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Good morning, everybody, live here in Amsterdam or online following this webcast. I'm Jo Maes, CEO; and to my right is Joyce van Donk-van Wijnen, CFO. Welcome to the presentation of the results of Ordina over the first half year of 2022. Before we dive into the financial results, let me share the highlights of a successful half year for Ordina. We are looking back to a successful half year in the Benelux, growth in turnover, profit and number of employees in the Netherlands, Belgium and Luxembourg. The share of business proposition has increased to 46% of revenue. Again, this has been a major contributor to the improvement of our operational results. We are on track with our strategy execution and our strategic goals. The first half year of 2022 was indeed a successful half year for Ordina, in which we achieved strong results. Revenue growth of 10.4% with EUR 216 million, and EBITDA increased with EUR 3.8 million to EUR 28.2 million, representing an EBITDA margin of 13%. Our net result increased to EUR 14 million. Our direct labor force increased to 2,422 direct FTEs. We generated a free cash flow of EUR 10.2 million and ended the first 6 months with a net cash position of EUR 26 million. As said, we are on track to achieve our 2026 strategic targets. Client satisfaction and employee engagement will be measured in the third quarter of this year. The transformation of our business represented by the proportion of business propositions in our revenue has accelerated in this first half year. In this first half year of 2022, 46% of our revenue came from business proposition, which is an increase of EUR 24 million or 7 percentage points. Our EBITDA margin increased with 0.5 percentage points to 13%, already well in line with our midterm target of 12% to 14%.
Over the first 6 months, revenue growth accelerated from 4.1% last year to 10.4% this year or an organic growth rate of 8.7%, again already well above our midterm organic growth target of 5% to 8%. On the ESG side, Ordina has committed to remove its carbon footprint by 2030 and aims to become CO2 negative. We have accelerated the position of our fleet to electric vehicles. We acquired 13.5 hectare agricultural land in Belgium, our first reforestation project that will start in November this year. We continue to look for our agricultural land to compensate our last remaining exhaust and return new nature to society. Ordina is a diverse and inclusive employer. We create and facilitate diverse and inclusive high-performance teams. We have started initiatives to measure and communicate the positive impact of diversity on team performance. By 2030, our objective is to have 30% female staff, whereas today we are at 20%. In the first 6 months, total revenue increased by 10.4% to EUR 216 million. The top 10 client share decreased to 44% of our revenue. The public sector showed again a strong top line growth of 9.7%. We have won several frame agreements that give a solid basis for growth over the period to come. Amongst other wins, we will build an innovative portal to improve information disclosure using machine learning, artificial intelligence and natural language processing. This portal will enable citizens to look at relevant information disclosed by the Open Government Act. Also, Ordina has won as cybersecurity partner with several pen tests at various ministries and municipalities. We realized a revenue growth of 11.9% in the finance sector. In the Netherlands, we continue with our growth in banking and successfully expanded in health insurance sector. In Belgium, growth was driven mainly by expanding our portfolio at existing clients in the banking sector. Amongst others, we have won the assignment to help a bank improve detection, reporting and prevention of cyber attacks. Also, we will help a health insurer to accelerate its transition to an omnichannel customer experience by implementing a cloud API platform. Industry performed at a plus 10.1% revenue increase. In the Netherlands, we successfully increased our footprint in utilities, while the acquisition of IFS Probity contributed as of the fourth quarter of 2021. In Belgium, we realized growth in utilities, life sciences and logistics. For instance, we are helping a Belgian pharmaceutical company to streamline their digital processes to make them faster and more agile in the market of vaccine development. And we will once again be working with ProRail Logistics over the next 10 years on the development of smart and sustainable solutions to make sure passengers and goods reach their destinations safely on time. And then now I will hand over to Joyce.
