Annual Report • Feb 26, 2019
Annual Report
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| OCT-DEC 2018 | OCT-DEC 2017 | CHANGE % | JAN-DEC 2018 | JAN-DEC 2017 | CHANGE % |
|---|---|---|---|---|---|
| 535.4 | 458.4 | 16.8 % | 1 846.7 | 1 607.4 | 14.9 % |
| 65.2 | 49.1 | 32.7 % | 191.6 | 144.1 | 32.9 % |
| 66.3 | 49.8 | 33.0 % | 191.6 | 145.9 | 31.3 % |
| 53.5 | 39.7 | 35.0 % | 150.5 | 112.0 | 34.3 % |
| 215.9 | 158.6 | 36.2 % | 219.0 | 149.0 | 46.9 % |
| 278.4 | 205.4 | 35.6 % | 278.4 | 205.4 | 35.6 % |
| 1 369 | 1 215 | 12.7 % | 1 369 | 1 215 | 12.7 % |
| 1 362 | 1 221 | 11.5 % | 1 305 | 1 171 | 11.4 % |
| 5.25 | 3.86 | 36.0 % | 14.80 | 10.92 | 35.6 % |
| 5.21 | 3.82 | 36.3 % | 14.66 | 10.79 | 35.8 % |
| 12.2 % | 10.7 % | 10.4 % | 9.0 % | ||
| 36.7 % | 34.2 % | 36.7 % | 34.2 % | ||
Bouvet is a consultancy delivering digital services. At 31 December, it had 1 369 employees at 13 offices in Norway and Sweden.
The group is a strategic partner for a number of enterprises, and helps them to design digital solutions which create new business opportunities and provide the desired effects. Clients value Bouvet's good understanding of their business and the fact that its broad range of services allows it to act as a turnkey provider. The group is concerned to maintain long-term client relationships.
Bouvet's regional model with local offices provides clear benefits for marketing and competitiveness. Many enterprises regard it as important that their provider of business-critical systems has local entrenchment and expertise. In addition, this model makes it easier to establish long-term relationships and thereby become acquainted with the client's business and systems.
As a result of the clear attention it pays to principles for managing the business, Bouvet comes across as a solid, well-run and well-regarded group. Its standards for delivering good solutions are supplemented by strict requirements on ethics, conflicts of interest, security, openness and accountability. Close relations with clients are achieved because the group and its employees implement their assignments with a high degree of integrity.
| Important agreement entered into with Aker Solutions where Sesam, Bouvet's digitalisation platform, plays a significant role in making data accessible for the work of building digital twins |
|---|
| New frame agreements secured with the Norwegian Environment Agency, the City of Stockholm and Norske Skog |
| Prizes won for Bouvet.no and Bouvet's movie "Øya forklart" |
| Operating revenues up by NOK 77 million or 16.8 per cent from the fourth quarter of 2017 to NOK 535.4 million |
| Operating profit (EBIT) up by 32.7 per cent from the fourth quarter of 2017 to NOK 65.2 million |
| Cash flow from operations of NOK 215.9 million, compared with NOK 158.6 million for the fourth quarter of 2017 |
| The board proposes a dividend of NOK 13 per share for 2018 |
| Employees up by 27 from 30 September and 154 over the past 12 months. |
During the final quarter of the year, we continued to help our clients understand the challenges and opportunities created by digital technology, and to lay a strategy which reflects these. We have helped some to tailor their business model to the new age, while in other cases we utilise digital technology, mindsets or approaches to improve day-to-day operations and the lives of employees. With yet others, we have participated in creating new products and services and improving customer experiences. And for some we provided this entire spectrum.
The growing need for our expertise at our clients contributed to continued progress. We recruited a number of able people, and we delivered good results yet again in this quarter.
We regard digitalisation as an important social task, and as something significant for people. Many of our clients are important players for society, in both private and public sectors, with a need and a desire to improve people's everyday lives. Through our collaboration with them during the quarter, we contributed to the common good.
The assignments we tackled and resolved were many and varied. They ranged from simplifying duty-free shopping at Norwegian regional airports to developing systems for reducing electricity consumption in the European rail network, and from automating aluminium production to creating new websites for everyone from housing developers to historical museums.
We worked on the major systems which get socially critical functions to perform, we worked with the systems which put enterprises in control of their own business, we created practical apps and we produced informative websites.
During the quarter, our clients appreciated our cross-disciplinary approach and our ability to create good and effective combinations of expertise. This generated a growing need for teams which can realise integrated solutions and make our clients better equipped to meet the digital reality.
At the same time, this reality is always changing. To handle this and seize the opportunities which arise, we continued to devote attention to the wellbeing and expertise of our employees and the work of developing new service areas. These efforts aim to strengthen our credibility as a long-term partner.
Our regional model confers great freedom on each office and organisational unit, cut bureaucracy and reduces decisionmaking layers. That gives us an adaptability which is crucial for our ability to create good, flexible and durable solutions. The model is also a success factor which will ensure our continued progress.
Sverre Hurum President and CEO
"The growing need for our expertise at clients contributed to continued progress. We recruited a number of able people, and we delivered good results yet again in this quarter."
Bouvet had operating revenues of NOK 535.4 million for the fourth quarter, compared with NOK 458.4 million in the same period of 2017. That represented a rise of 16.8 per cent. Fee income generated by the group's own consultants increased by 19.2 per cent from the fourth quarter of 2017 to NOK 440.2 million. Income generated by sub-contractors grew by 4.7 per cent from the same period of the year before to NOK 70.6 million. Other revenues rose by 13.4 per cent from the fourth quarter of 2017 to NOK 24.5 million.
The fourth quarter had one fewer working days than the same period of 2017. That had a negative effect of NOK 5.6 million on operating revenues generated by the group's own employees.
