 31 December | | | | --- | --- | --- | --- | | | 2017 | 2016 | 2015 | | | DKK million | | | | Revenue | 2.8 | 0.7 | 0.0 | Remuneration and fees to the Executive Management and fees to the Board of Directors are disclosed in note 8. - **Companies in the Group** The Group’s subsidiaries at 31 December 2017 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Group. The country of incorporation or registration is also their principal place of business. | | Location | Currency | Ownership | Function | | --- | --- | --- | --- | --- | | NC TopCo A/S | Denmark | DKK | | Parent | | NC NewCo A/S | Denmark | DKK | 100% | Subsidiary | | Netcompany Holding I A/S (formerly Netcompany A/S) | Denmark | DKK | 100% | Subsidiary | | Netcompany A/S (formerly Netcompany IT and Business Consulting A/S) | Denmark | DKK | 100% | Subsidiary | | Netcompany Poland sp. Z o.o. (formerly Netcompany Solutions sp. Z o.o.) | Poland | PLN | 100% | Subsidiary | | Netcompany Norway AS (formerly Mesan AS) | Norway United | NOK | 100% | Subsidiary | | Netcompany UK Holding Ltd | Kingdom United | GBP | 100% | Subsidiary | | Netcompany UK Ltd (formerly Hunter Macdonald Ltd) | Kingdom | GBP | 100% | Subsidiary | | Netcompany Vietnam Ltd (formerly Hunter Macdonald Viet Nam Ltd) | Vietnam | VND | 100% | Subsidiary | # 28. Collateral provided and contingent liabilities As part of its contract commitments with customers, the Group has through its banks provided performance guarantees of DKK 139.9m (2016: DKK 51.6m, 2015: DKK 0.0m) # 29. Adoption of the combined financial statements At a meeting held on 23 May 2018, the Board of Directors adopted the combined financial statements to be included in the Offering Circular. # 30. Events after the balance sheet date No events have occurred after the balance sheet date to this date, which would influence the evaluation of the combined financial statements. --- [THIS PAGE INTENTIONALLY LEFT BLANK] --- ANNEX A—ARTICLES OF ASSOCIATION OF THE COMPANY Articles of Association Netcompany Group A/S Registration (CVR) no. 39 48 89 14 1 NAME 1.1 The Company’s name is Netcompany Group A/S. 2 OBJECTS 2.1 The objects of the Company are to invest in and own shareholdings in other companies and to carry on IT-business and thereto related business. 3 CORPORATE LANGUAGE 3.1 The corporate language of the Company is English. 3.2 Company announcements shall be prepared in English. 4 SHARE CAPITAL AND SHARES 4.1 The share capital of the Company is DKK 500,000, divided into shares of DKK 1 each or multiples thereof. 4.2 The share capital has been paid up in full. 4.3 The shares are registered with and issued in dematerialised form through VP SECURITIES A/S, CVR no. 21 59 93 36. Rights concerning the shares shall be notified to VP SECURITIES A/S in accordance with applicable rules. 4.4 The shares are negotiable instruments. No restrictions shall apply as to the transferability of the shares. 4.5 No shares carry any special rights. 4.6 No shareholder shall be obliged to have the shares redeemed fully or partly. 4.7 The shares shall be issued in the holder’s name and shall be registered in the name of the holder in the Company’s Register of Shareholders. 4.8 The Register of Shareholders is handled by Computershare A/S, CVR no. 27 08 88 99, on behalf of the Company. 5 INCREASE OF SHARE CAPITAL 5.1 In the period until 21 May 2023, the Board of Directors is authorised to increase the Company’s share capital in one or more issues without pre-emption rights for the Company’s existing shareholders by up to a nominal amount of DKK 10,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 20% of the outstanding share capital at the time of exercise of the authorisation. The capital increase shall take place at market price and shall be effected by cash payment, by contribution in kind or by debt conversion. 5.2 In the period until 21 May 2023, the Board of Directors is authorised to increase the Company’s share capital in one or more issues with pre-emption rights for the Company’s existing shareholders by up to a nominal amount of DKK 5,000,000. However, the Board of Directors may not exercise this authorisation for an amount higher than 10% of the outstanding share capital at the time of exercise of the authorisation. The capital increase may take place at a subscription price set by the Board of Directors and shall be effected by cash payment, including a potential favourable price. 