Quarterly Report • May 20, 2020
Quarterly Report
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Illustrasjon: Hardangerbadet, Hundved-Clements Photography.
"Multiconsult delivered a solid Q1 with revenues growth and significant improved profitability compared with 2019. The improvement comes on the back of solid customer deliveries and is also caused by significantly reduced operating expenses resulting from the nextLEVEL improvement programme. We are well underway, but I believe there is more potential.
At the same time we are delivering solid sales resulting in an all-time high order backlog at the end of the quarter. This is very important going into a period of more uncertainty caused by the Covid-19 situation. I would like to thank all of our dedicated Multiconsult employees for their relentless efforts and dedication in achieving these improvements".
Grethe Bergly CEO of Multiconsult ASA
| Amounts in TNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| FINANCIAL | |||
| Net operating revenues | 993 644 | 944 242 | 3 435 835 |
| Employee benefit expenses | 715 943 | 680 486 | 2 654 431 |
| Other operating expenses | 109 952 | 125 422 | 482 271 |
| EBITDA | 167 749 | 138 334 | 299 133 |
| EBITDA margin | 16.9% | 14.7% | 8.7% |
| EBIT | 117 464 | 92 469 | 106 329 |
| EBIT margin | 11.8% | 9.8% | 3.1% |
| Reported profit for the period | 84 120 | 58 957 | 35 110 |
| Other operating expenses excluding IFRS 16 margin | 15.3% | 17.4% | 18.7% |
|---|---|---|---|
| Billing ratio | 69.4% | 70.0% | 69.2% |
| Number of employees | 2 984 | 2 972 | 2 994 |
| Order intake | 1 305 543 | 1 171 824 | 4 348 086 |
| Order backlog | 3 098 737 | 2 864 999 | 2 967 609 |
Multiconsult first quarter EBIT came in at NOK 117.5 million. In the first quarter net operating revenues were up 5.2% y-o-y to NOK 993.6 million. The nextLEVEL improvement programme is on-track, partly reflected in a reduction in other operating expenses of 12.3% y-o-y to NOK 110.0 million. The order intake was solid at NOK 1 306 million giving a record high order backlog of NOK 3 099 million.
(Figures in brackets = same period prior year or relevant balance sheet date 2019).
Net operating revenues increased by 5.2% to NOK 993.6 million (NOK 944.2 million) compared to the same quarter last year. The increase in net operating revenues is exclusively organic. Higher activity, and higher average group billing rates compared to the same period in 2019 contribute positively to the growth in net operating revenues. There was a calendar effect of one more working day with an impact of NOK 13.4 million.
Operating expenses consist mainly of employee benefit expenses and other operating expenses. Reported operating expenses increased by 2.5% to NOK 825.9 million (NOK 805.9 million). Other operating expenses decreased by 12.3%, suggesting that the nextLEVEL improvement programme is ontrack, other operating expenses excluding IFRS 16 was reduced with NOK 12.1 million, an improvement of 7.3% compared to same quarter last year – partly a nextLEVEL effect. Employee benefit expenses increased in line with manning level and regular salary adjustment for the Norwegian workforce.
EBITDA was NOK 167.7 million (NOK 138.3 million), an increase of 21.3% compared to the same period last year.
EBIT was NOK 117.5 million (NOK 92.5 million), an increase of 27.0% y-o-y, reflecting an EBIT margin of 11.8%.
Net financial items were an expense of NOK 6.8 million (expense of NOK 14.9 million). The improvement compared to Q1 2019 is mainly related to currency gains.
Group tax rate was 23.3% (23.3%).
Reported profit for the period was NOK 84.1 million (NOK 59.0 million).
Total assets amounted to NOK 2 828 million (NOK 2 674 million), and total equity amounted to NOK 686.9 million (NOK 581.4 million). The group held cash and cash equivalents of NOK 62.9 million (NOK 73.6 million).
In March 2020 Multiconsult refinanced its loan portfolio with Nordea. This included an overdraft loan facility of NOK 320.0 million which is part of a cash pool that includes the majority of the operational units in the group. The refinancing also included a new 3-year revolving credit facility of NOK 200.0 million until March 2023. Multiconsult have through the new loan portfolio improved loan margins and covenants. Undrawn available amounts under the credit facilities were NOK 348.0 million at the end of the quarter.
Net interest-bearing liabilities amounted to NOK 1 031 million (NOK 1 006 million at 31 December 2019). Adjusted for IFRS 16 lease obligations, net interest-bearing debt is NOK 95.2 million (NOK 91.6 million at 31 December 2019).
Net cash flow from operating activities was positive NOK 48.0 million (negative NOK 62.0 million). Net cash flow from operating activities is affected by increase in revenues, offset by decrease in working capital mainly due to a reduction in work in progress.
Net cash flow used in investment activities was NOK 10.5 million this quarter (NOK 24.5 million), related to ordinary asset replacement.
Net cash flow from financing activities amounted to negative NOK 51.4 million (negative NOK 1.8 million) which is mainly affected by instalments and interest on lease liabilities related to IFRS 16. As part of the refinancing and re-payment of the previous NOK 172.0 million term loan, the company made a drawdown of NOK 172.0 million on the new NOK 200.0 million revolving credit facility. Hence, the refinancing did not have any net effect on cash flow from financing activities.
The order backlog at the end of the quarter was at an alltime high of NOK 3 099 million (NOK 2 865 million). Business areas Buildings & Properties and Transportation currently have the largest proportion of the order backlog, while Water & Environment increased compared to the same period previous year. The size and timing of execution of the order backlog varies significantly between the business areas and locations.