An increase of 11.5 per cent in the average number of employees had a positive effect of NOK 44.4 million on operating revenues generated by the group's own workforce. At the same time, improved progress with fixed and target-price contracts compared with the fourth quarter of 2017 had a positive effect of NOK 2.2 million on operating revenues. A 3.1 per cent growth in rates for the group's hourly based services compared with the fourth quarter of 2017 increased operating revenues by NOK 14.1 million. Furthermore, a 0.9 percentage point increase in the billing ratio for the group's consultants from the fourth quarter of 2017 had a positive effect of NOK 4.9 million on operating revenues. In addition comes an overall positive impact of NOK 11 million from reduced sickness absence, fewer days of holiday and more overtime working. The total
positive effect on operating revenues generated by the group's own employees was NOK 76.6 million.
Sales to existing clients made good progress during the quarter. Clients who also used the group in the fourth quarter of 2017 accounted for 94.3 per cent of operating revenues. In addition, clients acquired since 31 December 2017 contributed a total of NOK 30.6 million to fourth-quarter operating revenues.
Bouvet's strategy is to use services from sub-contractors when it lacks the capacity to meet demand with its own personnel or when clients require leading-edge expertise outside the group's priority areas. The sub-contractor share of total revenues was 13.2 per cent in the fourth quarter, compared with 14.7 per cent in the same period of 2017.
Operating revenues for the full year came to NOK 1 846.7 million, compared with NOK 1 607.4 million in 2017. That represented a rise of 14.9 per cent. Fee income generated by the group's own employees for 2018 increased by NOK 220.9 million or 16.8 per cent from the year before. This growth is primarily attributable to an 11.4 per cent rise in the number of employees, a 1.4 percentage point increase in the billing ratio for the group's consultants and a 3.4 per cent growth in rates for the group's hourly based services. In addition, income generated by sub-contractors increased by NOK 12.4 million or 5.5 per cent compared with 2017. Other operating revenues were up by NOK 6 million or 9.5 per cent from 2017.
Number of employees (end of quarter)
Bouvet's operating costs, including depreciation and amortisation, totalled NOK 470.2 million for the fourth quarter, up from NOK 409.3 million in the same period of 2017. That represented an increase of 14.9 per cent. Payroll costs rose by 16.6 per cent from the fourth quarter of 2017 to NOK 336.8 million. This increase reflected a higher average number of employees in addition to the general growth in pay rates. The group experienced a general rise in pay of 1.6 per cent over the past 12 months. The cost of sales rose to NOK 75.3 million, compared with NOK 72.7 million for the fourth quarter of 2017, and primarily comprised procurement of sub-contractor services and software as well as the hire of course instructors. Other operating expenses grew by 23.7 per cent from the fourth quarter of 2017 to NOK 52.3 million. This rise primarily reflected higher costs for leasing and operating office premises, recruitment, social events and ICT.
Operating costs for the full year grew by 13.1 per cent from 2917 to NOK 1 655.1 million. The cost of sales rose by 4.5 per cent to NOK 258.5 million, primarily because greater use was made of sub-contractors. Payroll costs increased by 13.9 per cent from the year before to NOK 1 179 million. Other operating expenses came to NOK 192.9 million. The NOK 33.2 million increase from 2017 was primarily attributable to higher costs for leasing and operating office premises, recruitment, social events and ICT.
Operating profit (EBIT) for the fourth quarter came to NOK 65.2 million, compared with NOK 49.1 million in the same period of 2017.
The EBIT margin thereby rose from 10.7 per cent in the fourth quarter of the year before to 12.2 per cent. Net profit came to NOK 53.5 million, compared with NOK 39.7 million in the same period of 2017. Diluted earnings per share were NOK 5.21, compared with NOK 3.82 in the fourth quarter of the year before.
Operating profit for the full year amounted to NOK 191.6 million, compared with NOK 144.1 million in 2017. That represented an increase of 32.9 per cent. The EBIT margin thereby rose from nine per cent in the year before to 10.4 per cent. Net profit came to NOK 150.5 million, compared with NOK 112 million in 2017. Diluted earnings per share were NOK 14.66, compared with NOK 10.79 for the year before.
CConsolidated cash flow from operations was NOK 215.9 million for the fourth quarter, compared with NOK 158.6 million in the same period of 2017. Cash flow for the quarter was affected positively by a reduction of NOK 73.6 million from the third quarter of 2018 in working capital related to accounts receivable from clients, work in progress and other current receivables. Furthermore, an increase of NOK 80 million in
Revenue from customer 100 % public owned: 51.0 %
Revenue from customer wholly or partially private owned: 49.0 %
| Public admin | 28.3 % |
|---|---|
| Oil & gas | 25.1 % |
| Power supply | 9.9 % |
| Transportation | 8.8 % |
| Retail | 5.6 % |
| Service industry | 5.3 % |
| Bank & finance | 4.8 % |
| Industry | 3.9 % |
| Info and communication | 3.8 % |
| Other | 2.4 % |
| Health | 2.2 % |
current liabilities from the third quarter of 2018 had a positive effect on cash flow. Consolidated cash flow from operations for the full year was NOK 219 million, compared with NOK 149 million in the same period of 2017.
Capital spending in the quarter totalled NOK 10 million, including NOK 5.4 million for the acquisition of new operating assets and NOK 4.6 million for investment in intangible assets. Net investment for the quarter was thereby NOK 10 million, compared with NOK 4.3 million in the same quarter of 2017. Investment for the full year totalled NOK 57.7 million, broken down by NOK 30.6 million on operating assets, NOK 13.7 million on intangibles and NOK 13.4 million on the Olavstoppen subsidiary in connection with buying out minority shareholders. The group sold operating assets for NOK 0.6 million during the full year, so that net investment came to NOK 57.1 million compared with NOK 29.9 million in the same period of 2017.
The group's client portfolio consists mainly of large, solid listed companies and public enterprises. No significant bad debts were suffered in either the fourth quarter or the full year, and the group has good oversight and control of its receivables.
The group has no interest-bearing debt. Bank deposits at 31 December totalled NOK 278.4 million, compared with NOK 205.4 million a year earlier. Of bank deposits at 31 December, the account for employee tax deductions totalled NOK 43.7 million. The group had an undrawn overdraft facility of NOK 100 million at 31 December. Bouvet held 1 264 of its own shares at 31 December. Equity at 31 December totalled NOK 277 million, representing an equity ratio of 36.7 per cent. The corresponding figures for 31 December 2017 were an equity of NOK 220.4 million and an equity ratio of 34.2 per cent.