5.3 The capital increases which the Board of Directors is authorised to execute pursuant to articles 5.1 and 5.2 cannot exceed a total aggregate nominal amount of DKK 10,000,000. 5.4 The new shares issued pursuant to articles 5.1 and 5.2 shall have the same rights as the existing shares of the Company. The new shares shall be negotiable instruments and issued in the holder’s name and shall be A-1 --- registered in the Company's Register of Shareholders. The shares shall be fully paid up. No shareholder shall be obliged to have the shares redeemed fully or partly. The new shares shall give rights to dividends and other rights in the Company from the time which is determined by the Board of Directors in connection with the decision to increase the share capital. 5.5 The Board of Directors is authorized to stipulate detailed terms and conditions governing capital increases under the authority given above. The Board of Directors is also authorized to amend these Articles of Association as required in connection with its use of such authority. ## 6 DIVIDEND 6.1 Dividend shall be paid out to shareholders by transfer through VP SECURITIES A/S and is deposited at the registered dividend accounts at VP SECURITIES A/S. 6.2 Dividend that has not been claimed within three years of the due date shall accrue to the Company. ## 7 GENERAL MEETINGS 7.1 General meetings of the Company shall be held in Greater Copenhagen. 7.2 Annual general meetings shall annually be held early enough for the audited and adopted annual report to be submitted to and received by the Danish Business Authority not later than four months after the closing of the financial year. 7.3 Not later than eight weeks before the date set for the annual general meeting the Board of Directors shall announce the date on which it intends to hold the general meeting as well as the deadline for the shareholders to submit requests for specific proposals to be included on the agenda, cf. article 7.5. 7.4 Every shareholder shall be entitled to have a specific subject considered at the annual general meeting. 7.5 Proposals from shareholders for consideration by the annual general meeting shall be submitted to the Board of Directors in writing not later than six weeks before the date of the general meeting. In the event that the Board of Directors receives a proposal later than six weeks before the general meeting, the Board of Directors shall decide whether it was received in time for it to be included on the agenda nonetheless. 7.6 Extraordinary general meetings must be held at the request of the Board of Directors or one of the auditors appointed by the general meeting. Extraordinary general meetings must also be held when requested by shareholders holding at least 5% of the share capital. Such request must be submitted in writing to the Board of Directors and must contain a specific subject or proposal for an agenda item. The Board of Directors shall convene the extraordinary general meeting within two weeks of the Company's receipt of the shareholders request. 7.7 All documents prepared for use by or for a general meeting of the Company in connection with or after the general meeting, including the notice and the minutes, will be prepared in English and to the extent required by law, in Danish. 7.8 General meetings shall be convened with a maximum notice of five weeks and a minimum notice of three weeks. 7.9 The Board of Directors convenes general meetings by posting on the Company's website (www.netcompany.com). General meetings shall moreover be convened by sending a notice to all shareholders entered in the Company's Register of Shareholders having so requested, to the address, including the e-mail address, cf. article 9, informed to the Company. If the information contained in the Register of Shareholders is insufficient or incorrect, the Board of Directors shall not be obliged to rectify the information or to give notice in any other way. 7.10 The notice shall as a minimum include: (1) Time and place for the general meeting and the issues to be considered at the general meeting. If the general meeting is to consider a proposal to amend the Articles of Association, then the notice shall specify the material content of the proposal. (2) The amount of the share capital and the voting rights of the shareholders. (3) The registration date stated in article 8.2 with a clear indication that only companies or persons holding shares in the Company as at said date shall be entitled to attend and vote at the general meeting. A-2 --- (4) An indication