Order intake during the first quarter increased by 11.4% compared to the first quarter in 2019. Business area Water & Environment decreased, while all other business areas experienced an increase.
Significant contracts this quarter were Sykkeltunnel Fløen-Kronstad for Vestland fylkeskommune, Arena Fredrikstad for Østfold Fylkeskommune (Viken Fylkeskommune), Fv. 350 Foruskanalen Bussvei for Rogaland fylkeskommune, Jølstra kraftverk for Jølstra Kraft DA, Västerås sjukhus for Region Västmanland and for NTNU for Backe Trondheim.
The order backlog does not reflect the total volume to be executed under awarded frame agreements and includes only call-offs that have been signed under these agreements. Some of the large frame agreements are for example Fornebubanen for Oslo kommune, submarine maintenance facilities and airbase facilities with Forsvarsbygg and safety and RAMS with Bane NOR.
The improvement programme nextLEVEL was introduced at the end of 2019 and is one of our key measures to improve performance and profitability. This programme has had strong focus throughout the organization in the first quarter.
In total, nextLEVEL has a target of 150 million in annual profitability improvement to be realised over a period of 18 months. The nextLEVEL programme is ahead of suggested time schedule and by mid-May Multiconsult has committed
Multiconsult's reporting segments has historically been presented as four segments. As from 2020 Multiconsult's reporting segments will be five segments: Region Oslo, Region Norway, Energy, International and LINK arkitektur. Overhead expenses such as administrative services, office rent and depreciation are allocated to individual segments, however certain corporate cost and group-wide cost are not allocated to the geographical segments. Comparison to same period last year has been re-stated using the new principles, and is made on the new structure. Also see note 3 – Accounting Policies.
This segment offers services in seven business areas and comprises the Oslo region, in addition the segment includes Multiconsult's internal segment Large Projects in Norway.
to 64% (NOK 95.0 million)] of the target amount, up from 37% mid-February 2020. In addition to already initialised initiatives, the programme will focus further on areas such as travel policies, office space portfolio and "ways of working" with experiences, partially, from the ongoing Covid-19 situation. Based on this we see increased potential for reduced office space. As a consequence, the one-off restructuring cost related to nextLEVEL may increase to NOK 60-70 million - up from NOK 30-40 million previously indicated.
| Amounts in MNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Net operating revenues | 329.6 | 309.4 | 1 090.9 |
| EBIT | 57.7 | 40.4 | 53.0 |
| EBIT % | 17.5% | 13.1% | 4.9% |
| Order intake | 337.5 | 432.9 | 1 431.3 |
| Order backlog | 985.1 | 978.2 | 1 026.5 |
| Billing ratio | 72.9% | 70.8% | 70.0% |
| Number of employees | 796 | 818 | 817 |
The increase in net operating revenues of 6.5% in the quarter was driven by higher billing rate and higher billing ratio compare to same period last year.
Operating expenses came in 0.8% higher than in the same period in 2019. Employee benefit expenses increased in line with manning level and regular salary adjustment for the workforce. Other operating expenses decreased significantly, mainly due to lower use of consultancy services and lower office expenses.
Order intake in the first quarter decreased by 22.0% compared to the first quarter in 2019. There was a decrease in order intake in all business areas except City & Society.
Order backlog for the segment at the end of the first quarter is NOK 985.1 million, with business areas Buildings & Properties and Water & Environment as the largest proportions. The order backlog increased by 0.7% compared to the first quarter in 2019. Most of the business areas increased except Transportation, Oil & Gas and City & Society.
This segment offers services in seven business areas and comprises all offices outside Oslo with presence in all larger cities in Norway and several other locations, a total of 23 offices.
| Key figures – Region Norway | |
|---|---|
| -- | ----------------------------- |
| Amounts in MNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Net operating revenues | 391.0 | 376.6 | 1 381.9 |
| EBIT | 42.9 | 39.6 | 56.5 |
| EBIT % | 11.0% | 10.5% | 4.1% |
| Order intake | 561.4 | 397.4 | 1 437.5 |
| Order backlog | 732.7 | 625.4 | 580.8 |
| Billing ratio | 66.6% | 68.0% | 67.9% |
| Number of employees | 1 065 | 1 045 | 1 068 |
Compared to first quarter 2019 net operating revenues increased by 3.8%. Billing rates were at a higher level and impacted net operating revenues positively. Growth was partly offset by a lower billing ratio that came down by 1.4pp.
Operating expenses increased by 2.9% in the quarter. Considerably lower other operating expenses such as travel and office expense was offset by higher employee benefit expenses.
Order intake in the first quarter increased by 41.3% compared to the first quarter in 2019. There was an increase in all business areas except Renewable Energy.
Order backlog for the segment at the end of the first quarter was at NOK 732.7 million, with business areas Buildings & Properties and Transportation as the largest proportions. The order backlog increased by 17.2% compared to the first quarter in 2019. All business areas increased except Renewable Energy.