The group does not report internally by separate business areas. Its business is homogenous and pursued within the Scandinavian market for IT consultancy services. Risk and return are followed up for the business as a whole, with shared markets, on a project basis and per consultant. On that basis, the group has one reportable segment.
The market was positive for Bouvet during the quarter. A high and stable pace of digitalisation and innovation in the market led to very good progress. The group's concentration on long-term client relationships creates stability and trust. Existing clients see new business opportunities as well as areas for enhancing efficiency with the aid of technology. That has led to new forms of collaboration and growing demand for teams and advisory services. Agder Energi Nett extended its contract for enterprise architecture, data analysis and project management. The Norwegian Environment Agency awarded a new frame agreement. This represented an extension of the existing project portfolio as well as new assignments to lay the basis for sustainable management of such aspects as Norway's populations of predators and wild deer.
During the quarter, Bouvet continued its digitalisation activities in the public sector. The group was involved in the work of digital transformation, and helped to make provision for increased cross-sectoral cooperation. An example is the national collaboration project on the welfare technology hub, which identifies and establishes new ways of sharing and exchanging data in the health sector. Part of the national welfare technology programme, this is being pursued jointly by the Directorate for e-Health, the Norwegian Health Network, the Norwegian Association of Local and Regional Authorities (KS) and a number of local authorities. Among other deliveries, mention can be made of the "sustainability barometer" for the ocean industries, developed in cooperation with BarentsWatch.
The market is shifting towards more business-driven technology development and data-driven enterprises. That led during the quarter to a sharp increase in deliveries of and demand for platform concepts and services in data science and platforms, artificial intelligence, machine learning and the internet of things. Bouvet has contributed to establishing a data lake at the City of Bergen which includes information from 13 000 sensors at the water and sewerage agency. This helps to simplify the identification of possible leaks. Among other examples of clients are Avinor and Hafslund, who use the Sesam Integration Hub.
As Bouvet's digitalisation platform, Sesam has experienced growing demand because enterprises need faster access to data. Several new partner agreements were secured during the quarter. Aker Solutions, for example, entered into a long-term agreement to make data accessible and facilitate the development of digital twins.
Bouvet has also been involved in developing digital twins at Equinor, which is very advanced in terms of digitalisation. The group is a key contributor to the adoption of new technologies such as machine learning and pattern recognition at Equinor's integrated operations centre (IOC) in order to predict faults on offshore platforms before they occur. Bouvet has also been involved in assignments at Equinor which include augmented (AR) and virtual (VR) reality, as well as the use of block chain technology in trading solutions.
Demand for system development remains high. Attention in the market is concentrated on service development and innovation. During the quarter, Bouvet further developed services which include its whole range of services. One example is services for mixed reality (MR), where assignments were pursued during the quarter at Hevolus and the Manufacturing Technology Centre. In addition, increased demand is being seen for recognition technology and cyber security.
Attention at the group's clients is concentrated on tight integration of technology with their own service development, efficiency improvements and automation. During the quarter, Bouvet experienced a shift in the development process which led to increased demand for cross-disciplinary team deliveries. Vinmonopolet is an example of a client where Bouvet delivered during the quarter with the aid of flexible development processes at strategic, tactical and operational levels in order to achieve commercial goals for the e-commerce solution at vinmonopolet.no.
Expertise is needed in change, project and test management as well as security when developing and introducing core systems. Demand for such expertise was good during the quarter at the Norwegian Public Roads Administration, the Norwegian Directorate for Children, Youth and Family Affairs (Bufdir), Telia and Statnett. In addition, this type of business-critical solution calls for increased customer focus and the use of innovation processes for dealing with changed user behaviour and market changes. During the quarter, this led to a high level of demand for service design and design-related services. Clients such as Entur, the City of Oslo and Cappelen Damm provide examples where Bouvet has delivered this type of service. The group has been involved in a strategic omnichannel project at NAF . Olavstoppen, a wholly owned subsidiary with leading-edge expertise in the development of digital services, secured a number of high-profile assignments both nationally and internationally during the quarter.
The need for digital expertise related to technology, projects, innovation and management led during the quarter to increased demand for courses, both open and internally in companies. A number of breakfast meetings were also held at Bouvet's premises.
Bouvet's regional model and culture-driven organisation, with a high level of job satisfaction among employees, yielded good organic growth during the quarter. The workforce increased by 27 people from the previous three months, and the group had 1 369 employees at 31 December – up by 154 from the same date in 2017.
The attention being paid by clients to change, renewal and improvement has led to big demand for Bouvet's expertise in every service area. Recruitment and job satisfaction among employees had a high priority. That increased delivery capacity. The recruitment market is tough and challenging, but Bouvet succeeded in attracting relevant candidates in all age groups and disciplines.
Bouvet's ambition is to be the most credible consultancy with the most satisfied employees. In order to be an attractive and relevant employer at the interface with the workforce's desire for professional challenges and expertise development, continuous efforts are made to build a strong and open sharing culture. The choice of assignments must be viewed in
relation to the individual consultant's desire for personal and professional development.
In addition to relevant and specialist client projects, Bouvet has various arenas for expertise development such as in-house schools, courses and conferences. The group builds relations with various universities in regions where it has a local presence. These arenas are developed continuously on the basis of technology trends, market developments and the expertise requirements of consultants.
Bouvet's annual employee survey, conducted during the quarter by the Great Place to Work, yielded very good results. Ninety-four per cent of respondents stated that, all in all, Bouvet is a great place to work. That represents an increase from 2017. The survey shows that Bouvet has a unique people-oriented culture where fellowship, caring, inclusion and collaboration occupy a strong place. The management gives plenty of scope and facilitates initiatives which ensure the constant development of both Bouvet and the individual.
The group is exposed at any given time to various forms of operational, market and financial risk. The board and executive management work continuously on risk management and control. This is described in more detail under corporate
governance in the annual report for 2017 (section 10: risk management and internal control). In the board's view, no significant changes occurred over the past three months in the various risks to which the group is exposed.