of where and how to obtain the full, unbridged text of the documents to be presented at the general meeting, the agenda and the complete proposals, including the exact internet address of the Company's website where the agenda and the other documents mentioned in article 7.12 will be made available. (5) The procedure for voting by proxy, by postal and by electronic means, and the Company will make a proxy form available for the shareholders that are entitled to vote. (6) If the general meeting is conducted partly by electronic means, this shall be stated in the convening notice together with the details on how to sign up and what the requirements are to the electronic systems that will be used. The convening notice shall point out that detailed information about the procedure will be available on the Company's website. 7.11 The general meeting is held in English. The Board of Directors may decide to offer simultaneous interpretation into Danish. 7.12 Not later than three weeks prior to a general meeting the following information, as minimum, shall be available on the Company's website: (1) The notice. (2) The total number of shares and voting rights on the date of the notice. (3) The documents to be submitted to the general meeting, including with respect to the annual general meeting the audited annual report. (4) The agenda and complete proposals. (5) The forms to be used for voting by proxy or postal. 7.13 The agenda of the annual general meeting shall include: (1) A report from the Board of Directors on the Company's activities in the past financial year. (2) Presentation and approval of the audited annual report. (3) A resolution on the distribution of profit or the cover of loss in accordance with the annual report adopted. (4) Approval of the remuneration for the Board of Directors for the current financial year. (5) Election of members to the Board of Directors. (6) Election of auditor. (7) Any proposal submitted by the Board of Directors regarding authorisation to acquire treasury shares. (8) Any proposals submitted by the Board of Directors or by shareholders. (9) Any other business. 7.14 A chairman of the meeting appointed by the Board of Directors shall preside over the proceedings at general meetings and decide upon all questions of procedure, voting and voting results. 7.15 The proceedings at a general meeting shall be recorded in a minute book and be signed by the chairman of the general meeting and the Chairman of the Board of Directors. Not later than two weeks after the general meeting the minute book, or a certified transcript of the minute book, shall be made available to the Company's shareholders. 7.16 As a general rule, cf. article 7.17, for each resolution made at the general meeting the minute book of the general meeting must set out at a minimum the full details of the voting including information on (i) the total number of shares for which valid votes were cast, (ii) the proportion of the share capital accounted for by these votes, (iii) the total number of valid votes, (iv) the number of votes cast in favour of and against each resolution, and (v) the total number of abstentions, if any. 7.17 If no shareholder requests that the full details of the votes be included in the minute book, the minute book need only to state the results of the individual votes. 7.18 Not later than two weeks after the general meeting the voting results from the general meeting shall be posted on the Company's website. A-3 --- 8 RIGHT OF ATTENDANCE—VOTING RIGHT 8.1 A shareholders right to attend general meetings and to vote at general meetings or vote by post is determined on the basis of the shares that the shareholder owns on the registration date. 8.2 The registration date is one week before the general meeting is held. The shares which the individual shareholder owns are calculated on the registration date on the basis of the registration of ownership in the Company’s Register of Shareholders as well as notifications concerning ownership which the Company has received with a view to update the ownership in the Register of Shareholders. 8.3 A shareholder who is entitled to attend the general meeting pursuant to article 8.1 and who wants to attend the general meeting shall request to receive an admission card not later than three days prior to the date of the general meeting. 8.4 Each share of DKK 1 has one vote at general meetings. 