Thank you, Jo, and good morning, everyone. I will take you through the next slide, focusing on our financial performance. Starting with our top line. Market demand remained strong and revenue increased by 10.4%, of which 8.7% was organic growth. Due to the growth in the number of direct FTEs that we achieved in the second half of 2021, our average number of direct employees stood at 7.4% higher than last year. In addition, we were able to increase prices, which compensated for the lower productivity levels, which I will elaborate on the next slide. And revenue from our business propositions grew from 39% last year to 46% in the first half of this year, leading to a higher quality mix of our revenue. Our EBITDA increased to EUR 28.2 million. The EBITDA margin also improved and stood at 13%, which is in the middle of our midterm target range. EBITDA grew along our improved revenue mix and price levels as well as the growth in the average number of direct employees. But our operational result was nevertheless subdued because of lower productivity levels and the higher use of external professionals to meet the great demand of our solutions. We experienced higher illness rates due to COVID and the catch-up effect on holiday leave, following the lifting of the travel restrictions, which we endured up and down during the last 2 years. The positive effects of COVID we experienced in the previous 2 years, such as less travel, less events and lower sickness levels, abated in the last half year and especially in the second quarter. Also, the comparison period for 2021 included a one-off expense of EUR 1.6 million. Looking at the Netherlands, top line for the Netherlands grew by 10.4% to EUR 141 million, of which 8.9% is organic growth. The growth in number of direct employees as well as improved price levels were the main driver for this growth. Revenue with business propositions increased as market demand remained strong. EBITDA increased to EUR 13.8 million and the EBITDA margin increased to 9.8%, an improvement that was held back by a decline in productivity, which put some pressure on the operational results, as mentioned before.
In Belgium and Luxembourg, revenue increased by 8.4% to EUR 75 million. Just like for the Netherlands, this was driven by the growth in the number of direct FTEs over the year and more business proposition revenue. Continuously strong productivity levels and efficient operations have again led to a high margin. The increase in business proposition revenue had a positive effect on managing the wage indexation, and this will remain challenging as inflation seems to stay high and translates in Belgium into mandatory wage indexations. Over the first half year, the number of employees were stable. In the first quarter, the number increased; but in the second quarter, the number decreased towards the same level as by the start of this year. Recruitment efforts and retention are ongoing focus areas. We saw small improvements between the number of inflow and outflow compared to last year. And last year, we saw a decline in direct FTEs in the first half year and growth in the second half year. Our productivity levels decreased by 2.7% to 73.1%. However, the high productivities of last year were positively impacted by working from home; whereas this year, there was a negative impact from higher illness rates and a catch-up in holiday leave, as mentioned before. The other performance indicators show positive results. Looking at our income statement, we see again revenue up at EUR 216 million. A few notes regarding costs. Work contracted out increased as our revenue with subcontractors increased. Personnel expenses increased due to the growth in FTE as well as inflationary salary pressure. And operating costs decreased mainly due to the provision taken last year, bringing the total operating cost to EUR 195.6 million and leading to an operating result of EUR 20.5 million. Net profit came in at EUR 14 million compared to EUR 11.9 million last year. Our net cash position at the end of the first half year came in at EUR 27 million -- EUR 26 million, EUR 0.8 million lower than last year. The familiar cash flows also applied to this first half year, except for the cash out for the share buyback program, which was completed last Friday. The free cash flow improved by EUR 2.9 million following the improved operational results. And now I would like to hand over to Jo again for the last part of this presentation.