Digitalisation is fundamental to increased prosperity and sustainable competitiveness in the meeting with demographic changes, globalisation and climate challenges. Technology is an enabler for change at enterprises and in working life generally. Commercial chains and business models are changing. A number of enterprises are experiencing productivity growth and a wider opportunity space for service development, but also stronger competition from global players.
Development of digital customer journeys and the transition to more data-driven enterprises demands heavy investment in technology and closer collaboration with digitalisation partners in order to see the overall perspective. A high pace of digitalisation and change creates a need for cross-disciplinary teams able to make speedy deliveries with commercial value.
Sverre Hurum President and CEO Tel: +47 23 40 60 00 | +47 913 50 047
Erik Stubø CFO Tel: +47 23 40 60 00 | +47 950 36 011 That changes procurement behaviour and creates market slippages in the consultancy sector.
Bouvet has the breadth of services, the structure for establishing cross-disciplinary teams, and the regional and adaptable model needed to meet this development. That has proved valuable for developing the group's services and for its clients.
Continuous recruitment is required to ensure the right delivery capacity in a market characterised by a high level of demand, and will continue to be pursued in the face of strong competition from other players.
Bouvet is well positioned to maintain its ability to deliver to its clients.
We hereby confirm to the best of our knowledge that the interim financial statements for the fourth quarter of 2018 and the preliminary financial statements for 1 January to 31 December 2018 have been prepared in accordance with IAS 34, and that the information in the financial statements provides a true and fair picture of the overall assets, liabilities, financial position and overall financial results of the Bouvet ASA group. We also confirm to the best of our knowledge that the interim report provides a true and fair view of important events in the accounting period and their influence on the interim financial statements, the most important risk and uncertainty factors facing the business in the next accounting period, and significant transactions with close associates.
Oslo, 26 February 2019 The board of directors of Bouvet ASA
Pål Egil Rønn Chair of the board
Ingebrigt Steen Jensen
Director
Tove Raanes Deputy chair
Egil Christen Dahl Director
Grethe Høiland Director
Sverre Hurum President and CEO
| NOK 1 000 | UNAUDITED OCT-DEC 2018 |
UNAUDITED OCT-DEC 2017 |
CHANGE | CHANGE % | UNAUDITED JAN-DEC 2018 |
JAN-DEC 2017 |
CHANGE | CHANGE % |
|---|---|---|---|---|---|---|---|---|
| Revenue | 535 397 | 458 399 | 76 998 | 16.8 % | 1 846 711 | 1 607 353 | 239 358 | 14.9 % |
| Operating expenses | ||||||||
| Cost of sales | 75 253 | 72 681 | 2 572 | 3.5 % | 258 514 | 247 346 | 11 168 | 4.5 % |
| Personell expenses | 336 783 | 288 824 | 47 959 | 16.6 % | 1 178 968 | 1 035 043 | 143 925 | 13.9 % |
| Depreciation fixed assets | 4 190 | 3 597 | 593 | 16.5 % | 17 388 | 12 994 | 4 394 | 33.8 % |
| Amortisation intangible assets | 1 652 | 1 881 | -229 | -12.2 % | 7 414 | 8 149 | -735 | -9.0 % |
| Other operating expenses | 52 337 | 42 303 | 10 034 | 23.7 % | 192 865 | 159 684 | 33 181 | 20.8 % |
| Total operating expenses | 470 215 | 409 286 | 60 929 | 14.9 % | 1 655 149 | 1 463 216 | 191 933 | 13.1 % |
| Operating profit | 65 182 | 49 113 | 16 069 | 32.7 % | 191 562 | 144 137 | 47 425 | 32.9 % |
| Financial items | ||||||||
| Interest income | 613 | 305 | 308 | 101.0 % | 1 815 | 1 291 | 524 | 40.6 % |
| Financial income | 640 | 503 | 137 | 27.2 % | 929 | 1 497 | -568 | -37.9 % |
| Interest expense | -39 | -24 | -15 | 62.5 % | -104 | -137 | 33 | -24.1 % |
| Finance expense | -80 | -52 | -28 | 53.8 % | -2 627 | -852 | -1 775 | 208.3 % |
| Net financial items | 1 134 | 732 | 402 | 54.9 % | 13 | 1 799 | -1 786 | -99.3 % |
| Ordinary profit before tax | 66 316 | 49 845 | 16 471 | 33.0 % | 191 575 | 145 936 | 45 639 | 31.3 % |
| Income tax expense | ||||||||
| Tax expense on ordinary profit | 12 780 | 10 175 | 2 605 | 25.6 % | 41 078 | 33 914 | 7 164 | 21.1 % |
| Total tax expense | 12 780 | 10 175 | 2 605 | 25.6 % | 41 078 | 33 914 | 7 164 | 21.1 % |
| Profit for the period | 53 536 | 39 670 | 13 866 | 35.0 % | 150 497 | 112 022 | 38 475 | 34.3 % |
| Assigned to: | ||||||||
| Shareholders in parent company | 53 536 | 39 193 | 150 497 | 110 632 | ||||
| Non-controlling interests | 0 | 477 | 0 | 1 390 | ||||
| Diluted earnings per share | 5.21 | 3.82 | 1.38 | 36.2 % | 14.66 | 10.79 | 3.86 | 35.8 % |
| Earnings per share | 5.26 | 3.87 | 1.39 | 36.0 % | 14.80 | 10.92 | 3.88 | 35.6 % |
| NOK 1 000 | UNAUDITED OCT-DEC 2018 |
UNAUDITED OCT-DEC 2017 |
CHANGE | CHANGE % | UNAUDITED JAN-DEC 2018 |
JAN-DEC 2017 |
CHANGE | CHANGE % |
|---|---|---|---|---|---|---|---|---|
| Profit for the period | 53 536 | 39 670 | 13 866 | 35.0 % | 150 497 | 112 022 | 38 475 | 34.3 % |
| Items that may be reclassified through profit or loss in subsequent periods |
||||||||
| Currency translation differences | 563 | 114 | 449 | 393.8 % | -28 | 171 | -200 | -116.4 % |