The segment Energy is represented in Multiconsult's offices in Oslo and Trondheim together with the subsidiary Multiconsult UK. The segment offers national and international services in the business area Renewable Energy with minor activity in Water & Environment.
| Amounts in MNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Net operating revenues | 69.5 | 64.7 | 250.6 |
| EBIT | 3.5 | (1.2) | (10.6 ) |
| EBIT % | 5.0% | (1.9%) | (4.2%) |
| Order intake | 88.7 | 124.3 | 381.0 |
| Order backlog | 263.8 | 246.2 | 262.8 |
| Billing ratio | 59.4% | 62.8% | 62.8% |
| Number of employees | 199 | 204 | 199 |
The increase in net operating revenues of 7.5% in the first quarter was mainly driven by higher billing rate. Lower activity in Multiconsult UK in the period compared to same period last year have a negative effect on the net billing ratio.
Operating expenses came in 0.3% higher than in the same period in 2019. Other operating expenses decreased significantly, mainly due to lower use of consultancy and reduced office- and travel expense. Employee benefit expenses increased in line with manning level and regular salary adjustment.
Order intake in the first quarter decreased by 28.7% compared to the first quarter in 2019. However, sales in Q1 2019 were considered to be higher than normal.
Order backlog for the segment at the end of the first quarter increased by 7.2% to NOK 263.8 million. More than 98% of the order backlog in the segment is in business area Renewable Energy.
This segment comprises LINK arkitektur with its 15 offices in Norway, Sweden and Denmark.
| Amounts in MNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Net operating revenues | 151.0 | 152.3 | 535.8 |
| EBIT | 6.7 | 16.8 | 11.0 |
| EBIT % | 4.5% | 11.0% | 2.1% |
| Order intake | 153.5 | 170.0 | 728.6 |
| Order backlog | 576.9 | 529.4 | 620.2 |
| Billing ratio | 73.4% | 76.0% | 74.0% |
| Number of employees | 497 | 500 | 489 |
The decrease in net operating revenues of 0.9% in the first quarter was driven by a reduction in activity level and lower billing ratio partly offset by a higher billing rate.
Operating expenses increased by 6.7% in the quarter mainly due to a currency translation effect for currency for the activity in Sweden and Denmark. This effect is reflected both in employee benefit expenses and other operating expenses.
The performance from Link arkitektur AS in Norway is at a good level in the quarter, however, both the businesses in Sweden and Denmark are facing a more challenging market and are loss-making.
Order intake in the first quarter decreased by 9.7% compared to first quarter in 2019. The order intake this quarter was mainly within the business area Buildings & Properties.
Order backlog for the segment at the end of first quarter increased by 9.0% to NOK 576.9 million. More than 90% of the order backlog in the segment is in business area Buildings & Properties.
This segment comprises the subsidiaries Multiconsult Polska and Iterio AB.
| Amounts in MNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Net operating revenues | 61.2 | 51.8 | 206.9 |
| EBIT | 6.5 | 5.9 | 17.3 |
| EBIT % | 10.6% | 11.3% | 8.4% |
| Order intake | 164.5 | 47.2 | 369.6 |
| Order backlog | 566.9 | 415.1 | 497.6 |
| Billing ratio | 78.5% | 79.5% | 73.5% |
| Number of employees | 308 | 278 | 299 |
At 31 March 2020 the group had 2 984 (2 972) employees. The employee turnover ratio for the group for the period March 2019 to March 2020 was 12.6% (10.5%). As per mid-May the full-time equivalent of 115 employees (3.8% of the total workforce) are on temporary leave due to the Covid-19 pandemic.
Net operating revenues increased by 18.2% in the first quarter mainly driven by higher activity level, which resulted in net recruitment and a higher manning level in Iterio AB and Multiconsult Polska.
Operating expenses increased by 19.3% compared to same quarter in 2019, the increase is mainly due to higher activity level and increase in manning level. Other operating expenses increased slightly lower than the increase in manning level due to lower travel and marketing expenditures.
Order intake in the first quarter increased by 248.7% mainly due to higher order intake in the business area Transportation in Multiconsult Polska.
Order backlog for the segment at the end of the first quarter increased by 36.6% to NOK 566.9 million. Business area Transportation is the largest business area with more than 90% of the order backlog in the segment. Business area Renewable Energy had the highest relative growth in the quarter.
On 8 May, Universums annual attractivity survey among engineering students, ranked Multiconsult as the industry's most attractive employer and number three among all companies in Norway.
On 5 May, Multiconsult announced that Consto has been awarded an EPC contract for the construction the new hospital in Hammerfest with LINK arkitektur AS and Multiconsult Norge AS as subcontractors. The total value for the Multiconsult group, is expected to be approximately NOK 57 million.
On 22 April, Multiconsult held the annual general meeting. The general meeting passed a resolution that Tove Raanes is elected as a new member of the board, and Sverre Hurum as a elected deputy board member. The annual general meeting also approved the 2019 annual accounts.
On 20 April, Multiconsult announced an extension of multiple call-offs under the Fornebubanen frame agreement. The value of the call-off is approximately NOK 100 million for Multiconsult, and work has already started and will last until September 2020.
These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances in the future.
Multiconsult is at the beginning of a turnaround and the nextLEVEL programme is on track. The order backlog is at a historically high level and provides a good foundation, supported by frame agreements generated from a broad customer base.
The Covid-19 situation has resulted in considerably increased uncertainty and will be impacting our business. Multiconsult closely monitors the development of Covid-19 situation and evaluates potential outcomes based on various scenarios. While we so far have seen a relatively modest negative impact of the Covid-19 situation, it is currently not possible to predict the consequences for the industry and for Multiconsult going forward. A softening of the market can be expected in parts of our business as a direct consequence of the Covid-19 situation. The company is taking prudent, responsible and necessary actions, to secure our people, our business, and, in close cooperation with our customers, our deliveries so that our clients are affected to the minimum extent possible.
