Multiconsult

Earnings Release • Nov 8, 2018

Focus on regaining profitability level

Focus on regaining profitability level

Today, Multiconsult presents an update to the capital markets, announcing a

revised strategy towards 2020. The revised strategy has an increased focus on

profitability, with new measures to improve gain and operations.

Multiconsult presented the '3-2-1 GO' strategy in 2016 for the period of 2016 to

2020. As it is now halfway through the strategic period, a revised strategy 'GO'

is presented. '3-2-1 GO' launched in October 2016 after a successful IPO, was a

well-underpinned strategy, reflecting a Multiconsult with a strong financial

performance that was above peers. In 2017 the industry faced an increased

profitability challenge in Norway caused by an increasing gap between market

billing rates and annual salary increases. In addition, Multiconsult experienced

costs of ERP system implementation and acquisition of the Hjellnes group. In

light of the challenging profitability situation, the company has focused on

profitability improvement, but sees a need to intensify the efforts to improve

operations as well as utilise its market position to regain profitability.

Hence, the revised strategy now focuses on improving profitability through gains

and operations, to further develop the Multiconsult group.

"Our industry is in one of the most challenging times ever when it comes to

price-pressure. At the same time, the market outlook for our business areas is

good when it comes to volume and opportunities with an all-time high pipeline

within some of our business areas. In order to continue developing for the

future, it is necessary to regain normal profitability levels first. This is

what we are now doing with the revised "GO" strategy". Our ambition is to

deliver profitability above peer-group average and strengthen our operations and

value creation, says CEO of Multiconsult, Christian Nørgaard Madsen.

The revised strategy represents an unchanged course, but reduced speed.

Multiconsult's revenue ambition is now to grow in line with market development.

The long-term goal of selective expansion in Sweden and Energy international

remains, however, execution horizon is postponed until profitability is

regained.

"GO" stands for ambitions of "Gain and Operations". The ambition for "Gain"

means being on a profitability level above the peer group average. The ambition

for "Operations" means strengthened operations and value creation.

'GO' focuses on improving 'Gain and Operations' with seven key priorities:

· Regain a normalised profitability level as a basis for further development

· Take a position as #1 in large profitable EPC/IPD projects in Norway

· Take a leading position and improved profitability within Transportation

· Realise profitability and selective growth within Energy in Norway and

internationally

· Further develop our leading position within healthcare buildings in

Scandinavia

· Enable digital innovation and develop new business models

·  Develop flexible manning solutions that ensure profitability

Profitability is the main priority going forward, and Multiconsult will now

apply an intensified profitability improvement programme across the group.

Developments will be monitored continuously and new measures implemented as

deemed relevant.

Multiconsult will, on a group-wide basis, intensify its focus on profitability

improvement:

· Sales: Further develop sales processes across the group and prioritise

tendering with increased profitability requirements.

· Billing ratio: Continue improvements in Norway and optimise hours spent on

architecture competitions

· Project profitability: Standardise project portfolio follow-up, increase use

of low cost resources and optimise project resources and staffing.

· Efficiency gains: Realise group synergies from new systems, continue tight

manning- and cost control and explore flexible manning models.

· Portfolio review: Address challenges in international units and optimise

business development in international energy.

The debt level and dividend policy remain unchanged with respectively 1.5 times

NIBD/EBITDA (Net interest bearing debt/Earnings before interest tax depreciation

and amortisation) as well as a dividend policy of 50% of net profit.

For more information, please contact:

Investor relations:

Mirza Koristovic, Head of Investor Relations

Phone: +47 93 87 05 25

E-mail: ir@multiconsult.no

Media:

Gaute Christensen, VP Communications

Phone: +47 911 70 188

E-mail: gaute.christensen@multiconsult.no