Third quarter 2023 results and extended quarter presentation
Third quarter 2023 results
Grethe Bergly, CEO | Ove B. Haupberg, CFO
1 November 2023
The Munch Museum, Oslo Photo: Hunven-Clements Photography
Introduction and highlights
GRETHE BERGLY | CEO
multiconsult-ir.com
This report includes forward-looking statements, which are based on our current expectations and projections about future events. All statements other than statements of historical facts included in this notice, including statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditures, projected costs and our plans and objectives for future operations, including our plans for future costs savings and synergies may be deemed to be forward-looking statements. Words such as "believe," "expect," "anticipate," "may," "assume," "plan," "intend," "will," "should," "estimate," "risk" and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. You should not place undue reliance on these forward-looking statements. In addition, any forward-looking statements are made only as of the date of this notice, and we do not intend and do not assume any obligation to update any statements set forth in this report.
Bridging the past and the future
The Munch Museum, Oslo Photo: Multiconsult / Jo Gaute Fornes
multiconsult-ir.com
KEY FIGURES | 3Q AND YTD 2023
Johan Bojer High School, Trøndelag County Photo: Elisabeth Wærnes
INVESTING FOR GROWTH
- Increased net operating revenue and strong organic growth
- Good sales and all-time high order backlog
- Significant increase in number of employees
- Unsatisfactory low billing ratio of 67.8 per cent in the quarter
- New EVP Architecture Kristin O. Augestad
- Strengthened market position through acquisition and awarded contracts
Elvely, Asker municipality| Office bulidning Ill: A-LAB
LARGE SALES & NEW CONTRACTS
- E10 Hålogalandsvegen
- The Norwegian Defence Estate Agency
- Museum of the Viking Age
- Ytre Steinsund bridge
- Snøhvit LNG plant- Power from shore
- Vågåmo Flood protection
- Hellesylt Water treatment plant
ORDER INTAKE MARKET 3Q 2023
- Continued strong sales
- All time high and diversified order backlog
- High volume of ongoing projects
- Market for Multiconsult's services has levelled off
ONGOING PROJECTS ORDER BACKLOG
- New Rikshospitalet
- The Fornebu Line
- Water supply to Oslo
- Yggdrasil Power from Shore
- Construction City
- Vesterås hospital
PEOPLE & ORGANISATION
- 3 717 employees, increase of 12.3% y-o-y
- Full-time equivalent (FTE) 3 469 in the quarter an increase of 8.7%, from (3 191) y-o-y
- 225 new employees
PEOPLE ORGANISATION
- Kristin O. Augestad appointed new EVP Architecture
- Leif Olav Bogen appointed new EVP Region Oslo
- Kari Sveva Dowsett appointed new EVP Region Norway
- Kristina Jordt Adsersen new CEO in LINK Arkitektur A/S
EXCELLENCE
- LINK Arkitektur has been named the year's most innovative real estate player in Sweden for the innovative working method The Augmented Architect
- Svein Bjørberg and Elisabeth Schjølberg honoured for their extraordinary work by external stakeholders
- Håkon Duus wins the "Young Advisor of the Year" – RIF (Rådgivende Ingeniørers Forening)
FROM EMPLOYEE SHARE PROGRAMME TO CO-OWNERSHIP
- Employee share program since 2015
- Participation of approx. 25% of employees annually
- Strong belief that employee ownership contributes to long-term increased shareholder value
- Make measure to increase the number of co-owners to maximise the effect co-ownership can provide
- Launch programme for increased awareness
- Communication and training
- 40 complimentary shares for all eligible employees(*) in the group
*all permanent employees with a fixed salary who, at the time of subscription, work at least 50 per cent in Multiconsult group or a majority-owned subsidiary
Financial review
OVE B. HAUPBERG | CFO
multiconsult-ir.com
FINANCIAL HIGHLIGHTS | 3Q 2023
- Net operating revenues increased to NOK 977.0 million (876.0), a y-o-y growth of 11.5%
- Organic revenue growth of 8.4% y-o-y
- EBITA of NOK 29.2 million (67.8) down NOK 38.6 million y-o-y, with one less working day