8.5 A shareholder may vote by written and dated proxy or by post. A vote by post must be received by the Company not later than the day before the general meeting. 8.6 A shareholder may attend in person or by proxy, and the shareholder or the proxy may attend together with an adviser. 8.7 At general meetings resolutions shall be decided by simple majority of votes unless otherwise prescribed by law or the Articles of Association. 9 ELECTRONIC COMMUNICATION 9.1 All communication from the Company to the individual shareholders may take place electronically by posting on the Company’s website or by email. General notices shall be published on the Company’s website and in such other manner as may be prescribed by applicable laws. The Company may as an alternative choose to send notices, etc., by ordinary post. 9.2 The Company’s website, www.netcompany.com, shall also contain information about requirements to the systems used and the procedures applying to the use of electronic communication. 9.3 The Company must request registered shareholders for an electronic address to which notices can be sent, and it is the responsibility of each shareholder to ensure that the Company is in possession of a proper electronic address. The Company is not obliged to verify such contact information or to send notices in any other way. 9.4 Communication from a shareholder to the Company may take place by email or by ordinary mail. 10 BOARD OF DIRECTORS 10.1 The general meeting shall elect at least three and not more than seven directors. 10.2 The directors elected by the general meeting shall retire from office at each annual general meeting but shall be eligible for re-election. 10.3 The Board of Directors elects the Chairman and the Deputy Chairman of the Board of Directors. If the Chairman resigns during a term of election, the Deputy Chairman shall take up the position as Chairman until a new Chairman is elected among the members of the Board of Directors. 10.4 Any employee representatives on the Board of Directors and their alternates, if any, are elected in accordance with applicable law thereon in force from time to time. 10.5 The Board of Directors forms a quorum when more than half of its members are represented, including the Chairman or the Deputy Chairman. 10.6 Resolutions by the Board of Directors are passed by a simple majority of votes. In case of an equality of votes, the Chairman, or in her/his absence the Deputy Chairman shall have a casting vote. 10.7 The Board of Directors shall lay down its rules of procedure. 10.8 The Board of Directors is authorised to pass one or more resolutions to distribute interim dividends. The authorisation of the Board of Directors is not limited (by an amount or otherwise) except as set out in the Danish Companies Act. 10.9 The Board of Directors may authorize one person alone or more persons jointly to sign for the Company by procuration. A-4 --- A-5 # 11 EXECUTIVE MANAGEMENT 11.1 The Board of Directors shall employ at least one but not more than four managers to comprise the Company's Executive Management. Where more than one manager is employed, one of them shall be appointed managing director. # 12 INCENTIVE PAY 12.1 The Company has adopted a Remuneration Policy, which includes overall guidelines for incentive pay for the Board of Directors and Executive Management. The Remuneration Policy, which has been approved by the general meeting, is publicly available on the Company's website. # 13 SIGNATURE RULES 13.1 The Company shall be bound (i) by the joint signatures of the Chairman of the Board of Directors and a member of the Executive Management, (ii) by the joint signatures of the Deputy Chairman of the Board of Directors and a member of the Executive Management, (iii) by the joint signatures of the Chairman of the Board of Directors and a member of the Board of Directors, (iv) by the joint signatures of the Deputy Chairman of the Board of Directors and a member of the Board of Directors, (v) by the joint signatures of two members of the Executive Management, or by (vi) the joint signatures of all the members of the Board of Directors. # 14 AUDITOR 14.1 The Company's annual report shall be audited by a state-authorised public accountant. 14.2 The auditor shall be elected by the annual general meeting for one year at a time. Re-election may take place to the extent permitted under applicable law. # 15 ANNUAL REPORT AND FINANCIAL YEAR 15.1 The Company's annual report and interim reports shall be prepared and submitted in English. The Board of Directors may resolve to supplement the annual report and interim reports of the Company with a Danish translation or a summary in Danish. 