| Sum other income and costs | 563 | 114 | 449 | 393.8 % | -28 | 171 | -200 | -116.4 % |
| Total comprehensive income | 54 099 | 39 784 | 14 315 | 36.0 % | 150 469 | 112 193 | 38 275 | 34.1 % |
| Assigned to: | ||||||||
| Shareholders in parent company | 34 099 | 39 308 | 150 469 | 110 803 | ||||
| Non-controlling interests | 0 | 477 | 0 | 1 390 |
| NOK 1 000 | UNAUDITED 31.12.2018 |
31.12.2017 | CHANGE | CHANGE % |
|---|---|---|---|---|
| ASSETS | ||||
| NON-CURRENT ASSETS | ||||
| Intangible assets | ||||
| Goodwill | 32 944 | 33 460 | -516 | -1.5 % |
| Other intangible assets | 34 070 | 27 764 | 6 306 | 22.7 % |
| Total intangible assets | 67 014 | 61 224 | 5 790 | 9.5 % |
| Fixed assets | ||||
| Office equipment | 25 187 | 16 973 | 8 214 | 48.4 % |
| Office machines and vehicles | 5 907 | 3 425 | 2 482 | 72.5 % |
| IT equipment | 20 112 | 17 755 | 2 357 | 13.3 % |
| Total fixed assets | 51 206 | 38 153 | 13 053 | 34.2 % |
| Financial non-current assets | ||||
| Other financial assets | 11 | 116 | -105 | -90.5 % |
| Other long-term receivables | 1 935 | 2 009 | -74 | -3.7 % |
| Total financial non-current assets | 1 946 | 2 125 | -179 | -8.4 % |
| Total non-current assets | 120 166 | 101 502 | 18 664 | 18.4 % |
| CURRENT ASSETS | ||||
| Work in progress | 55 520 | 84 787 | -29 267 | -34.5 % |
| Trade accounts receivable | 269 718 | 224 645 | 45 073 | 20.1 % |
| Other short-term receivables | 30 765 | 27 783 | 2 982 | 10.7 % |
| Cash and cash equivalents | 278 388 | 205 371 | 73 017 | 35.6 % |
| Total current assets | 634 391 | 542 586 | 91 805 | 16.9 % |
| TOTAL ASSETS | 754 557 | 644 088 | 110 469 | 17.2 % |
| NOK 1 000 | UNAUDITED 31.12.2018 |
31.12.2017 | CHANGE | CHANGE % |
|---|---|---|---|---|
| EQUITY AND LIABILITIES | ||||
| EQUITY | ||||
| Paid-in capital | ||||
| Share capital | 10 250 | 10 250 | 0 | 0.0 % |
| Own shares - nominal value | -1 | -47 | 46 | -97.9 % |
| Share premium fund | 10 000 | 10 000 | 0 | 0.0 % |
| Total paid-in capital | 20 249 | 20 203 | 46 | 0.2 % |
| Earned equity | ||||
| Other equity | 256 744 | 197 186 | 59 558 | 30.2 % |
| Total earned equity | 256 744 | 197 186 | 59 558 | 30.2 % |
| Non-controlling interests | 0 | 3 019 | -3 019 | -100.0 % |
| Total equity | 276 993 | 220 408 | 56 585 | 25.7 % |
| DEBT | ||||
| Long-term debt | ||||
| Deferred tax | 574 | 218 | 356 | 163.3 % |
| Total long-term debt | 574 | 218 | 356 | 163.3 % |
| Short-term debt | ||||
| Trade accounts payable | 58 012 | 56 865 | 1 147 | 2.0 % |
| Income tax payable | 41 279 | 31 593 | 9 686 | 30.7 % |
| Public duties payable | 169 088 | 158 026 | 11 062 | 7.0 % |
| Deferred revenue | 16 678 | 17 275 | -597 | -3.5 % |
| Other short-term debt | 191 933 | 159 703 | 32 230 | 20.2 % |
| Total short-term debt | 476 990 | 423 462 | 53 528 | 12.6 % |
| Total liabilities | 477 564 | 423 680 | 53 884 | 12.7 % |
| TOTAL EQUITY AND LIABILITIES | 754 557 | 644 088 | 110 469 | 17.2 % |
| NOK 1 000 | UNAUDITED OCT-DEC 2018 |
UNAUDITED OCT-DEC 2017 |
UNAUDITED JAN-DEC 2018 |
JAN-DEC 2017 |
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| Ordinary profit before tax | 66 316 | 49 845 | 191 575 | 145 936 |
| Paid tax | -7 351 | 971 | -30 807 | -25 582 |
| (Gain)/loss on sale of fixed assets | -21 | 63 | -406 | -98 |
| Ordinary depreciation | 4 190 | 3 597 | 17 388 | 12 994 |
| Amortisation intangible assets | 1 652 | 1 881 | 7 414 | 8 149 |
| Share based payments | 1 894 | 1 661 | 7 272 | 6 449 |
| Changes in work in progress, accounts receivable and accounts payable | 71 696 | 24 048 | -14 658 | -56 834 |
| Changes in other accruals | 77 559 | 76 491 | 41 193 | 58 020 |
| Net cash flow from operating activities | 215 935 | 158 558 | 218 971 | 149 035 |
| Cash flows from investing activities | ||||
| Sale of fixed assets | 47 | 16 | 574 | 971 |
| Purchase of fixed assets | -5 361 | -3 004 | -30 609 | -20 358 |
| Purchase of intangible assets | -4 606 | -1 278 | -13 718 | -10 540 |
| Investment in subsidiaries - net cash | 0 | 0 | -13 390 | 0 |
| Net cash flow from investing activities | -9 921 | -4 266 | -57 143 | -29 927 |
| Cash flows from financing activities | ||||
| Purchase of own shares | -8 924 | 0 | -19 544 | -11 190 |
| Sales of own shares | 17 858 | 9 484 | 17 858 | 9 484 |
| Dividend payments | 0 | 0 | -87 125 | -73 750 |
| Net cash flow from financing activities | 8 934 | 9 484 | -88 811 | -75 456 |
| Net changes in cash and cash equivalents | 214 948 | 163 776 | 73 017 | 43 652 |
| Cash and cash equivalents at the beginning of the period | 63 440 | 41 595 | 205 371 | 161 719 |
| Cash and cash equivalents at the end of the period | 278 388 | 205 371 | 278 388 | 205 371 |
| NOK 1 000 | SHARE CAPITAL |
OWN SHARES |
SHARE PREMIUM |
TOTAL PAID-IN EQUITY |
OTHER EQUITY |
TRANSLATION DIFFERENCES |
TOTAL OTHER EQUITY |
NON CONTROLLING INTERESTS |
TOTAL EQUITY |
|---|---|---|---|---|---|---|---|---|---|
| Equity at 01.01.2017 | 10 250 | -99 | 10 000 | 20 151 | 153 021 | -643 | 152 378 | 3 629 | 176 158 |
| Profit for the period | 0 | 110 632 | 110 632 | 1 390 | 112 022 | ||||
| Other income and costs | 0 | 171 | 171 | 171 | |||||
| Purchase/sale of own shares (net) | 52 | 52 | -1 758 | -1 758 | -1 706 | ||||
| Employee share scheme | 0 | 7 514 | 7 514 | 7 514 | |||||