Subject to comments related to the Covid-19 situation, the overall market outlook for Multiconsult's services is good across most business areas, and with a good pipeline of potential projects coming up for tender over the next 12 months. There are however more uncertainties in particular within buildings and properties (including architects) and in certain areas within our energy sector, where a softening of the market is expected.
With a solid market position, leading competences, technology and solutions for our customers, Multiconsult believes it is well placed to handle the challenges of the current uncertainties facing the economy and our industry.
The extraordinary risk factor due to the ongoing pandemic of coronavirus disease 2019 (Covid-19), is described under Risk and Risk Management in the 2019 Annual Report and in the Outlook section above. Multiconsult has not identified significant additional risk factors related to Covid-19 beyond those described therein.
The risk of disagreements and legal disputes related to the possible cost of delays and project errors is always present in the consultancy business. Multiconsult has developed internal procedures and competences to reduce risk exposure for legal disputes. Multiconsult has also normal and relevant insurance policies and routines for protection of normal and most potential consequences of such matters. Further details
regarding the insurance coverage are provided in note 20 to the consolidated financial statements for 2019.
Multiconsult has not identified significant additional risk exposures beyond the ones described in the 2019 Annual Report. Multiconsult has identified an increase in the number of and size of potential legal disputes, which potentially may, in adverse circumstances, have negative financial impact. Multiconsult is exposed to a number of risk factors: legal liability, credit risk, currency risk, interest rate risk, liquidity risk, and accounting estimates risk. The Risk and Risk Management section in the 2019 Annual Report contains detailed description and mitigating actions.
Net operating revenues: Operating revenues less sub consultants and disbursements.
EBITDA: EBIT before depreciation, amortisation and impairment.
EBITDA margin (%): EBITDA as a percentage of net operating revenues.
EBIT: Earnings before net financial items, results from associates and joint ventures and income tax.
EBIT margin (%): EBIT as a percentage of net operating revenues.
Other operating expenses excluding IFRS 16 margin (APM): Other operating expenses adjusted for IFRS 16 effects as a percentage of net operating revenue.
Billing ratio (%): Hours recorded on chargeable projects as a percentage of total hours worked (including administrative staff) and employer-paid absence. Billing ratio per segment includes allocated administrative staff.
Employees: Number of employees comprise all staff on payroll including staff on temporarily leave (paid and unpaid), excluding temporary personnel.
Order intake: Expected operating revenues on new contracts and confirmed changes to existing contracts. Only group external contracts are included.
Order backlog: Expected remaining operating revenues on new and existing contracts. Only group external contracts are included. Call-offs on frame agreements are included in the order backlog when signed.
Net interest-bearing debt: Non-current and current interest-bearing liabilities deducted cash and cash equivalents.
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 forwardlooking 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.
Unaudited for the period ended 31 March 2020
| Amounts in TNOK, except EPS | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Operating revenues | 1 147 827 | 1 110 184 | 4 068 683 |
| Expenses for sub consultants and disbursements | 154 184 | 165 942 | 632 848 |
| Net operating revenues | 993 644 | 944 242 | 3 435 835 |
| Employee benefit expenses | 715 943 | 680 486 | 2 654 431 |
| Other operating expenses Operating expenses excluding depreciation and amortization |
109 952 825 895 |
125 422 805 908 |
482 271 3 136 702 |
| Operating profit before depreciation and amortisation (EBITDA) | 167 749 | 138 334 | 299 133 |
| Depreciation and amortisation | 50 285 | 45 865 | 192 804 |
| Operating profit (EBIT) | 117 464 | 92 469 | 106 329 |
| Share of profit from associated companies and joint ventures | (983) | (675) | (169) |
| Financial income | 11 068 | 467 | 3 954 |
| Financial expenses | 17 822 | 15 344 | 56 683 |
| Net financial items | (6 755) | (14 877) | (52 729) |
| Profit before income tax | 109 727 | 76 917 | 53 431 |
| Income tax expense | 25 607 | 17 959 | 18 320 |
| Profit for the period | 84 120 | 58 957 | 35 110 |
| Attributable to: | |||
| Owners of Multiconsult ASA | 84 120 | 58 957 | 35 110 |
| Earnings per share | |||
| Basic and diluted (NOK) | 3.12 | 2.19 | 1.30 |
| Amounts in TNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Profit for the period | 84 120 | 58 957 | 35 110 |
| Other comprehensive income | |||
| Remeasurment of defined benefit obligations | - | - | (1 884) |
| Income taxes | - | - | 414 |
| Total items that will not be reclassified subsequently to profit or loss | - | - | (1 470) |
| Currency translation differences | 21 357 | (6 606) | (2 450) |
