Quarterly Report • Aug 23, 2018
Quarterly Report
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| Amounts in MNOK (except EPS, shares and percentage) | Q1 2018 | Q1 2017 | FY 2017 |
|---|---|---|---|
| FINANCIAL | |||
| Net operating revenues | 859.1 | 799.7 | 2 977.6 |
| Growth (%) | 7.4% | 22.3% | 14.3% |
| EBITDA | 48.4 | 105.5 | 164.7 |
| EBITDA margin (%) | 5.6% | 13.2% | 5.5% |
| EBIT | 36.1 | 94.4 | 118.0 |
| EBIT margin (%) | 4.2% | 11.8% | 4.0% |
| Basic earnings per share (NOK) | 0.94 | 2.75 | 3.01 |
| Average number of shares | 26 970 338 | 26 247 202 | 26 407 850 |
| Net interest bearing debt (negative is asset) | 255.0 | 9.8 | 134.5 |
| Cash and cash equivalents | 151.7 | 146.9 | 154.3 |
| Order intake | 1 101.2 | 1 073.7 | 3 762.5 |
|---|---|---|---|
| Order backlog | 2 226.9 | 1 966.5 | 2 147.7 |
| Billing ratio (%) | 70.6% | 68.4% | 67.0% |
| Employees | 2 861 | 2 471 | 2 851 |
Multiconsult had a first quarter EBIT of NOK 36.1 million, negatively impacted by Easter holiday calendar effect of six less working days in Norway compared to first quarter 2017. Net operating revenues grew by 7.4% to NOK 859.1 million in the quarter. The profitability improvement program is the number one priority and progress is on track with tangible improvements already seen in Regions Norway.
(Figures in brackets = same period prior year or relevant balance sheet date 2018).
Net operating revenues increased by 7.4% to NOK 859.1 million (NOK 799.7 million) compared to the same quarter last year. The increase in net operating revenues reflects higher production due to acquisition of the Hjellnes group and Iterio AB as well as net recruitment. The billing ratio increased to 70.6% (68.4%) and contributed positively to growth in net operating revenues. However, there was a significant calendar effect of six less working days in Norway in the quarter, of approximately NOK 70 million, which partly offset growth in net operating revenues. Net project writedowns of NOK 12.6 million impacted net operating revenues negatively, reflecting a relatively normal level. Group billing rates increased modestly compared to the first quarter 2017. Buildings & Properties projects like Campus Ås, Transportation projects like Fornebubanen and Renewable energy projects like Neelum Jhelum were major contributors to operating revenues.
Operating expenses increased by 16.8% to NOK 810.6 million (NOK 694.2 million). The increase is mainly attributable to higher employee benefit expenses caused by increased headcount from acquisitions and net recruitment in addition to ordinary salary adjustment. Other operating expenses increased in line with headcount in the quarter.
EBITDA was NOK 48.4 million (NOK 105.5 million), a decrease of 54.1% compared to the same period last year, reflecting higher net operating revenues, which were more than offset by higher operating expenses in the quarter, mainly due to the significant calendar effect.
EBIT amounted to NOK 36.1 million (NOK 94.4 million) providing a 4.2% EBIT margin. Adjusted for the calendar effect, EBIT margin is 11.3% in the quarter.
Results from associated companies and joint ventures amounted to NOK 0.2 million (NOK 0.5 million).
Net financial items were an expense of NOK 2.4 million (NOK 0.7 million), due to higher interest bearing debt.
Group tax rate was 25.4% (24%).
Reported profit for the period was NOK 25.3 million (NOK 72.1 million). Earnings per share for the quarter were NOK 0.94 (NOK 2.75).
Net cash flow from operating activities was negative NOK 97.9 million (NOK 66.8 million). The increase was related to lower profit before tax, mainly due to calender effect in the quarter. This effect more than offset lower paid income tax and improved change in working capital.
Net cash flow used in investment activities was NOK 14.6 million this quarter (NOK 63.3 million), related to ordinary asset replacement. In the first quarter 2017 investment activities included the acquisition of Iterio AB.
Net cash flow from financing activities amounted to NOK 118.6 million (NOK 97.2 million), due to a higher level of interest bearing debt.
As of 31 March 2018, total assets amounted to NOK 1 957.9 million (NOK 1 811.1 million at 31 December 2017), and total equity amounted to NOK 595.7 million (NOK 582.1 million at 31 December 2017).
The group held cash and cash equivalents of NOK 151.7 million as of 31 March 2018 (NOK 154.3 million at 31 December 2017). Net interest bearing debt amounted to NOK 255.1 million (NOK 134.5 million at 31 December 2017), due to increased draw-down on overdraft facility as a result of normal seasonal variations in working capital.