Thank you, Joyce, and I will now discuss with you our management agenda for the second year half of 2022. As said, we are on track with our journey to Ordina 2026. When we started our journey in 2018, Ordina was a trusted IT supplier to our clients. With our Strategy 2022, we have moved up to be the digital partner of IT executives of our clients. In 2026, our goal is to be the strategic partner of business and IT executives of large local companies and public sector bodies. Therefore, we will focus in the coming period on 3 initiatives: superior value delivery with our high-performance teams; fast time-to-value through repeatable solutions addressing digital and market teams; attract, develop and retain IT and business talent by creating the next-generation working environment where the best meet. Looking at the second half year, we will be addressing 4 major actions. The first is recruitment and retention of business and IT professionals. During the first 6 months of this year, the number of direct FTEs slowly increased, while demand for our IT services remained strong. Therefore, we had to hire more external professionals, where we prefer to fill these positions with our own people, thus tightening the relationship with our clients. Best-in-class recruitment and retention efforts keep on playing an essential part in our strategy. In the third quarter, we will accelerate our campus recruitment efforts to hire young, top talent from high schools and universities. Also, we have started to explore the potential acquisition targets with high qualified personnel that are located outside the Benelux, for example, Portugal, that could boost our existing teams in the Benelux and service our clients in our region. The pandemic has learned, working in virtual teams independent of location is successful. Therefore, we see augmenting our teams with talent from outside our region as a real and attractive opportunity in addition to our ongoing recruitment and retention efforts. In line with our strategy to address market teams, we will launch 3 business solutions: a banking solution to address financial economic crime; an integrated supply chain solution for industry; and a solution for planning and management of field services in industry and public. As already said in our first quarter, we have and will continue to create room for salary indexation in order to retain and attract IT and business talent. Therefore, we will need to continue our efforts, ensuring our pricing levels stay in balance with salary indexation. Twelve months ago, we launched our niche acquisition strategy during the Capital Markets Day. In September last year, we announced the acquisition of IFS Probity, a good illustration of the strategy. As announced, we focus on organic growth, and we are very picky in this niche M&A strategy. That being said, we see an increasing potential to accelerate our M&A activity. We have invested and we have created relationships with the vast network of potential targets. Valuations and expectations are becoming more realistic. And with the experience from our first acquisition, we have developed a strong understanding of integration of acquisitions within our company.
Looking forward, it's more and more difficult. Although we are facing an increasingly uncertain economic climate, we believe the demand for digital solutions will remain high. And therefore, we are looking with confidence to the future. This ends our presentation of the Ordina first half year results of 2022. We are looking now forward to your questions.
It's Boudewijn Gunning from Teslin Capital Management. A question regarding progress on the IFS acquisition. Just curious, you mentioned it adds to revenue growth positively. Elaborate on progress there, foreseen synergies, whether that's tracking according to plan?
Okay. As said, so EFS (sic) [ IFS ] joined Ordina in September last year. We built together with IFS a business plan, and we're very happy to announce that it's well on track. So it's working quite well.
Great. And maybe elaborate a bit more. Do you -- I think it's mostly Dutch-based -- Netherlands-based. And is there any traction from maybe client wins already in Belgium or from one sector to the other because they had energy, your utilities focus, I think?
Yes. We are building up a sales pipeline in Belgium together with IFS because they have a very niche solution in billing within utilities, which is very actual in the Netherlands and in Belgium.
This is Julian, from AMB AMRO ODDO BHF. Congratulations on the nice set of results. A few questions from my side. Maybe I'll go one by one. So the first one is in the organic growth of 8.7% out of 10.4%, speaking on a quarterly basis and half year basis. I think in the press release, you basically note that this comes from many directions, including more volumes, but let's say, more kind of tariff indexation. So I was just wondering if you could isolate from the organic growth of 8.7% what portion comes from more volumes and what portion actually comes from tariff indexation.
Yes. So if you look at the -- so actually, I have like 3 factors taking into account. So we're at first taking into account the number of average direct FTEs, which is up by 7%, as I mentioned, and then the productivity levels which decreased by almost 3%. So adding the difference between that and you have the tariff impact.
Then the follow-up on the attrition in Q2. So let's say, if you look between half year of -- well, let's say, end of December, so 2021 and this half of the year, I think, indeed, it's kind of flat. But if you look on a quarterly basis, it went up and went down. Just wondering, I mean, are there any particular reasons why the attrition was rather high in Q2? And what can we expect in Q3 and Q4? I mean, obviously, you mentioned the fact you're going to focus, let's say, on recruitment in the campus. Doe it makes sense, I guess, because most of the people probably they end up, let's say, the academic years, so probably they'll have to look for a job. But just your thoughts on how well, let's say, the hiring would go in Q3 and Q4 and what could we expect.