- EBITA margin equal to 3.0% (7.7)
- Strong order intake of NOK 1 349 million
- Billing ratio of 67.8%
- Other opex* ratio 19.2%, compared to 19.0% last year
Consolidated key figures
NOK million |
3Q 2023 |
3Q 2022 |
Change |
FY 2022 |
| Net Operating Revenues |
977.0 |
876.0 |
11.5% |
4 189.2 |
| EBITA |
29.2 |
67.8 |
(56.9%) |
408.5 |
| EBITA margin % |
3.0% |
7.7% |
(4.7pp) |
9.8% |
| Order intake |
1 349 |
945 |
42.7% |
5 195 |
| Order backlog |
5 094 |
3 424 |
48.8% |
3 608 |
Billing
ratio |
67.8% |
68.3% |
(0.5pp) |
70.6% |
| Number of employees |
3 717 |
3 310 |
12.3% |
3 353 |
| Full-time equivalents (FTE) |
3 469 |
3 191 |
8.7% |
3 134 |
FINANCIAL HIGHLIGHTS | YTD 2023
- Net operating revenues of NOK 3 441.0 million, an increase of 12.4% y-o-y
- Organic growth in net operating revenues was 10.7%
- EBITA of NOK 301.1 million, down NOK 10.6 million y-o-y
- EBITA margin equal to 8.8% (10.2)
- Reported profit for the period was NOK 203.7 million (227.4)
- Earnings per share 7.46 NOK (8.30)
- Other opex* ratio 16.7% compared to 16.9% same period last year
- All-time high order backlog of NOK 5 094 million
- Billing ratio of 70.4%
Consolidated key figures
NOK million |
YTD 2023 |
YTD 2022 |
Change |
FY 2022 |
| Net Operating Revenues |
3 441.0 |
3062.6 |
12.4% |
4 189.2 |
| EBITA |
301.1 |
311.7 |
(3.4%) |
408.5 |
| EBITA margin % |
8.8% |
10.2% |
(1.4pp) |
9.8% |
| Order intake |
5 495 |
3 636 |
51.1% |
5 195 |
| Order backlog |
5 094 |
3 424 |
48.8% |
3 608 |
Billing
ratio |
70.4% |
70.7% |
(0.3pp) |
70.6% |
| Number of employees |
3 717 |
3 310 |
12.3% |
3 353 |
| Full-time equivalent (FTE) |
3 340 |
3 125 |
6.9% |
3 134 |
FINANCIAL HIGHLIGHTS
Note to comparable figure: 3Q 2020: EBIT of NOK 68.1 million, 9.1% margin (EBIT of NOK 98.1 million (ex nextLEVEL restructuring cost of NOK 30.0 million) reflecting an EBIT margin of 13.1%) Rolling 12 months
Shaded area: incl. one-offs restructuring cost
EBITA, margin EBITA
Billing ratio
HIGH ORGANIC GROWTH
|
REGION OSLO |
|
REGION NORWAY |
|
ARCHITECTURE |
|
INTERNATIONAL |
|
|
•
increased by 10.1%
•
EBITA margin 6.9%
•
Billing ratio down to
68.2% |
Net operating revenues |
Net operating revenues
•
increased by 5.0%
•
EBITA margin 3.1%
•
Income recognition on
insurance settlement in
comparable period |
|
Net operating revenues
•
increased by 30.8%
•
Negative EBITA margin
6.9%
•
Financial result includes
A-lab |
|
Net operating revenues
•
increased by 23.0%
•
EBITA margin 7.2%
•
Improved billing ratio |
|
Amounts in NOK million
(except percentage) |
3Q 2023 |
3Q 2022 |
3Q 2023 |
3Q 2022 |
3Q 2023 |
3Q 2022 |
3Q 2023 |
3Q 2022 |
Net operating
revenues |
371.5 |
337.3 |
390.7 |
372.0 |
149.7 |
114.5 |
69.2 |
56.3 |
| EBITA |
25.6 |
27.7 |
11.9 |
45.0 |
(10.3) |
(4.4) |
5.0 |
4.2 |
| EBITA margin % |
6.9% |
8.2% |
3.1% |
12.1% |
(6.9%) |
(3.9%) |
7.2% |
7.5% |
| Billing ratio % |
68.2% |
69.6% |
66.5% |
68.7% |
70.1% |
68.4% |
70.2% |
67.3% |
STRONG FINANCIAL POSITION
Shaded areas show IFRS 16 (non-cash) effects on Cash Flow (CF) from opeations and financing
- Cash Flow from operations
- NOK 369 million (416)
- Change in working capital
- 3Q negative NOK 142 million (74)
- YTD negative NOK 362 million (311)
- Cash effect dividend NOK 247 million
- Cash effect acquisition NOK 67 million
- Net interest-bearing debt
- NIBD NOK 440.2 million
- Gearing ratio 1.11 (NIBD excl. IFRS16, restricted cash/EBITDA)
- Strong financial position
NIBD excl. IFRS 16 liabilities
Net cash flow from opera�ng ac�vi�es Net cash flow used in investment ac�vi�es excl. acquisi�ons
Free cash flow excl.cash used on aquisi�ons LTM
CLOSING REMARKS
GRETHE BERGLY | CEO
multiconsult-ir.com
- The market outlook for Multiconsult's services is still good but has levelled off
- Significant variations in market outlook across geographical and business areas
- Mobilise to navigate in more complex and uncertain markets
- Diversified market outlook for business area Buildings & Properties, with cooling down in some parts and positive developments expected in others
- Benefit from the green shift and rising demand for sustainable solutions