15.2 The financial year of the Company is the calendar year. Approved at the Company's extraordinary general meeting held on 22 May 2018. --- [THIS PAGE INTENTIONALLY LEFT BLANK] --- ANNEX B—APPLICATION FORM Application form (only one form per custody account) | Offering of 20,000,000 Offer Shares (excluding the Option Shares) of DKK 1 nominal value each ---|--- Application for purchase of Offer Shares in Netcompany Group A/S, registration (CVR) no. 39 48 89 14 | Selling agents: | Danske Bank A/S (CVR nr. 61 12 62 28) Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark | | --- | --- | | Joint Global Coordinators and Joint Bookrunners: | Danske Bank A/S, Deutsche Bank AG, London branch and Morgan Stanley & Co. International plc. | | Joint Bookrunner: | Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige | | Offer Period: | 23 May to 6 June 2018 at 11:00 a.m. (CET) unless the Offering is closed earlier in whole or in part. The Offer Period for order applications up to and including DKK 3 million may be closed before the remainder of the Offering. The Offering will not be closed before 1 June at 00:01 a.m. (CET). | | Offer Price Range: | DKK 135 to DKK 165 per Offer Share | | ISIN: | Permanent ISIN for the Shares: DK0060952919 | The English Language Prospectus dated 23 May 2018 includes, inter alia, the Articles of Association of Netcompany Group A/S, the audited combined financial statements of the Group as of and for the years ended 31 December 2017, 2016 and 2015, the unaudited condensed consolidated interim financial statements of the Group as of and for the three months ended 31 March 2018 and 2017, as well as the terms and conditions for the purchase of Offer Shares. Both binding order applications and expressions of interest can be submitted with specification of a maximum price. If the Offer Price is determined at a higher level than the stated maximum price, no Offer Shares will be allocated to the purchaser. For binding orders up to and including DKK 3 million, the application form is submitted to the purchaser's own account holding institution duly filled in and signed. The application form shall be submitted within an appropriate amount of time for the account holding institution to process and forward the application so that the application reaches Danske Bank A/S no later than 6 June 2018 at 11:00 a.m. (CET) or such earlier time as the Offering may be closed in whole or in part. Expressions of interest to purchase Offer Shares for more than DKK 3 million can be submitted to one of the Managers, e.g., by using this application form. On the terms and conditions stated in the English Language Prospectus dated 23 May 2018, including in "Risk Factors" and "Selling Restrictions", I/we hereby submit an order application for the purchase of Offer Shares in Netcompany Group A/S and simultaneously declare to have received a copy of the English Language Prospectus; and that I/we have solely based my/our investment decision on the contents of the English Language Prospectus. The Offer Price will be fixed upon closing of the Offering through a book-building process. See "The Offering—Offer Price". Only one application form per custody account with VP SECURITIES A/S (VP) will be accepted. Application submitted as a binding application (for orders up to and including DKK 3 million) I/we accept that the Managers may demand information about my/our name(s), address(es) and application and are entitled to pass on such information to the Selling Shareholders, Netcompany Group A/S and the Managers. I/ we undertake to pay the equivalent of the Offer Shares allocated at the Offer Price fixed. B-1 --- Field (1) or (2) should be completed | (1) For Danish kroner (DKK) | (2) Number of Offer Shares | (3) Maximum price per Offer Share, if any (dividable by 0.5) | | --- | --- | --- | | | | | Expression of interest submitted pursuant to the book-building process (for orders above DKK 3 million) I/we accept that the application form and information about my/our name(s) and address(es) are entitled to be passed on to the Selling Shareholders, Netcompany Group A/S and the Managers. I/we accept that I/we during the Offer Period can amend or revoke this expression of interest but that this expression of interest will automatically be converted into a binding purchase order upon expiry of the Offer Period. Field (1) or (2) should