Yes. So looking at the differences between the first and the second quarter that we saw attrition remaining quite stable and also compared to last year, recruitment was down a little bit. And there, we saw that our efforts paid off in the first quarter more than they did in the second quarter. That's also has to do with timing, for instance, with our campaigning in the labor market. So there you sometimes see the timing difference of the inflow. So there were no particulars to mention besides that. And as you mentioned already, looking at the young professionals, then the third quarter is obviously a quarter in which we regularly have a lot of inflow coming from that population.
Sounds good. And one on the maybe margins -- EBITDA margin risk for the full year. So you also mentioned that you hired more freelancers this quarter. I understand probably part of it -- part of the reason is to basically offset for, let's say, the levers in Q2. And at the same time, the demand is strong, so you probably have a duty to basically fulfill the job of the customers, so you probably have to compensate one of the either one. Now if eventually, let's say, this goes on in Q3 and Q4, do you think there might be a margin risk, in the sense that you're not going to end up in between the guidance range between 12% and 14% on the EBITDA margin side where you don't really see it as an upcoming risk?
It's always a risk, but it's -- I don't believe it's that much higher than it would be than it is last year. So because of the high demand, it's always a risk for us because we need to keep on growing with our own staff. And if we do not, indeed, we have to hire more external people. So it's a risk that is, well, I would say it isn't increased, but it's always there.
Okay. right? And maybe another one on the productive level. Obviously, it has dropped, and I think it's understandable. You always said that due to corona, more people -- basically people, let's say, kind of worked a bit more. So yes, they took less holiday hours, therefore productivity increased. Now this is coming down now. Do you see a bit more risk on the productivity side, more downside, in the sense that this is going to fall below 70%? Or this -- you feel comfortable, let's say, with 73% that we have right now?
I think looking at the first half, indeed, we saw an extra negative effect in the second quarter, which was actually a catch-up of holiday leave. Well, that has been done now. So we're not dragging that along. But we've also said that only working from home also creates productivity levels that are slightly higher than what we would see once people start getting back into the office, also, of course, more travel expenses, et cetera. So this impact is coming back into our cost. So that is exactly what we saw in the second quarter. So productivity levels were hit a bit higher than would be a regular level, but there is an effect.
And should we be more aware of the downside risk on the productivity? Or do you think it's going to stay around this level because it could be a bit of a difference on the top line growth, I believe?
I think for us, it's really about managing the balance also with our pricing levels and then the productivity levels. Like we also mentioned before, also the shift towards more business proposition revenues makes that we have more leverage in managing this balance where only increasing productivity levels isn't the highest priority. It's getting more in balance with also getting the projects and selling our solutions.
Daan. I had a question regarding the M&A opportunities outside the Benelux. So during the Capital Markets Day, you laid out a strategy to acquire companies in the Benelux with the geographies. And now you're saying you're exploring M&A opportunities outside the Benelux, also naming Portugal, for example. That's rather new. It's rather different than the Capital Markets Day. So could you tell us more about your reasoning there? Are you looking for niche acquisitions there? What are the valuations in this region? Could you tell us more about it.
Yes. Yes Thank you for your question. During our Capital Markets Day, we elaborated on niche acquisitions to complete our portfolio in our region. That being said, and already during the Capital Markets Day, we have been discussing the potential of working from home in virtual teams, thus having the notion of location independent services. We're now, I think, more than 1.5 -- now 1 year later. And we're seeing that clients are accepting more and more that we are working in virtual teams from different locations for these clients. So to enhance and accelerate our strategy, we're now exploring the opportunity to backfill our teams with people that do not live in our region and thus filling the shortage in people we have with people on our payroll from Ordina outside the Benelux. So we're not expanding to countries, for instance, like Portugal. We're really looking for fast resource pools with highly skilled people to backfill our teams working for our clients in our region. That means that we are not looking for niche parties in these regions. We are looking for highly skilled labor that we can backfill in our high-performance teams and thus accelerating the growth with high-performance teams in our region. That's the opportunity we're pursuing now.