| Total items that may be reclassified subsequently to profit or loss | 21 357 | (6 606) | (2 450) |
| Total other comprehensive income for the period | 21 357 | (6 606) | (3 920) |
| Total comprehensive income for the period | 105 477 | 52 351 | 31 190 |
| Attributable to: | |||
| Owners of Multiconsult ASA | 105 477 | 52 351 | 31 190 |
| Amounts in TNOK | At 31 March 2020 | At 31 March 2019 | At 31 December 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Deferred tax assets | 38 806 | 39 794 | 40 322 |
| Intangible assets | 24 355 | 27 359 | 24 919 |
| Goodwill | 459 033 | 446 010 | 447 554 |
| Property, plant and equipment | 109 581 | 111 558 | 112 494 |
| Right-of-use assets | 915 436 | 996 495 | 898 208 |
| Investments in associated companies and joint ventures | 12 060 | 11 725 | 12 509 |
| Assets for reimbursement of provisions | 21 150 | 20 600 | 28 850 |
| Other non-current financial assets and shares | 18 556 | 19 191 | 17 785 |
| Total non-current assets | 1 598 976 | 1 672 732 | 1 582 643 |
| Current assets | |||
| Trade receivables | 673 144 | 534 477 | 638 476 |
| Work in progress | 379 279 | 573 100 | 309 034 |
| Other current receivables and prepaid expenses | 113 568 | 97 109 | 70 573 |
| Cash and cash equivalents | 62 910 | 33 645 | 73 558 |
| Total current assets | 1 228 901 | 1 238 331 | 1 091 642 |
| Total assets | 2 827 878 | 2 911 062 | 2 674 284 |
| EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Total paid in equity | 91 241 | 91 242 | 91 241 |
| Other equity | 595 678 | 554 318 | 490 171 |
| Total shareholders' equity | 686 922 | 645 560 | 581 413 |
| Non-current liabilities | |||
| Pension obligations | 6 546 | 6 172 | 6 542 |
| Deferred tax Provisions |
16 116 27 550 |
7 041 39 350 |
13 074 36 000 |
| Non-current interest-bearing liabilities | 172 000 | 173 307 | - |
| Non-current lease liabilities | 802 437 | 882 667 | 789 618 |
| Total non-current liabilities | 1 024 649 | 1 108 537 | 845 234 |
| Current liabilities | |||
| Trade payables | 158 606 | 214 653 | 160 663 |
| Prepaid revenues | 129 182 | 108 579 | 133 368 |
| Current tax liabilities | 38 131 | 33 411 | 17 979 |
| Public duties payable | 312 837 | 267 234 | 333 626 |
| Current interest-bearing liabilities | - | 62 033 | 178 400 |
| Current lease liabilities | 133 038 | 118 060 | 124 940 |
| Other current liabilities | 344 512 | 353 004 | 298 660 |
| Total current liabilities | 1 116 306 | 1 156 962 | 1 247 637 |
| Total liabilities | 2 140 956 | 2 265 499 | 2 092 871 |
| Total equity and liabilities | 2 827 878 | 2 911 062 | 2 674 284 |
| Share | Own | Share | Total paid-in |
Retained | Employee share purchase |
Total | |||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in TNOK | capital | shares | premium | capital | earnings | programme | Pension Currency | equity | |
| 31 December 2018 | 13 486 | - | 77 758 | 91 242 | 715 381 | (22 033) | (201 713) | 10 332 | 593 211 |
| Dividend | - | - | - | - | - | - | - | - | - |
| Share Issue | - | - | - | - | - | - | - | - | - |
| Treasury shares | - | - | - | - | - | - | - | - | - |
| Employee share purchase | |||||||||
| programme | - | - | - | - | - | - | - | - | - |
| Comprehensive income | - | - | - | - | 58 957 | - | - | (6 606) | 52 351 |
| 31 March 2019 | 13 486 | - | 77 758 | 91 242 | 774 338 | (22 033) | (201 713) | 3 726 | 645 560 |
| 31 December 2018 | 13 486 | - | 77 758 | 91 242 | 715 381 | (22 033) | (201 713) | 10 332 | 593 211 |
| Dividend | - | - | - | - | (40 456) | - | - | - | (40 456) |
| Treasury shares | - | (1) | - | (1) | - | - | - | - | (1) |
| Employee share purchase programme |
- | - | - | - | - | (2 532) | - | - | (2 532) |
| Comprehensive income | - | - | - | - | 35 110 | - | (1 470) | (2 450) | 31 190 |
| 31 December 2019 | 13 486 | (1) | 77 758 | 91 241 | 710 035 | (24 565) | (203 183) | 7 882 | 581 413 |
| 31 December 2019 | 13 486 | (1) | 77 758 | 91 241 | 710 035 | (24 565) | (203 183) | 7 882 | 581 413 |
| Dividend | - | - | - | - | - | - | - | - | - |
| Treasury shares | - | - | - | - | - | 34 | - | - | 34 |
| Employee share purchase | |||||||||
| programme | - | - | - | - | - | - | - | - | - |
| Comprehensive income | - | - | - | - | 84 120 | - | - | 21 357 | 105 477 |
| 31 March 2020 | 13 486 | (1) | 77 758 | 91 241 794 155 | (24 531) | (203 183) | 29 239 | 686 922 |
| Amounts in TNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before tax | 109 727 | 76 917 | 53 431 |
| Interest lease liability | 9 022 | 9 529 | 37 134 |
| Interest expense interest-bearing liability | 2 515 | 2 240 | 11 472 |
| Income taxes paid | (2 656) | (13 512) | (27 952) |
| Depreciation, amortisation and impairment | 13 354 | 12 055 | 54 802 |
| Depreciation right-of-use asset | 36 931 | 33 771 | 138 003 |
| Results from associated companies and joint ventures | 983 | (675) | 169 |
| Other non-cash profit and loss items | - | - | 860 |
| Sub total operating activities | 169 875 | 120 325 | 267 918 |
| Trade Payables | (2 057) | (21 840) | (75 829) |
| Trade receivables | (34 668) | 132 279 | 28 280 |
| Work in progress | (70 245) | (229 237) | 34 828 |
| Other | (14 905) | (63 571) | (6 951) |
| Total changes in working capital | (121 875) | (182 369) | (19 671) |
| Net cash flow from operating activities | 48 000 | (62 044) | 248 246 |
| Cash flows used in investment activities | |||
| Net purchase and sale of fixed assets and financial non-current assets | (9 876) | (28 231) | (62 837) |