be completed | (1) For Danish kroner (DKK) | (2) Number of Offer Shares | (3) Maximum price per Offer Share if any (dividable by 0.5) | | --- | --- | --- | | | | | If the aggregate applications to purchase and expressions of interest exceeds the total number of Offer Shares, a reduction will be completed as further described in the English Language Prospectus. See "The Offering—Allocation and Reduction". Neither submission of application orders nor submission of expressions of interest entitles one to any Offer Shares. Settlement of the Offering will be effected by way of registration of the allocated number of Offer Shares on your custody account with VP SECURITIES A/S (VP) against payment in DKK, which is expected to take place on or before 11 June 2018. Information and signature | Name: | VP custody account no.: | | --- | --- | | Address: | Settlement account no.: | | Postal code and city: | Custodian bank: | | Telephone: | | | Date: | | | | This application form was submitted to (to be completed by account holding institution): Reg. no.: Participant ID no. (CD-ident.): Date: Tel.: | Signature Company stamp and signature Please complete the form overleaf when opening a new VP custody account. | Opening of new VP custody account (This box should be filled in when opening a new VP custody account and any related settlement account) | | --- | | Civil registration (CPR) no./company registration (CVR) no.: | | Name: | | Address: | | Postal code and city: | | Tel.: | | Position: | | Existing account no. for settlement, if any: | --- B-3 | Ordreblanket (kun én blanket pr. depot) | Udbud af 20.000.000 Udbudte Aktier (eksklusive Overallokeringsaktierne) à nom. DKK 1 | | --- | --- | Ordre om køb af Udbudte Aktier i Netcompany Group A/S, CVR-nr. 39 48 89 14 | Salgssteder: | Danske Bank A/S (CVR nr. 61 12 62 28) Holmens Kanal 2-12 1092 København K | | --- | --- | | Joint Global Coordinators og Joint Bookrunners: | Danske Bank A/S, Deutsche Bank AG, London branch og Morgan Stanley & Co. International plc. | | Joint Bookrunners: | Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige | | Udbudsperiode: | 23. maj til 6. juni 2018, kl. 11:00 dansk tid, medmindre Udbuddet helt eller delvist lukkes tidligere. Udbudsperioden for ordre op til og med DKK 3 mio. kan lukkes før resten af Udbuddet. Udbuddet vil tidligst blive lukket 1. juni 2018, kl. 00:01 dansk tid. | | Udbudskursinterval: | DKK 135 til DKK 165 pr. Udbudt Aktie | | ISIN kode: | Permanent ISIN kode for Aktierne: DK0060952919 | Det Engelsksprogede Prospekt dateret den 23. maj 2018 indeholder blandt andet vedtægter for Netcompany Group A/S, det reviderede kombinerede årsregnskab for Koncernen for årene, der sluttede, 31. december 2017, 2016 og 2015, det ureviderede sammendragede konsoliderede delårsregnskab for Koncernen for 3-månedersperioderne, der sluttede, 31. marts 2018 og 2017, samt vilkårene for køb af Udbudte Aktier. Både bindende ordrer og interessetilkendegivelser kan afgives med angivelse af en eventuel maksimumkurs. Fastsættes Udbudskursen højere end den anførte maksimumkurs, vil ordregiver ikke blive tildelt nogen Udbudte Aktier. For bindende ordrer til og med DKK 3 mio. indleveres ordreblanketten til ordregivers eget kontoførende institut i udfyldt og underskrevet stand. Ordreblanketten skal indleveres i så god tid, at det kontoførende institut har mulighed for at behandle og videresende ordren, således at den er Danske Bank A/S i hænde senest den 6. juni 2018, kl. 11:00 dansk tid eller et sådant tidligere tidspunkt, hvor Udbuddet måtte blive lukket helt eller delvist. Interessetilkendegivelser om at købe Udbudte Aktier for mere end DKK 3 mio. skal afgives til en af Emissionsbankerne evt. ved brug af denne ordreblanket. På vilkår som anført i det Engelsksprogede Prospekt dateret den 23. maj 2018, herunder afsnittene "Risk Factors" og "Selling Restrictions", afgiver jeg/vi hermed ordre om køb af Udbudte Aktier i Netcompany Group A/S og bekræfter samtidig at have fået udleveret et eksemplar af det Engelsksprogede Prospekt, og at jeg/vi alene har baseret min/vores investeringsbeslutning på indholdet af det Engelsksprogede Prospekt. Udbudskursen fastsættes efter lukning af Udbuddet via bookbuilding-metoden, jf. afsnittet "The Offering—Offer Price". Der kan kun afgives én ordreblanket pr. depot hos VP SECURITIES A/S (VP). Ordre afgivet som bindende ordre (for ordrebeløb til og med DKK 3 mio.) Jeg/vi accepterer, at Emissionsbankerne kan kræve oplysninger om mit/vort