And you always identified one of the main aspects of the M&A strategy is the cultural fit between Ordina and the employees. When you're moving towards, for example, Portugal, I can imagine there's a lot of different cultural aspects there. So aren't you worried that could be a problem?
That's a point of attention. And therefore, we are looking at regions where there is a cultural similarity. So we have been helped by an advise bureau that helps us with that. And countries like Czechia or Portugal are quite similar in culture to our cultures, and that's what we're exploring now, how this could work out in our teams and how diversity coming from another angle it is to say from another country would again help and boost performance in our teams. But we will keep measuring how that kind of diversity in backfilling teams could again enhance performance.
And how many FTE, full time employees, should we think about? And what are the multiples in these regions? Could you share something?
Yes. Well, as far as we are now in our exploration. The multiples in these regions tend to be lower as well as these are typically companies that work with labor -- skilled labor staff that is hired out to companies like Ordina. So it's another business model. And therefore, multiples tend to be lower in these regions as well.
And how many FTEs again? Excuse me.
Well, we're now exploring. So we -- to really boost our strategy, we have now 180 teams active. So if you want to just have figures in your heads to start measuring, typically roles that don't require the Dutch language in our region, then we are thinking of testers, systems integrators, ops engineers, back-end developers. So you should think of 3 FTE out of an average team of 7. That is, let's say, the potential today because I think the potential is much bigger than that. And not everything will be replaced, let me assure that. So it will be a slow ramp up, and let's see where we get. This is in the exploration phase.
Okay. And then to continue on that, I recall Joyce mentioned during the first quarter results that current M&A strategy in the Benelux is already with a very high risk profile. Is pursuing M&A outside Benelux not increasing the risk profile of the M&A strategy?
Well, I think we should make a big difference between opening a new country and housing our region with people working from another country. That's a completely different risk profile. And therefore, we do not see these steps as augmenting our risk profile.
If I may add to that, while we're on the subject of M&A strategy, can you elaborate a bit on traction maybe for second half year? Is something materializing already in M&A pipeline, both in niche or other countries backfilling? And maybe which niches are you looking for? Do you have the focus or the priority at the moment?
Yes, yes. So I just elaborated our exploration outside the Benelux. Within the Benelux, we're still pursuing niche acquisitions. And therefore, we are looking at sectors that deserve our focus, meaning that in banking we are looking, and then mostly for companies having more business expertise rather than an IT expertise, which we already have. And there are a lot of small companies, they're small adviser companies, that are quite attractive to us, which whom we have relations and build relations. So that's what's going on there. We're still pursuing in the utilities. Also there, there are a lot of niche companies in the energy division that play a role. These could be add-ons as well. Life Sciences. We have a vast expertise in life science business knowledge. But then again, it's a very broad theme. So there are a lot of consulting companies typically that have niche expertise in that area. So these would be the most important pockets where we are now pursuing. That being said, also on the technology side, there are small holes in our portfolio where focused niche technology companies could be a very important and interesting role for us to complete our portfolio on the technology side.
Just to mention an example here, Ordina has started to focus on local development as a technology 4 years ago. You can't follow all technologies, sometimes you miss one. We have been focusing on Microsoft. We have been focusing on Pegasystems. We have been focusing on Mendix. On the other hand, our systems as a technology is ramping up as well. So what to do? So typically, this is an example of a portfolio whole on the technology side where we say, now that could be interesting as well to plug it in, in our company as well. So these are typically the relationships which we are mentioning. We're making good progress there. But as said, we are picky as well on the company itself, the integration and synergy potential and, of course, the valuation. Now you're the experts, so you should know how expectations of valuation will evolve over the coming months.
Sure. I believe it looks positive for you. And then, I mean if we're talking about the coming months, do you see any materialization from the M&A pipeline already before end of December? Or do we need to think 2023?