The order backlog at the end of the first quarter 2018 was NOK 2 226.9 million (NOK 1 966.5 million), an increase of 13.2% year on year.
Order intake during the first quarter 2018 increased by 2.6% to NOK 1 101.2 million (NOK 1 073.7 million) compared to same quarter previous year. There was solid order intake within Buildings & Properties, and Transportation in the quarter. Many small and mid-size contracts have been awarded in the period and the project tender pipeline remains strong.
Among important new contracts this quarter were consultancy services for Riksvei 3 and 25, as a subcontractor to Aas
Jakobsen, for Skanska, as well as the bus lane Diagonalen – Hans-Grete trail in Sandnes with Statens vegvesen. A significant new frame agreement was awarded for pre design of submarine maintanence facilities at Haakonsvern for Forsvarsbygg. Important add-ons to existing contracts this quarter were the New Airbase Ørland with Forsvarsbygg and Campus Ås for Statsbygg, as well as Kamuzu Barrage in Malawi.
Call-offs on frame agreements are only included in the order backlog when signed. This means for example that the new and significant frame agreement at Haakonsvern for Forsvarsbygg is only included when call-offs are signed.
In the light of the weak results in 2017, the group launched a comprehensive profitability program with a target of improving the EBIT margin to a minimum of 6.0% for 2018. The program focuses primarily on improving operations in the Greater Oslo Area and Regions Norway with priority on improving sales, billing ratio and project execution. The program also includes measures to achieve efficiency gains and general
cost reductions. Regions Norway has seen significant improvements in its billing ratio and order intake in the period.
The Greater Oslo Area organisation managed a modest improvement in its billing ratio, despite still being impacted by comprehensive reorganisation and the onboarding of the Hjellnes group.
Multiconsult's segments are presented as three geographical segments, Greater Oslo Area, Regions Norway, International, and a segment for LINK arkitektur.
The segment offers services in six business areas and comprises the central area of eastern Norway, with regional offices in Oslo, Fredrikstad and Drammen.
| Q1 | Q1 | FY | |
|---|---|---|---|
| Amounts in MNOK | 2018 | 2017 | 2017 |
| Net op. revenues | 393.0 | 350.6 | 1 307.0 |
| EBITDA | 15.4 | 55.7 | 80.6 |
| EBITDA % | 3.9% | 15.9% | 6.2% |
| Order intake | 431.6 | 476.1 | 1 685.1 |
| Order Backlog | 830.9 | 832.2 | 878.6 |
| Billing ratio | 69.6% | 68.0% | 67.0% |
| Employees | 1 172 | 898 | 1 179 |
Net operating revenues in the quarter increased by 12.1% to NOK 393.0 million (NOK 350.6 million) compared to the same quarter last year. The increase was mainly driven by the acquisition of the Hjellnes group. The increase in net operating revenues was partly offset by the calendar effect of six less working days, which represents NOK 35.7 million. Net project write-downs further impacted net operating revenues negatively. The reorganisastion and integration of the Hjellnes group also impacted earnings negatively in the quarter. Buildings & Properties, Water & Environment and Transportation revenues increased, while Industry and Renewable Energy experienced a decrease compared to the same quarter last year. Billing rates remained stable in the quarter.
EBITDA amounted to NOK 10.1 million (NOK 55.7 million), a decrease of 81.9% from last year. Higher employee benefit expenses, mainly as a result of acquisitions and ordinary salary adjustment, contributed to the decrease in EBITDA.
Order intake in the first quarter was NOK 431.6 million (NOK 476.1 million), a decrease of 9.4% compared to the same quarter last year. This is mainly explained by weaker contribution from Renewable energy and Transportation. The decline in order intake was partly offset by strong growth within City & Society and Water & Environment. Important addons to existing contracts this quarter were the New Airbase Ørland and Campus Ås in Norway, as well as Kamuzu Barrage in Malawi. New contracts such as the new power station in Mosjøen for Alcoa were also awarded in the quarter.
Order backlog for the segment at the end of the first quarter 2018 amounted to NOK 830.9 million (NOK 832.2 million), down 0.2% year on year.
The segment offers services in six business areas and comprises regional offices in Stavanger, Bergen, Trondheim and Tromsø.
| Q1 2018 |
Q1 2017 |
FY 2017 |
|---|---|---|
| 279.3 | 281.9 | 1 027.3 |
| 19.5 | 28.2 | 37.1 |
| 7.0% | 10.0% | 3.6% |
| 415.4 | 223.8 | 976.7 |
| 525.9 | 437.2 | 408.5 |
| 69.9% | 66.5% | 67.3% |
| 842 | 807 | 841 |
Net operating revenues amounted to NOK 279.3 million (NOK 281.9 million), a decrease of 0.9% compared to the same quarter last year. Higher production, due to net recruitment
and a significantly improved billing ratio to 69.9% (66.5%), was more than offset by the calendar effect of six less working days, which represents NOK 28.7 million. Buildings & Properties, Industry and Water & Envornment increased, while Transportation experienced a decrease compared to the same quarter last year. There was a modest improvement in billing rates in the quarter.