| Change in non-current financial assets, restricted funds | (673) | 3 696 | 5 634 |
| Net cash flow used in investment activities | (10 549) | (24 535) | (57 203) |
| Cash flows from financing activities | |||
| Proceedes on interest bearing liabilities | 172 000 | 36 923 | - |
| Instalments on interest-bearing liabilities | (178 400) | - | (16 473) |
| Paid interest on interest-bearing liability | (2 515) | (2 240) | (11 472) |
| Instalments on lease liabilities | (33 453) | (26 936) | (122 693) |
| Paid interest on lease liability | (9 022) | (9 529) | (37 134) |
| Paid dividends | - | - | (40 456) |
| Sale treasury shares | 6 400 | - | 3 607 |
| Purchase treasury shares | (6 366) | - | (12 192) |
| Net cash flow from financing activities | (51 357) | (1 782) | (236 813) |
| Foreign currency effects on cash and cash equivalents | 3 257 | 1 966 | (714) |
| Net increase/decrease in cash and cash equivalents | (10 649) | (86 395) | (46 484) |
| Cash and cash equivalents at the beginning of the period | 73 558 | 120 040 | 120 040 |
| Cash and cash equivalents at the end of the period | 62 910 | 33 645 | 73 558 |
Multiconsult ASA (the company) is a Norwegian public limited liability company listed on Oslo Børs. The company and its subsidiaries (together the Multiconsult group/the group) are
The financial statements are presented in NOK, rounded to the nearest thousand, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements and notes may not add up to the total of that row or column.
These interim condensed consolidated financial statements for the first quarter of 2020 have been prepared in accordance with IAS 34 as approved by the EU. They have not been audited. They do not include all of the information required for full
annual financial statements of the group and should be read in conjunction with the consolidated financial statements for 2019. The accounting policies applied are consistent with those applied and described in the consolidated annual financial statements for 2019, which are available upon request from the company's registered office at Nedre Skøyen vei 2, 0276 Oslo and at www. multiconsult.no.
These interim condensed consolidated financial statements for the first quarter of 2020 were approved by the Board of Directors and the CEO on 19 May 2020.
The group prepares its consolidated annual financial statements in accordance with IFRS as adopted by the EU (International Financial Reporting Standards - IFRS). References to IFRS in these financial statements refer to IFRS as approved by the EU. The accounting policies adopted are consistent with those of the previous financial year, with the exemptions presented below.
In previous quarterly reporting, net write-downs have been presented as a separate key figure. These adjustments are a consequence of a large volume of projects and is part of normal operations in the group. Starting from 2020, net write-downs will not be presented as a key figure. Any material adjustments outside normal operations will be disclosed separately. This is in line with group annual reporting of financial statements. There have been no material adjustments that require disclosure in Q1 2020.
Starting from 2020 Multiconsult has changed its reporting segments. Note 5 is presented according to the new segments, and figures for 2019 are restated. To ensure comparability between periods, a given percentage of revenue and cost reported in 2019 as "not allocated" is distributed to the new segments according to the same principles applied to allocation in 2020. See section Segments for a description of the new segments.
In Q4 2019 Multiconsult changed the presentation of restricted cash, interest on interest-bearing liabilities and instalments and paid interest on lease liability. The cash flow for Q1 2019 is restated to be comparable to cash flow in Q1 2020.
In Q2 2019 it was discovered that approximately NOK 10 million in employee benefit expenses should be classified as other operating expenses, Q1 2019 is restated to be comparable.
The preparation of interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim condensed consolidated financial statements, significant judgements made by management in
applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements for 2019 note 2.
Cash-generating units are reviewed for impairment when indicators exist. The estimated recoverable amounts are affected
by assumptions in connection with the estimation of future cash flows, as well as the discount rate for the estimation of the present value of the cash flows. Due to the increased uncertainties following the Covid-19 pandemic, the group has performed impairment tests at Q1. The tests are based on the same assumptions as for the tests at year end, except for a new WACC that has been updated and simulations of scenarios of decrease
in revenues. The result of the tests confirms that the value in use is higher than the carrying value at Q1 and no impairment of goodwill, property, plant and equipment or tangible assets to the related CGU's are required. The group will follow the situation closely in the upcoming quarters.
Refer to section Segments for more information on the segments. The group has three geographical reporting segments as well as a segment for Energy and LINK arkitektur.