You know we don't announce or comment on things, which we will close. So in due time, we will announce when it materializes.
I'm just curious also because looking at -- it's one part of capital allocation and then you've got very healthy free cash flow development, of course, which is positive. And looking ahead, you would expect a very healthy cash position at the end of the year again with no share buyback program at the moment. Or if M&A stays out, very risky, very uncertain. Then do you intend to do another share buyback program next year if there's a high cash position again or dividend actually...
We will evaluate that by -- towards year-end, indeed, depending on indeed how the M&A agenda will evolve, but -- and then also indeed the cash position by the end of the year, which could also mean an extra dividend as well, and we will determine that by the end of the year.
Yes. Daan, again. Joyce, I had a question on the working capital. Could you describe more about the strategy on the cash management regarding the working capital?
Well, looking at our cash management, it's quite straightforward. And, of course, our cash in and cash out that is within the company, we're highly cash generative, of course, looking at the hours that we make, the projects that we do at our clients, invoice them usually by the end of the month. So there, we've already have an efficient operations looking at our cash conversion. So we don't have specific initiatives on that, but we just keep that really straightforward as we have been doing for the last couple of years.
Yes, because I was wondering, of course, I know there are seasonalities in the working capital and the receivables will turn to cash in the second half of the year. But when we look at the levels of working capital in 2017, 2018, also when incorporating the revenue, of course, we see that working capital has been increasing when accounting for the increase in revenue. Can you explain what is happening there? Why is this relation changing?
Well, I think that has to do with stricter management on our working capital. And also, of course, it has to do with looking at the improved margins, which also means that there are -- for instance, the work externally sourced, which also is extra cash out compared to, for instance, doing that with our own staff, which has been growing over the last couple of years. That also enhances also that working capital management. And we have been doing minor tweaks to make it more operationally efficient step by step.
But we see that working capital is currently higher than it has been in the past. And you're saying we're strict on working capital. Are you saying we can expect there is more cash to come from working capital going forward?
I think we are getting to quite an optimum at the moment. And it all -- and the improvements have to be in line with the operational results. So I don't think there will be much more left with these improvement programs that we have been doing in the past.
Okay. And then on the cash position. You mentioned before that Ordina wishes to have like EUR 10 million, EUR 20 million to stand a difficult period. Are you still comfortable with that number? Or do you think things have changed over time?
Not at this moment. There are no big changes in that view. We are prudent, as we have mentioned before, indeed, and there are no changes in that view, no.
Okay, because when we are doing our calculations, well, there's EUR 25 million in cash at the end of H1. There are some share buybacks done since then. We can expect a lot of free cash flow in the second half of the year, perhaps also some from the working capital. We think there's some improvements left to be made there. So they would end up on a really big cash power again at the end of the year. Could you consider perhaps an interim dividend at Q3? Or are you expecting to do more on share returns?
Well, we are, of course, keeping close track on that. But like I also mentioned, we are working hard on our M&A agenda, of course, because for us, the best option, if we can really invest it in our company. But of course, we will keep close track. And then if there are no opportunities, then we will give that back to the shareholders so, yes.
Yes. Okay. So just to clarify, if there's no M&A activity in the second half of the year, we can see increased dividends at the end of the year.
Then we will do the evaluation indeed, and we will not keep a large amount of excess cash by the end of the year, yes.
Yes. I was just hoping to dig a bit deeper into the niche M&A thinking that you have. So I guess here, we have to look at either, let's say, acquiring companies and plugged them in into the Belgium, Luxembourg workforce for the Netherlands. Obviously, we know that the Belgium, Luxembourg has twice the profitability of Netherlands. So I was just thinking if that would have a priority when looking at M&A niches rather than Netherlands.