EBITDA decreased by 30.7% to NOK 19.5 million (NOK 28.2 million). Higher employee benefit expenses due to increased headcount and ordinary salary adjustment contributed to the decrease in EBITDA.
Order intake in the first quarter was NOK 415.4 million (NOK 223.8 million), representing a significant increase of 85.6% compared to the same quarter last year. There was strong order intake in most business areas in the quarter, with major improvements in Buildings & Properties, Transportation and Industry. Among new contracts this quarter were the bus lane Diagonalen – Hans-Grete trail in Sandnes and Alversund Skole in Lindås. Important add-ons to existing contracts this quarter were platform extensions on Voss rail.
Order backlog for the segment at the end of the first quarter 2018 amounted to NOK 525.9 million (NOK 437.2 million), up 20.3% year on year.
The international segment comprises the subsidiaries Multiconsult UK, Multiconsult Asia, Multiconsult Polska and Iterio AB.
| Amounts in MNOK | Q1 2018 |
Q1 2017 |
FY 2017 |
|---|---|---|---|
| Net op. revenues | 51.1 | 46.5 | 177.8 |
| EBITDA | 5.9 | 13.6 | 19.3 |
| EBITDA % | 11.6% | 29.2% | 10.9% |
| Order intake | 47.9 | 163.5 | 402.4 |
| Order Backlog | 345.1 | 269.1 | 364.7 |
| Billing ratio | 75.7% | 73.3% | 71.5% |
| Employees | 241 | 208 | 216 |
Net operating revenues amounted to NOK 51.1 million (NOK 46.5 million), an increase of 9.9% compared to the same quarter last year. The increase in net operating revenues is mainly explained by increased billing ratio and increased capacity in Iterio AB, Multiconsult Polska and Multiconsult UK, while Multiconsult Asia had low project activity compared to the same quarter last year.
EBITDA was NOK 5.9 million (NOK 13.6 million), a decrease of 56.4% in the quarter. Multiconsult UK and Multiconsult Polska contributed positively, while Multiconsult Asia was negatively impacted by low activity level.
Order intake in the first quarter was NOK 47.9 million (NOK 163.5 million), a decrease of 70.7% compared to the same quarter last year. The same quarter last year included th acquisition of the backlog of NOK 85.4 million from Iterio AB. The main contribution in the first quarter this year came in Transportation projects for Multiconsult Polska and Iterio AB.
Order backlog at the end of the first quarter amounted to NOK 345.1 million (NOK 269.1 million), up 28.2% year on year.
This segment comprises LINK arkitektur with its 15 offices throughout Scandinavia.
| Amounts in MNOK | Q1 2018 |
Q1 2017 |
FY 2017 |
|---|---|---|---|
| Net op. revenues | 141.7 | 121.7 | 488.8 |
| EBITDA | 14.7 | 9.5 | 31.1 |
| EBITDA % | 10.4% | 7.8% | 6.4% |
| Order intake | 201.2 | 208.8 | 690.2 |
| Order Backlog | 525.0 | 428.0 | 496.0 |
| Billing ratio | 76.1% | 71.7% | 72.4% |
| Employees | 477 | 431 | 475 |
Net operating revenues amounted to NOK 141.7 million (NOK 121.7 million), an increase of 16.4% compared to the same quarter last year. Growth was mainly driven by a higher billing ratio of 76.1% (71.7%) as well as higher production from net recruitment. Growth in net operating revenues was partly offset by the calendar effect in Norway. Billing rates increased in the quarter.
EBITDA amounted to NOK 14.7 million (NOK 9.5 million) in the first quarter, an increase of 54.9%. Improved net operating revenues were partly offset by higher employee benefit expenses as a result of net recruitment.
Order intake in the first quarter was NOK 201.2 million (NOK 208.8 million), a decrease of 3.6% compared to the same quarter last year. The majority of the order intake in the quarter came from add-ons to existing contracts in addition to several smaller, but important new contracts. New awards in the quarter were the Dolviken project of 230 apartments as well as Kokstadflaten commercial real estate development in Bergen.
Order backlog for the segment at the end of the first quarter 2018 amounted to NOK 525.0 million (NOK 428.0 million), an increase of 22.7% compared to the same quarter last year.
At 31 March 2018 the group had 2 861 employees. The turnover ratio for the group was 5.9% for the period March 2017 to March 2018.