- Well-positioned for the future with a high volume of ongoing projects, a diverse portfolio, and a high order backlog
Fv. 353 Rugtvedt – Surtebogen, Vestfold and Telemark county Ill: Hæhre / Multiconsult
FIT FOR THE FUTURE
GRETHE BERGLY | CEO
multiconsult-ir.com
Norwegian powerhouse with services performed by 3 700 skilled architects and engineers
Architecture, consulting and engineering within the construction industry in Norway and abroad
WHO WE ARE WHAT WE DO WHO WE DO IT FOR
10 000 projects for > 4 500 public and private clients in more than 20 countries annually
STAYING AHEAD – OUR NEXT JOURNEY
STABILISED AND DEVELOPMENT
- Profitability in line with target
- Four consecutive years within growth ambition
- Cost control
- Strengthened through strategic M&A
- Strong EVP team
POSITIONED FOR FURTHER GROWTH
- Solid market position and strong order backlog
- Strong position towards the green shift – net zero enabler
- Strong and diversified client base, with long term relations
- Position at top tier as preferred employer
- Excellence through awards and recognition
FINANCIAL RETURN
Period 2020-2022
- EBITA of NOK 1.1 billion
- EBITA margin of 9.7%
- Average annual growth 7%
- Paid out dividend NOK 628 million
- Average payout ratio of 80% of net profit
GROWTH AND PROFITABILITY STRATEGIC POSITION MARKET
STRATEGIC ACQUISITIONS 2021-2023
-
1 position within buildings and properties
-
1 position in integrated consultancy and architecture services in Norway
- Strengthened market position geographically
- Strengthened position throughout the value chain
| Introduction of new services |
|
|
|
We enable value-creating projects -when the customer succeeds, we succeed
We shape the industry as an integrating player
Preferred partner towards the green shift
We create an environment where competence is nurtured and thrives
We challenge tradition and recognise opportunities to innovate new business
Building long lasting client relations through groundbreaking projects
- Won Award for building quality 2022 The ZEB laboratory (Zero emission building)
- Recognised by clients through lasting and growing engagement in supporting value-creating projects
A driving force in industry development through technology development and partnerships integrating the value chain
- Technology innovation as part of project execution
- Engaging in partnerships to support our clients in their most challenging projects
Investing in strategic development to provide the capabilities needed to support our clients in the green shift
- Our expertise supports clients in choosing climate-friendly solutions and developing renewable energy
- In the last 12-18 months, we have won and delivered assignments for the green shift, natural hazards and for energy-efficient buildings
- Industry Climate We are part of developing the future energy solutions CCS, solar and wind power, hydrogen and ammonia
Developing and attracting talents to solve the most complex challenges in our future society
- Multiconsult Academy and our career program as foundation for developing and retaining our most valuable asset
- A continuous focus on being the preferred employer for graduates and professionals
We systematically address and develop new technology and business opportunities
- Our Alinea and "Explorer Factory" support internal development projects and business development
- Assessed and invested in new business opportunities and digital innovation (7 Analytics and Anker DB)
MARKET & SALES
THOR ØRJAN HOLT | EVP SALES
multiconsult-ir.com
MULTICONSULTS MARKET
Architecture, consulting and multidisciplinary engineering within the construction industry
4 500 CLIENTS > 10 000 PROJECTS > 20 COUNTRIES
New Psychiatric Unit Viborg, Denmark Ill: Kumulus Agency / LINK Arkitektur
Source: Byggeindustrien: Largest engineering and architecture companies 2022, Branchbevakningen
| Engineering |
~ |
14% |
| Architecture |
~ |
15% |
MULTICONSULT AMONG NORWEGIAN PEERS
BUILDINGS & PROPERTIES
KEY DRIVERS IN THE MARKET
- Population growth
- Public investment plans
- Private sector demand