Yes. Well, I think in our M&A niche strategy, we're looking for companies that can be deployed in both regions. So that is an immediate synergy which we can realize. So when we acquire or looking at the company to acquire in Belgium, we would be looking to expand immediately that company to the Netherlands, thus offering to that company room for growth and that's added value for Ordina too such company and it's an important part of the business plan. That being said, and I hope I'm now addressing right your question, we're not too picky on whether it should come from Belgium or the Netherlands because we have a view on the Benelux when acquiring these companies.
Okay. Got it. And a final one on the market -- the launch of the 3 market themes that we just laid out on the slide. Just I was wondering if you could comment a bit on the rationale behind why these 3 themes, the market potential of this 3 themes? Are you kind of, let's say, developing them in-house? Or are you also like developing them together with the end customer because they actually would need something around, for example, financial economic crime?
Yes. Yes. Well, the rationale is, first of all, so when moving from Ordina 2022, where we have developed our 4 digital market -- digital themes, we have been looking at niches where there's a large potential for automatization and where we already have projects and business expertise. And as you know, we are quite active in banking. We are quite active on the compliance area in banking with regards to any money laundering regulations. So thus combining our digital expertise in gathering data, artificial intelligence and modeling compliance within platforms we already use, it's a small step to, let's say, productize our experience we already have on the digital solutions and the market expertise we have. That being said, so that was a logical step for us to enter into financial economic crime in banking because we have the experience, we have the references and we have digital solutions and housing and supporting them. Same goes for industry and the supply chain. So typically there, we have a lot of experience in planning upstream and downstream logistics, manufacturing execution systems. Our SAP practice has a lot of references in how to set up an ERP for an industrial partner, and we have a lot of experience in warehousing, knitting this all together. And that's the important part, what we had now on top of it is a cockpit having an overview of the integrated supply chain. And that's addressing a key issue our clients have today is that they're still facing disruptive supply chains and breaks in the supply chain. So it helps then to have a cockpit over the complete supply chain to enhance their planning and forecasting over the complete production. So that's another reason why we have launched this in the industry. Again, it's the assembly of digital solutions we already had and the need in the industry to enhance supply chain visibility. So that's the second one. And the third one is based on the solution we already had for a long time in planning, which we typically did in logistics, where we have a lot of customers in transportation for planning and also a lot of customers that where we use the workforce planning module to help them enhance their work. Now this is a niche for field services, where field engineers are filled with our plant deployed and linked, of course, to ERP systems to backfill their orders to help them order parts wherever things are broken. So that's again where we combine digital solutions into addressing a market team, which is truly an issue today because you will know that field engineers are very scarce today, even more scarce than IT personnel. So helping them plan efficiently is an important step forward. And that's the rationale behind the 3 market solutions we're launching today.
And does it mean -- kind of coming back to my question on the market potential, how these 3 themes actually tie into the objective of growing the revenue by 5%, 10%? For example, back in the day were you kind of anticipating releasing new market themes that would actually boost the revenue in the upcoming years or the 5% to, let's say, 8% target in annual growth, that was basically relying mostly on the 5 propositions that you already had. So that kind of thinking on the market potential of all those 3 themes.
Yes, yes, yes. Well, I think what you should see as well is that it is the next step in the transformation of our company. We have been transforming from an IT supplier to an IT company that addresses digital issues. And now we're transforming again the combination of digital solutions to address market and business issues. So the underlying trend is the transformation of our company. Have we calculated that in revenue growth projections? To be honest, we can achieve the 5% to 8% based on our digital solutions as well. It's more the transformation that's under the hood, which makes us even a more valuable company with more valuable business propositions.
If I may add to that question. Does it come -- am I understanding correctly that you apply the digital solutions you have or developed in-house to these themes? And do they then also come with different revenue profiles, more recurring or higher margin, probably, yes, because they apply to themes as the recent propositions?
Yes. Well, in our strategies what we announced whilst repeating solution after solution whether it's digital or a market solution, we will identify pockets of reuse. We will -- as we do now, we will be reusing. And this is a margin driver. That's what we already see now in our business proposition revenue. Margin is higher in business propositions than in classical services. And this is because we reuse knowledge, we reuse digital components, we reuse coat snippets. And in our plan, the portion of reuse over clients will increase as we will be doing more and more same kind of projects and extending our IP.