| Q1 2020 Amounts in TNOK |
Region Oslo |
Region Norway |
Energy | LINK arkitektur |
Inter national |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|---|
| External revenues | 374 303 | 401 271 | 84 270 | 187 958 | 94 533 | 5 709 | (217) | 1 147 827 |
| Internal revenues | 4 569 | 8 234 | 3 343 | 8 839 | 646 | 739 | (26 370) | - |
| Total operating revenues | 378 871 | 409 505 | 87 613 | 196 797 | 95 179 | 6 448 | (26 587) | 1 147 827 |
| Net operating revenues | 329 576 | 391 045 | 69 531 | 150 958 | 61 212 | (5 774) | (2 905) | 993 644 |
| Operating expenses | 267 403 | 326 534 | 65 621 | 137 774 | 51 103 | (19 126) | (3 413) | 825 895 |
| EBITDA | 62 174 | 64 510 | 3 910 | 13 184 | 10 110 | 13 352 | 508 | 167 749 |
| Depreciation, amortisation, impairment |
4 477 | 21 620 | 445 | 6 435 | 3 645 | 13 173 | 489 | 50 285 |
| EBIT | 57 697 | 42 890 | 3 465 | 6 749 | 6 465 | 179 | 19 | 117 464 |
| Associates and joint ventures |
- | - | (983) | - | - | - | - | (983) |
| Number of employees | 796 | 1 065 | 199 | 497 | 308 | 119 | - | 2 984 |
| Q1 2019 | Region | Region | LINK | Inter | Not | Elimi | ||
|---|---|---|---|---|---|---|---|---|
| Amounts in TNOK | Oslo | Norway | Energy | arkitektur | national | allocated | nations | Total |
| External revenues | 371 097 | 398 220 | 88 224 | 180 468 | 68 839 | 270 | 3 066 | 1 110 184 |
| Internal revenues | - | 114 | 103 | 14 973 | 1 319 | 1 630 | (18 139) | - |
| Total operating revenues | 371 097 | 398 334 | 88 327 | 195 441 | 70 159 | 1 900 | (15 073) | 1 110 184 |
| Net operating revenues | 309 412 | 376 596 | 64 688 | 152 267 | 51 767 | (8 295) | (2 193) | 944 242 |
| Operating expenses | 265 385 | 317 414 | 65 443 | 129 171 | 42 838 | (12 011) | (2 332) | 805 908 |
| EBITDA | 44 027 | 59 182 | (755) | 23 096 | 8 929 | 3 716 | 139 | 138 334 |
| Depreciation, amortisation, impairment |
3 578 | 19 582 | 480 | 6 289 | 3 063 | 13 007 | (134) | 45 865 |
| EBIT | 40 449 | 39 601 | (1 235) | 16 807 | 5 866 | (9 292) | 273 | 92 469 |
| Associates and joint ventures |
- | - | (675) | - | - | - | - | (675) |
| Number of employees | 818 | 1 045 | 204 | 500 | 278 | 127 | - | 2 972 |
| FY 2019 Amounts in TNOK |
Region Oslo |
Region Norway |
Energy | LINK arkitektur |
Inter national |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|---|
| External revenues Internal revenues |
1 310 703 5 763 |
1 482 754 376 |
330 123 12 249 |
651 187 12 042 |
302 521 7 608 |
(15 855) 36 917 |
7 250 (74 955) |
4 068 683 - |
| Total operating revenues | 1 316 466 | 1 483 130 | 342 372 | 663 229 | 310 129 | 21 061 | (67 705) 4 068 683 | |
| Net operating revenues | 1 090 928 | 1 381 857 | 250 607 | 535 798 | 206 926 | (25 230) | (5 051) | 3 435 835 |
| Operating expenses | 1 020 337 | 1 241 204 | 259 273 | 499 782 | 176 979 | (56 378) | (4 495) | 3 136 702 |
| EBITDA | 70 592 | 140 653 | (8 666) | 36 015 | 29 947 | 31 148 | (556) | 299 133 |
| Depreciation, amortisation, impairment |
17 586 | 84 153 | 1 912 | 25 008 | 12 625 | 52 056 | (535) | 192 804 |
| EBIT | 53 006 | 56 500 | (10 578) | 11 008 | 17 322 | (20 908) | (21) | 106 329 |
| Associates and joint ventures |
- | - | (169) | - | - | - | - | (169) |
| Number of employees | 817 | 1 068 | 199 | 489 | 299 | 122 | - | 2 994 |
The group's net operating revenues are affected by the number of working days within each reporting period while employee expenses are recognised for full calendar days. The number of working days in a month is affected by public holidays and vacations. The timing of public holidays (e.g. Easter) during
quarters and whether they fall on weekends or weekdays impacts revenues, earnings, cashflows and working capital balances. Generally, the company's employees are granted leave during Easter and Christmas. The summer holidays primarily impact the month of July and the third quarter.
There were no significant events and transactions in the period.
In the fourth quarter of 2019 Multiconsult ASA entered into a share loan agreement with its largest shareholder, Stiftelsen Multiconsult, for a loan of 100 000 Multiconsult shares in connection with the implementation of the 2019 employee share purchase programme. The loan was setteled as Multiconsult ASA delivered the full amount of shares back to Stiftelsen Multiconsult
in the first quarter of 2020.
See note 23 to the consolidated financial statements for 2019 for a description of related parties and related parties transactions in 2019.
The company has 16 treasury shares as of 31 March 2020. For a description of the share purchase programme for all the employees and the performance bonus based bonus scheme for the group management see note 9 in the consolidated financial statements for 2019.