| Dividend | 0 | -71 750 | -71 750 | -2 000 | -73 750 | ||||
| Equity at 31.12.2017 | 10 250 | -47 | 10 000 | 20 203 | 197 659 | -472 | 197 186 | 3 019 | 220 408 |
| Equity at 01.01.2018 | 10 250 | -47 | 10 000 | 20 203 | 197 659 | -472 | 197 186 | 3 019 | 220 408 |
| Profit for the period | 0 | 150 497 | 150 497 | 150 497 | |||||
| Other income and costs | 0 | -28 | -28 | -28 | |||||
| Purchase/sale of own shares (net) | 46 | 46 | -1 680 | -1 680 | -1 634 | ||||
| Employee share scheme | 0 | 8 264 | 8 264 | 8 264 | |||||
| Change non-controlling interests | 0 | -10 371 | -10 371 | -3 019 | -13 390 | ||||
| Dividend | 0 | -87 125 | -87 125 | -87 125 | |||||
| Equity at 31.12.2018 (Unaudited) | 10 250 | -1 | 10 000 | 20 249 | 257 244 | -500 | 256 744 | 0 | 276 993 |
The group made no changes to the accounting principles applied in 2018. This interim report is presented in accordance with the International Financial Reporting Standards (IFRS) and interpretations determined by the European Union, and have been prepared in accordance with IAS 34. The interim financial statements have not been audited, do not include all the information required in annual financial statements and should be viewed in conjunction with the group's annual report for 2017.
The accounting policies applied are consistant with those applied in previous financial year, except for the implementation of IFRS 9 - Financial Instuments and IFRS 15 - Revenue from Contracts with Customers. IFRS 9 includes revised guidance on classification and measurement, impairment and hedge accounting. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. The adoption of IFRS 9 has not had significant impact on the Group financial statement. IFRS 15 replaces all existing standards and interpretations relating to revenue recognition. The core principle of IFRS 15 is for companies to recognise revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The Group has performed analyses of customer contracts and revenue streams in accordanse with the accounting standards 5-step model, and concluded that the new standard have no significant impact on
the Group`s revenue recognition principles.
IFRS 16 Leases replaces existing IFRS leases requirements, IAS 17 Leases. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, ie the customer ('lessee') and the supplier ('lessor'). IFRS 16 is effective for financial yearannual periods beginning on or after 1 January 2019. The implication of the new standard is that the Group will have to recognise assets and liabilities in the balance sheet for several leases. The new leases standard requires lessees to recognise assets and liabilities for most leases, which is a significant change from current requirements.
An estimation on current leases per 31 December 2018 indicates a balance recognition of MNOK 226. This will reduce the equity ratio with 8 percentage points. Under today's IFRS regulations lease amounts for operational leases are recognised as operating expenses. In accordance with the new regulations leases recognised in the balance sheet will be depreciated over the lease period and recognised together with the Group's remaining depreciations. Interest effect from the discount calculation will be recognised as financial items. Due to the new regulations the Group's EBIT will slightly increase, provided the same type and number of lease objects. See note 20 Annual Report 2017 for information on the group`s lease commitments.
The Group is primarily delivering its services based on time and material used and has in most cases legal rights for payment for services delivered at date. The Group has some income from projects where the Group shall deliver a predefined result at a price that is either fixed or has elements causing income per hour not to be known before the projects are finalised.
For these projects the income is recorded in correlation with the degree of completion. Progress is measured as incurred hours in relation to totally estimated hours. For these projects the customer controles the asset being made or improved. The Group is therefore very little affected by the changes caused from adoption of IFRS 15.
| NOK 1 000 | OCT-DEC 2018 | OCT-DEC 2017 |
|---|---|---|
| Contract category | ||
| Fixed- and target price | 8 012 | 11 547 |
| Variable contracts | 527 385 | 446 852 |
| Total revenue | 535 397 | 458 399 |
| Business sector | ||
| Bank & finance | 25 655 | 18 976 |
| Power supply | 53 126 | 39 074 |
| Health | 11 853 | 10 664 |
| Industry | 20 792 | 20 097 |
| Info and communication | 20 154 | 30 711 |
| Public admin | 151 439 | 132 074 |
| Oil & gas | 134 265 | 104 699 |
| Service industry | 28 120 | 26 202 |
| Transportation | 47 268 | 41 647 |
| Retail | 30 122 | 24 526 |
| Other | 12 604 | 9 728 |
| Total revenue | 535 397 | 458 399 |
| Public/privat sector | ||
| Public sector (100% owned) | 273 038 | 235 866 |
| Privat sector | 262 359 | 222 533 |
| Total revenue | 535 397 | 458 399 |
| Work in progress | 55 520 | 84 787 |
| Deferred revenue | 16 678 | 17 275 |
At the balance sheet date, processed but not billed services amounted to NOK 55.52 million (2017.12.31: NOK 84.79 million). This is mainly services delivered on running account, invoiced to customers at the beginning of the next month.