navn, adresse og ordre, og er berettiget til at videregive denne information til de Sælgende Aktionærer, Selskabet og Emissionsbankerne. Jeg/vi forpligter mig/os hermed til at betale modværdien af tildelte Udbudte Aktier til den fastsatte udbudskurs. --- Felt 1) eller 2) skal udfyldes | (1) For kroner (DKK): | (2) Antal Udbudte Aktier (stk.) | (3) Evt. maksimumkurs pr. Udbudt Aktie (deleligt med 0,5): | | --- | --- | --- | | | | | Interessetilkendegivelse afgivet efter bookbuilding-metoden (for ordrebeløb større end DKK 3 mio.) Jeg/vi accepterer, at ordreblanketten samt oplysninger om mit/vores navn og adresse videregives til de Sælgende Aktionærer, Netcompany Group A/S og Emissionsbankerne. Jeg/vi accepterer, at jeg/vi kan ændre eller tilbagekalde interessetilkendegivelsen i løbet af Udbudsperioden, men at interessetilkendegivelsen automatisk bliver til en bindende ordre ved Udbudsperiodens udløb. Felt 1) eller 2) skal udfyldes | (1) For kroner (DKK): | (2) Antal Udbudte Aktier (stk.) | (3) Evt. maksimumkurs pr. Udbudt Aktie (deleligt med 0,5): | | --- | --- | --- | | | | | Overstiger de samlede ordrer og interessetilkendegivelser det samlede antal Udbudte Aktier, vil der ske reduktion som anført i det Engelsksprogede Prospekt, jf. afsnittet "The Offering—Allocation and Reduction". Afgivelse af ordrer eller interessetilkendegivelser berettiger ikke til tildeling af Udbudte Aktier. Afvikling af Udbuddet sker ved registrering af antal tildelte Udbudte Aktier på Deres depot i VP SECURITIES A/S (VP) mod kontant betaling i DKK, hvilket forventes at finde sted senest 11. juni 2018. Oplysninger og underskrift | Navn: | VP-depotnr.: | | --- | --- | | Addressee: | Kontonr. til afregning.: | | Postnr. og by: | Kontoførende institut: | | Telefon: | | | Dato: | | | | Ordren er indleveret hos (udfyldes af kontoførende institut): | | | Reg.nr.: CD-ident: | | | Dato: Telefon: | | Underskrift | Firmastempel og underskrift | Udfyld nedenfor ved oprettelse af et nyt VP-depot. | Oprettelse af nyt VP-depot (Denne rubrik udfyldes i forbindelse med oprettelse af nyt VP-depot og evt. tilhørende afregningskonto) | | --- | | CPR/CVR-nr.: | | Navn: | | Adresse: | | Postnr. og by: | | Telefon: | | Stilling: | | Evt. eksisterende kontonr. til afregning: | --- THE COMPANY Netcompany Group A/S Grønningen 17, 1st floor DK-1270 Copenhagen K Denmark MANAGERS Joint Global Coordinators and Joint Bookrunners Danske Bank A/S Holmens Kanal 2-12 DK-1092 Copenhagen K Denmark Deutsche Bank AG, London Branch Winchester House 1 Great Winchester Street London EC2N 2DB United Kingdom Morgan Stanley & Co. International plc 25 Cabot Square Canary Wharf London E14 4QA United Kingdom Joint Bookrunner Skandinaviska Enskilda Banken, Danmark, Filial af Skandinaviska Enskilda Banken AB (publ.), Sverige Bernstorffsgade 50 DK-1577 Copenhagen V Denmark LEGAL ADVISERS To the Company: As to United States Law Davis Polk & Wardwell London LLP 5 Aldermanbury Square London EC2V 7HR United Kingdom As to Danish Law Plesner Advokatpartnerselskab Amerika Plads 37 DK-2100 Copenhagen Ø Denmark To the Managers: As to United States Law Latham & Watkins (London) LLP 99 Bishopsgate London EC2M 3XF United Kingdom As to Danish Law Kromann Reumert Sundkrogsgade 5 DK-2100 Copenhagen Ø Denmark AUDITORS OF THE COMPANY Deloitte Statsautoriseret Revisionspartnerselskab Weidekampsgade 6 DK-2300 Copenhagen S Denmark --- Donnelley Financial Solutions 478494 --- # netcompany

AI assistant

Netcompany Group Share Issue/Capital Change 2018

3373_rns_2018-05-23_806c5884-f642-4696-af53-450ec79ab963.pdf

netcompany

Netcompany Group A/S

Offering of 20,000,000 ordinary shares

OFFER PRICE RANGE: DKK 135—DKK 165 PER OFFER SHARE

TABLE OF CONTENTS

INTRODUCTION

Notice to Investors in the United States

European Economic Area (“EEA”) Restrictions

United Kingdom Restrictions

Information to Distributors

SUMMARY

Danish Summary

Dansk resumé

AI assistant

Netcompany Group — Share Issue/Capital Change 2018

3373_rns_2018-05-23_806c5884-f642-4696-af53-450ec79ab963.pdf

netcompany

Netcompany Group A/S

Offering of 20,000,000 ordinary shares

OFFER PRICE RANGE: DKK 135—DKK 165 PER OFFER SHARE

TABLE OF CONTENTS

INTRODUCTION

Notice to Investors in the United States

European Economic Area (“EEA”) Restrictions

United Kingdom Restrictions

Information to Distributors

SUMMARY

Danish Summary

Dansk resumé

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Netcompany Group Share Issue/Capital Change 2018