- Energy saving and sustainability
- Taxonomy and EU directives
MARKET OUTLOOK
CLIENTS OPERATING REVENUES 2019-2023 | NOK million MARKET POSITION
- Leading position within integrated architecture and building design in Norway
-
1-position hospital
-
1-position HVAC
-
1-position geotechnical
MOBILITY & TRANSPORTATION
CLIENTS
- Norwegian Public Roads Administration
- Bane NOR
- Private contractors
- Counties and municipalities
OPERATING REVENUES 2019-2023 | NOK million
MARKET POSITION
- A leading position in Norway within road, rail and light-rail design
- Preferred partner for several major contractors
-
1-position within geotechnical design of infrastructure projects
ENERGY & INDUSTRY
KEY DRIVERS IN THE MARKET
CLIENTS MARKET POSITION OPERATING REVENUES 2019-2023 | NOK million
MARKET OUTLOOK
WATER & ENVIRONMENT
KEY DRIVERS IN THE MARKET
- Public investment plans
- Climate change
- New EU and national regulations
- Large maintenance backlog of infrastructure
- Nature and natural diversity
MARKET OUTLOOK
CLIENTS MARKET POSITION OPERATING REVENUES 2019-2023 | NOK million
- A leading position within water and environmental consulting and design
-
1-position marine environment and geotechnical investigations
-
1-positon within authority planning and approval processes
A FEW KEY CUSTOMERS CONSTITUTE THE MAJORITY OF MULTICONSULT'S TOTAL REVENUE
FINANCIAL TARGETS
OVE B. HAUPBERG | CFO
multiconsult-ir.com
EBITA Margin* 10%
*measured on an annual basis, exclusive extraordinary items
STABLE PERFORMANCE AMONG TOP PLAYERS IN THE INDUSTRY
Source: Annual/quarterly reports
EBIT/EBITA as percentage of net operating revenues – reporting varies somewhat between companies; top tier peers
including listed competing companies among top three; YTD including relevant reported quarters
AMBITION | REVENUE GROWTH
Ambition of CAGR 8-10% revenue growth over the cycle* , including M&A
*cycle 2022-2026
- Maintain financial strength
- Taking into consideration:
- Financial position and balanced loan portfolio
- Expected organic investment requirements, M&A considerations
- Seasonal change in working capital
- Market outlook and uncertainty
- Predictable and stable dividend policy
Gearing ratio
Normal: 1.0 - 2.0x
max 2.5x Special: 3.0x up to 18 months
Equity ratio > 25%
- Moderate and selective strategy with primary focus on core business
- Continuously monitoring opportunities
- ‒ also including opportunities within digitalisation, sustainability and new business models
Ambition - Payout ratio in % of net profit
AMBITION | DIVIDEND PAYOUT RATIO
• When deciding the annual dividend level, the Board of Directors will take into consideration the various aspects of the financing strategy, such as expected cash flows, capital expenditure plans, financing requirements and appropriate financial flexibility
Ambition to distribute at least
50%
of the group's net profit annually
CLOSING AND Q&A
GRETHE BERGLY | CEO OVE B. HAUPBERG | CFO
STABILISED AND DEVELOPMENT
- Profitability in line with target
- Four consecutive years within growth ambition
- Cost control
- Strengthened through strategic M&A
- Strong EVP team
POSITIONED FOR FURTHER GROWTH
- Solid market position and strong order backlog
- Strong position towards the green shift – net zero enabler
- Strong and diversified client base, with long term relations
- Position at top tier as preferred employer
- Excellence through awards and recognition
FINANCIAL RETURN
Period 2020-2022
- EBITA of NOK 1.1 billion
- EBITA margin of 9.7%
- Average annual growth 7%
- Paid out dividend NOK 628 million
- Average payout ratio of 80% of net profit
FINANCIAL YEAR 2023
4Q and FY -
2023 results |
06 Feb 2024 |
| Annual report 2023 |
14 Mar 2024 |
FINANCIAL YEAR 2024
1Q –
2024 results |
08 May 2024 |
| Annual general meeting |
11 Apr 2024 |
2Q and 1H -
2024 results |
21 Aug 2024 |
3Q -
2024 results |
06 Nov 2024 |
The Kronstad pedestrian and bicycle tunnel, Bergen Ill: Hundven Clements Photography
THANK YOU FOR YOUR ATTENTION
Investor relations in Multiconsult ASA E-mail: [email protected] Web: Multiconsult-ir.com