Intangible assets and goodwill are related to added value from the acquisitions of subsidiaries, businesses, and costs related to development of software and internally developed internet homepage.
| NOK 1 000 | SOFTWARE | OTHER INTANGIBLE ASSETS |
GOODWILL | JAN-DEC 2018 |
SOFTWARE | OTHER INTANGIBLE ASSETS |
GOODWILL | JAN-DEC 2017 |
|---|---|---|---|---|---|---|---|---|
| Book value 1 January | 20 002 | 7 762 | 33 460 | 61 224 | 15 718 | 9 314 | 32 782 | 57 814 |
| Additions of the period | 0 | 931 | 0 | 931 | 1 104 | 0 | 1 104 | |
| Self-developed software | 12 787 | 0 | 0 | 12 787 | 9 436 | 0 | 0 | 9 436 |
| Amortisation | -4 883 | -2 531 | 0 | -7 414 | -5 152 | -2 997 | 0 | -8 149 |
| Exchange rate variances | 0 | 3 | -516 | -513 | 0 | 341 | 678 | 1 019 |
| Book value end of period | 27 906 | 6 165 | 32 944 | 67 014 | 20 002 | 7 762 | 33 460 | 61 224 |
| Amortisation rate | 20% | 10-20% | N/A | 20% | 10-20% | N/A | ||
| Economic life | 5 years | 5-10 years not decided | 5 years | 5-10 years not decided | ||||
| Amortisation method | linear | linear | N/A | linear | linear | N/A |
The group is developing a software for sale, Sesam, that works as a search engine for enterprise data. Sesam can collect all type of information, tie it together and make use of the compound information in a range of valuable services. Version 3 of Sesam was completed September 2016 with investment costs of NOK 10 783 thousand. Version 4 of Sesam was completed December 2017 with investment costs of NOK 12 250 thousand. Version 5 is under development and one part was completed in June and taken use of in July. The rest has an expected completion during first half year of 2019. So far the investment costs is NOK 12 787 thousand. All versions has an economic life of 5 years.
| SHARES IN THOUSANDS | OCT-DEC 2018 | OCT-DEC 2017 |
|---|---|---|
| Ordinary shares, nominal value NOK 1 | 10 250 | 10 250 |
| Total number of shares | 10 250 | 10 250 |
The nominal value of the share is NOK 1. All shares in the company have equal voting rights and are equally entitled to dividend.
| NO. OF SHARES | SHARE CAPITAL | ||||
|---|---|---|---|---|---|
| NOK 1 000 | OCT-DEC 2018 | OCT-DEC 2017 | OCT-DEC 2018 | OCT-DEC 2017 | |
| Ordinary shares issued and fully paid at 31.12. | 10 250 | 10 250 | 10 250 | 10 250 | |
| Own shares at nominal value | -1 | -47 | -1 | -47 |
In the period, Bouvet ASA, has purchased 40 000 own shares at an average price of NOK 223.10 per share and sold 135 789 own shares to employees within the group at a total amount of NOK 24 551 thousand, giving an average sales price of NOK 180.80 per share (which includes the element of remuneration). The cash consideration for these shares was NOK 14 905 thousand. The Company owns 1 264 own shares at the end of the period.
| NO. OF SHARES | |||||
|---|---|---|---|---|---|
| NAME | ROLE | 30.09.2018 | BUY | SALE | 31.12.2018 |
| Pål Egil Rønn | Chairman of the Board | 0 | 0 | ||
| Tove Raanes | Vice-chairman of the Board | 895 | 895 | ||
| Grethe Høiland | Board member | 0 | 0 | ||
| Ingebrigt Steen Jensen | Board member | 0 | 0 | ||
| Egil Christen Dahl | Board member | 453 502 | 453 502 | ||
| Sverre F. Hurum | CEO | 508 366 | 413 | 508 779 | |
| Erik Stubø | CFO | 237 866 | 413 | 238 279 | |
| Total | 1 200 629 | 826 | 0 | 1 201 455 |
Shares in the company directly or indirectly owned by the Board and management
There have been no events after the balance sheet date significantly effecting the Group's financial position.
The European Securities an Markets Authority ("ESMA") issued guidelines on Alternative Performance Measures ("APMs") that came into force on July 3, 2016. Bouvet discloses APMs that are frequently used by investors, analysts, and other interested parties. The management believes that the disclosed APMs provide improved insight into the operations, financing, and prospects of Bouvet. Bouvet has defined the following APMs:
EBITDA is short for earnings before interest, taxes, depreciation, and amortization. EBITDA is calculated as profit for the period before tax expense, financial items, depreciation, and amortization.
EBIT is short for earnings before interest and taxes. EBIT corresponds to operating profit in the consolidated income statement.
Net free cash flow is calculated as net cash flow from operations plus net cash flow from investing activities. EBITDA-margin is calculated as EBITDA divided by revenue.
EBIT-margin is calculated as EBIT divided by revenue.
Cash flow margin is calculated as Net cash flow from operations divided by revenue.
Equity ratio is calculated as total equity divided by total assets.
Liquidity ratio is calculated as current assets divided by short-term debt.