For the periods presented there are no dilutive effects on profits or number of shares. Basic and diluted earnings per share are therefore the same.
| Q1 2020 | Q1 2019 | FY 2019 | |
|---|---|---|---|
| Profit for the period (in TNOK) | 84 120 | 58 957 | 35 110 |
| Average no shares | 26 931 354 | 26 970 387 | 26 957 519 |
| Earnings per share (NOK) | 3.12 | 2.19 | 1.30 |
The group's financial instruments are interest-bearing debt, accounts receivables and other receivables, cash and cash equivalents and accounts payables. It is assumed that the
book value is a good approximation of fair value for the group's financial instruments.
| Amounts in TNOK | 31 Mar 2020 | 31 Mar 2019 | 31 Dec 2019 |
|---|---|---|---|
| Multiconsult ASA | 172 000 | 193 500 | 178 400 |
| Other | - | 41 840 | - |
| Total | 172 000 | 235 340 | 178 400 |
The group owns a limited amount of shares and participations available for sale (NOK 0.5 million), and it is assumed that the book value is a good estimate of fair value. Fair value of derivatives (interest rate swap) were recorded with an unrealised loss of NOK 2.3 million at 31 March 2020 (gain of NOK 0.7 million at 31 December 2019).
Multiconsult ASA has an overdraft loan facility of NOK 320.0 million, which is part of a cash pool. The cash pool is a multicurrency and multi-account system including the legal enteties Multiconsult Norge AS, LINK arkitektur AS, Iterio AB, Multiconsult UK Limited and Johs Holt AS, where Multiconsult ASA is the owner of the cash pool's top account and the debtor of the facility. In addition, Multiconsult ASA holds a 3-year revolving credit facility of NOK 200 million, plus accordion until March 2023. The loan agreements include a covenant requiring that net interest bearing liabilities (excluding restricted cash) of the group shall not exceed 3.0 times last twelve months EBITDA , and a covenant requiring an equity ratio of at least 25%, reported quarterly. Covenant ratios are calculated excluding IFRS 16 effects, and the EBITDA includes "carve-out" for certain limited one-off costs. Multiconsult ASA is in compliance with its financial covenants at 31 March 2020.
Multiconsult uses alternative performance measures for periodic and annual financial reporting in order to provide a better understanding of the group's underlying financial performance.
| Amounts in MNOK (except percentage) | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Net operating revenues | 993.6 | 944.2 | 3 435.8 |
| Estimated calendar effect | (13.4) | - | - |
| Adjusted net operating revenues | 980.2 | 944.2 | 3 435.8 |
| Reported employee benefit expenses | 715.9 | 680.5 | 2 654.4 |
| Reported other operating expenses | 110.0 | 125.4 | 482.3 |
| Operating expenses | 825.9 | 805.9 | 3 136.7 |
| Adjusted EBITDA | 154.3 | 138.3 | 299.1 |
| Depreciation, amortisation and impairments | 50.3 | 45.9 | 192.8 |
| Adjusted EBIT | 104.1 | 92.5 | 106.3 |
| Adjusted EBITDA margin (%) | 15.7% | 14.7% | 8.7% |
| Adjusted EBIT margin (%) | 10.6% | 9.8% | 3.1% |
APM does not state underlaying net operating revenues.
Estimated calendar effect equals number of workingdays in comparing periods.
| Amounts in MNOK | 31 Mar 2020 | 31 Mar 2019 | 31 Dec 2019 |
|---|---|---|---|
| Non-current interest-bearing liabilities (including IFRS 16 leases) | 974.4 | 1 056.0 | 789.6 |
| Current interest-bearing liabilities (including IFRS 16 leases) | 133.0 | 180.1 | 303.3 |
| Restricted cash non-current and current | 14.6 | 18.3 | 17.0 |
| Cash and cash equivalents | 62.2 | 30.5 | 69.7 |
| Interest-bearing debt including IFRS 16 lease liabilities | 1 030.7 | 1 187.3 | 1 006.2 |
| Less non-current and current IFRS 16 lease liabilities | 935.5 | 1 000.7 | 914.6 |
| Net interest-bearing liabilities | 95.2 | 186.5 | 91.6 |
| Amounts in MNOK (except percentage) | 31 Mar 2020 | 31 Mar 2019 | 31 Dec 2019 |
|---|---|---|---|
| Equity | 686.9 | 645.6 | 581.4 |
| Total assets | 2 827.9 | 2 911.1 | 2 674.3 |
| Equity ratio | 24.3% | 22.2% | 21.7% |
| Equity excluding IFRS 16 | 707.0 | 649.8 | 597.9 |
| Total assets excluding IFRS 16 | 1 912.4 | 1 914.6 | 1 779.8 |
| Equity ratio excluding IFRS 16 | 37.0% | 33.9% | 33.6% |
Loan covenants related to equity is calculated excluding IFRS 16.
| Amounts in MNOK | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Increase in EBITDA | 42.5 | 39.0 | 158.5 |
| Increase depreciation | (36.9) | (33.8) | (138.0) |
| Effect EBIT | 5.5 | 5.3 | 20.5 |
| Interest expense | (9.0) | (9.5) | (37.1) |
| Profit before tax | (3.5) | (4.3) | (16.6) |
| Amounts in MNOK (except percentage) | Q1 2020 | Q1 2019 | FY 2019 |
|---|---|---|---|
| Other operating expenses | 110.0 | 125.4 | 482.3 |
| Other operating expenses IFRS 16 effect | 42.5 | 39.0 | 158.5 |
| Other operating expenses excluding IFRS 16 | 152.4 | 164.5 | 640.8 |
| Net operating revenue | 993.6 | 944.2 | 3 435.8 |
| Other operating expenses exluding IFRS 16 margin | 15.3% | 17.4% | 18.7% |
Visiting address: Nedre Skøyen vei 2 0276 Oslo
Postal address: P O Box 265 Skøyen NO-0213 Oslo
T: (+47) 21 58 50 00 E: [email protected]
Investor relations: E: [email protected]
www.multiconsult.no
Org no 910 253 158
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