Whittaker. My first question is about the big problem of hacking within organizations. Are there any new disturbing trends in hacking? Or is it like it was, a big problem, but no really new things?
Yes. But if I have to refer to the past 6 months, I wouldn't say that threat has increased, although the war in Ukraine, we would have expected a higher activity from that side. Up to date, we didn't notice at our clients that this has been an increased threat from that side. That being said, the threat is still high. And a lot of our clients are not too well defended, to be honest.
So it remains a problem, but it's not bigger, but it could really...
Not to my knowledge.
In the next months or years. I do have a few questions about the geographic situation. Looking at the EBITDA per region on Page 6, we see wonderful Belgium and Luxembourg, as it always was, I could say. However, I do see a widening of the gap in between Belgium and Luxembourg and the Netherlands. And I do see -- or remember 2 things. The age of the people in the Netherlands is rather higher than in Belgium. I presume it's still the case. And is that a reason why Belgium and Luxembourg remains with a high productivity and the productivity was somewhat lower in the Netherlands. And looking at recruitment, are the differences in success renewing your personal age? Are there differences in between Belgium and Luxembourg on one hand and the Netherlands on the other hand? And could you elaborate on the rotation in between your organization? Does it differ in between Belgium, Luxembourg and the Netherlands?
Thank you for a lot of questions. Let me start with addressing by the business perspective. Belgium is doing extremely well and is performing above the peer average. And this has been so for years and they're still going strong. So I'm very satisfied with Belgium and Luxembourg. In Netherlands, I'm very positive about the trend. Things have been well-organized, reorganized. Things are good on track. And I'm looking further than 1 or 2 quarters. So beneath the figures we're seeing, and we can elaborate on the figures, I'm quite positive on the trend we have now in the Netherlands. And I'm confident in the future, they will keep up the pace. That being said, and then I'm diving into one of the first question you mentioned, yes, there is an age difference in the 2 countries. And I think on top of my head should be somewhere...
8 years.
8, 9 years.
Yes.
So that's important, and that's also reflected in the cost base, thus in margin potential. That being said in the Netherlands as well, there is a very good collaboration with a lot of universities and high schools and that's paying off. Unfortunately, in our company, every year, everybody becomes 1 year older. So we need to recruit a lot of young people to not only catch up but get our age down. And I think in the last 5 years, the average age in the Netherlands has gone down. So there as well, we need to accelerate growth. It's young potential, which we're doing in the Netherlands, but there's still a lot of work to do there, yes.
Yes. Do we need to expand in marketing expenses to get new people or does that help?
Surely. Surely. And that's what Joyce already elaborated. When we launched a campaign, there is an immediate response. And that's why inflow sometimes has a seasonality when you launch and when you receive people. That's quite one-on-one linked to the campaigns. Recruitment has become increasingly tough. We're better at retention, we should increase in recruitment, meaning that we will have to launch more and more intensive campaigns. It's just a fact. It's become more and more tight, yes.
Are there developments in the turnover of personnel? People going to other companies or...
It has come down last year, and it has been stable for the first half year. So we see that we are doing the right things. Looking at retention, we would like to get it down just a bit more. But I think we are looking also at competitors. We are at a good level, like we were last year. But again, it will save us a lot of money if we are getting a bit better. So that's also where a lot of focus and attention is going to.
One more question, Boudewijn from Teslin. You had the legal dispute pending, and I think you always indicated that this half year or last half year, you would settle. Has it been settled already and did the provision cover the settlement?
No, there's still a higher appeal going on. So there's no settlement and no financial update on that part.
Sure. And timing-wise, do you think it would settle this year or later?
I think after this year, because we are looking at a court date, which will get end of the year, maybe even next year, so.
All right. If there are no further questions, thank you for your attendance here and on our webcast, and this concludes our presentation. Thank you.
Thank you.