| NOK 1 000 | OCT-DEC 2018 | OCT-DEC 2017 | CHANGE % | JAN-DEC 2018 | JAN-DEC 2017 | CHANGE % |
|---|---|---|---|---|---|---|
| INCOME STATEMENT | ||||||
| Operating revenue | 535 397 | 458 399 | 16.8 % | 1 846 711 | 1 607 353 | 14.9 % |
| EBITDA | 71 024 | 54 591 | 30.1 % | 216 364 | 165 280 | 30.9 % |
| Operating profit (EBIT) | 65 182 | 49 113 | 32.7 % | 191 562 | 144 137 | 32.9 % |
| Ordinary profit before tax | 66 316 | 49 845 | 33.0 % | 191 575 | 145 936 | 31.3 % |
| Profit for the period | 53 536 | 39 670 | 35.0 % | 150 497 | 112 022 | 34.3 % |
| EBITDA-margin | 13.3 % | 11.9 % | 11.4 % | 11.7 % | 10.3 % | 13.9 % |
| EBIT-margin | 12.2 % | 10.7 % | 13.6 % | 10.4 % | 9.0 % | 15.7 % |
| BALANCE SHEET | ||||||
| Non-current assets | 120 166 | 101 502 | 18.4 % | 120 166 | 101 502 | 18.4 % |
| Current assets | 634 391 | 542 586 | 16.9 % | 634 391 | 542 586 | 16.9 % |
| Total assets | 754 557 | 644 088 | 17.2 % | 754 557 | 644 088 | 17.2 % |
| Equity | 276 993 | 220 408 | 25.7 % | 276 993 | 220 408 | 25.7 % |
| Long-term debt | 574 | 218 | 163.3 % | 574 | 218 | 163.3 % |
| Short-term debt | 476 990 | 423 462 | 12.6 % | 476 990 | 423 462 | 12.6 % |
| Equity ratio | 36.7 % | 34.2 % | 7.3 % | 36.7 % | 34.2 % | 7.3 % |
| Liquidity ratio | 1.33 | 1.28 | 3.8 % | 1.33 | 1.28 | 3.8 % |
| CASH FLOW | ||||||
| Net cash flow operations | 215 935 | 158 557 | 36.2 % | 218 971 | 149 035 | 46.9 % |
| Net free cash flow | 206 014 | 154 292 | 33.5 % | 161 828 | 119 108 | 35.9 % |
| Net cash flow | 214 948 | 163 775 | 31.2 % | 73 017 | 43 652 | 67.3 % |
| Cash flow margin | 40.3 % | 34.6 % | 16.6 % | 11.9 % | 9.3 % | 27.9 % |
| SHARE INFORMATION | ||||||
| Number of shares | 10 250 000 | 10 250 000 | 0.0 % | 10 250 000 | 10 250 000 | 0.0 % |
| Weighted average basic shares outstanding Weighted average diluted shares outstanding |
10 191 679 10 292 204 |
10 144 777 10 252 237 |
0.5 % 0.4 % |
10 169 093 10 268 110 |
10 133 943 10 248 708 |
0.3 % 0.2 % |
| EBIT per share | 6.40 | 4.78 | 33.8 % | 18.84 | 14.04 | 34.1 % |
| Diluted EBIT per share | 6.33 | 4.73 | 33.9 % | 18.66 | 13.89 | 34.4 % |
| Earnings per share | 5.25 | 3.86 | 36.0 % | 14.80 | 10.92 | 35.6 % |
| Diluted earnings per share | 5.21 | 3.82 | 36.3 % | 14.66 | 10.79 | 35.8 % |
| Equity per share | 27.02 | 21.50 | 25.7 % | 27.02 | 21.50 | 25.7 % |
| Dividend per share | 0.00 | 0.00 | I/A | 8.50 | 7.00 | 21.4 % |
| EMPLOYEES | ||||||
| Number of employees (year end) | 1 369 | 1 215 | 12.7 % | 1 369 | 1 215 | 12.7 % |
| Average number of employees | 1 362 | 1 221 | 11.5 % | 1 305 | 1 171 | 11.4 % |
| Operating revenue per employee | 393 | 375 | 4.7 % | 1 415 | 1 373 | 3.1 % |
| Operating cost per employee | 345 | 335 | 3.0 % | 1 268 | 1 250 | 1.5 % |
| EBIT per employee | 48 | 40 | 19.0 % | 147 | 123 | 19.3 % |
| Cash flow margin | Net cash flow operations / Operating revenue |
|---|---|
| Diluted earnings per share | Profit for the period assigned to shareholders in parent company / weighted average diluted shares outstanding |
| Diluted EBIT per share | EBIT assigned to shareholders in parent company / weighted average diluted shares outstanding |
| Dividend per share | Paid dividend per share througout the year |
| Earnings per share | Profit for the period assigned to shareholders in parent company / weighted average basic shares outstanding |
| EBIT | Operating profit |
| EBIT per employee | EBIT / average number of employees |
| EBIT per share | EBIT assigned to shareholders in parent company / weighted average basic shares outstanding |
| EBITDA | Operating profit + depreciation fixed assets and intangible assets |
| EBITDA-margin | EBITDA / operating revenue |
| EBIT-margin | EBIT / operating revenue |
| Equity per share | Equity / number of shares |
| Equity ratio | Equity / total assets |
| Liquidity ratio | Current assets / Short-term debt |
| Net free cash flow | Net cash flow operations - Net cash flow investments |
| Number of shares | Number of issued shares at the end of the year |
| Operating cost per employee | Operating cost / average number of employees |
| Operating revenue per employee | Operating revenue / average number of employees |
| Weighted average basic shares outstanding | Issued shares adjusted for own shares on average for the year |
| Weighted average diluted shares outstanding | Issued shares adjusted for own shares and share scheme on average for the year |
The Group has 13 offices in Norway and Sweden. Our philosophy is that competence should be utilized across the company, while projects are attached locally.
Sørkedalsveien 8 NO-0369 Oslo P. O. Box 5327 Majorstuen NO-0304 Oslo Tel: (+47) 23 40 60 00
Frolandsveien 6 NO-4847 Arendal Tel: (+47) 23 40 60 00
Solheimsgaten 15 NO-5058 Bergen Tel: (+47) 55 20 09 17
Uniongata 18 Klosterøya NO-3732 Skien Tel: (+47) 23 40 60 00
Kjøita 25 NO-4630 Kristiansand Tel: (+47) 23 40 60 00
Laberget 28 NO-4020 Stavanger P. O. Box 130 NO-4065 Stavanger Tel: (+47) 51 20 00 20
Diktervegen 8 NO-5538 Haugesund Tel: (+47) 52 82 10 17
Kjøpmannsgata 35 NO-7011 Trondheim Tel: (+47) 23 40 60 00
SANDEFJORD Fokserødveien 12 NO-3241 Sandefjord Tel: (+47) 23 40 60 00
Östermalmsgatan 87 A 114 59 Stockholm Tel: (+ 46) 0 771 611 100
Forskargatan 3 781 70 Borlänge Tel: (+46) 0 771 611 100
Kungsgatan 1 702 11 Örebro Tel: (+46) 0 709 431 411
en.bouvet.no
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