Number of employees
Multiconsult has adopted HSE policies and implemented guidelines to ensure compliance with applicable regulations and continued maintainance and development of its HSE standards. The company's HSE efforts are managed on both central and regional levels.
The recorded sick leave ratio for Multiconsult Norge AS was 4.3% in the first quarter.
A new organisational structure for The Greater Oslo Area was implemented on 1 March 2018. This has been a comprehensive organisational development process to reorganise and integrate more than 1 000 employees in business units from Multiconsult Norge AS, Hjellnes Consult AS, Johs Holt AS, and Analyse & Strategi AS.
In the 2018 Universum Survey, Multiconsult reconfirmed its leading position among consulting engineers for the sixth year in a row and is ranked higher than ever before. In the surveys
for both engineering students and professionals, Multiconsult was ranked number three among all companies in Norway.
The overall market outlook shows signs of positive development across all business areas.
Buildings & Properties is expected to maintain stable growth, although there is some uncertainty in the residential market in some regions. The outlook for the architecture market is fairly positive in all segments especially within healthcare buildings in Norway. Public sector investment is driving a strong outlook for Transportation within road and rail and several large projects are expected to be assigned in the coming year. The Renewable Energy market in Norway is expected to remain stable, with growth anticipated in the transmission sector. International Renewable Energy markets show a very strong pipeline, continuing to provide new business opportunities for Multiconsult. Investment in the Industry sector in Norway is expected to increase mainly in refineries, chemical production, aquaculture, and metal production. Demand for our services in the Oil & Gas market is expected to slowly improve going forward. Within Water & Environment there is a stable demand for water and waste infrastructure projects as well as for soil contamination inspections.
The overall competitive landscape has moved towards more Engineering, Procurement and Construction (EPC) contracts. The trend towards frame agreements is expected to continue especially within large and complex public projects. Continued strong competition is maintaining price pressure on large projects in Norway. Market rates have shown some improvement, however the cost level for the Norwegian workforce is creating challenges to profitability for the industry in general.
Multiconsult's strong market position, flexible business model and wide service offering provides a sound base for profitable growth, both domestic and international. Resources from Multiconsult Polska should gradually be phased into ongoing projects to strengthen competitiveness. The top line synergies between Multiconsult and LINK arkitektur are expected to continue to further strengthen the group's value proposition to customers. The integration of the Hjellnes group into the Greater Oslo Area is expected to provide top line synergies in the health care and transportation sectors.
The order backlog is stable and provides a strong foundation for profitable growth, supported by valuable frame agreements generated from a broad and robust customer base.
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 good insurance policies and routines for following up such cases. Further details regarding the insurance coverage are provided in note 19 to the consolidated financial statements for 2017. The largest claim at 31 March 2018 was related to Prinsensgate 26 project with Stortinget. The legal process is progressing as expected.
Multiconsult is exposed to credit risk, primarily related to transactions with clients and from bank deposits. The company's credit losses on accounts receivable have historically been modest. New customers are subject to credit assessment and approval before credit is extended to them. Responsibility for credit management in the parent company is centralised, and routines are integrated in the group's quality assurance system. The company has established routines for assessing the creditworthiness of the customer, and the possible need for bank guarantees or other risk mitigation measures.
The group is exposed to currency risk through ongoing projects abroad with fees generated in foreign currencies. Hedging contracts have been entered into for certain projects to reduce this risk. Currency risk is regarded as modest.
In the third quarter 2017, Multiconsult ASA increased its debt and restructured its credit facilities in connection with the acquisition of the Hjellnes group. Multiconsult ASA entered into a loan agreement with Nordea for NOK 215.0 million, which was used to settle the cash payment of NOK 119.0 million to the selling shareholders in the Hjellnes group as well as to pay down the previously drawn Multiconsult ASA revolving credit facility of NOK 95 million. Interest swaps have been entered into to ensure that approximately 50% of interest cost is at fixed rates.
Multiconsult Norge AS has an overdraft facility of NOK 320.0 million with the group's main bank.
Net operating revenues: Operating revenues less sub consultants and disbursements.
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.
EBITDA: EBIT before depreciation, amortisation and impairment.
EBITDA margin (%): EBITDA as a percentage of net operating revenues.
Operating expenses: Employee benefit expenses plus other operating expenses.
Net interest bearing debt: Non-current and current interest bearing liabilities deducted cash and cash equivalents.
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.
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.
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 2018
| Amounts in TNOK, except EPS | Q1 2018 | Q1 2017 | FY 2017 |
|---|---|---|---|
| Operating revenues | 1 021 979 | 892 624 | 3 375 399 |
| Expenses for sub consultants and disbursements | 162 890 | 92 887 | 397 758 |
| Net operating revenues | 859 089 | 799 736 | 2 977 642 |
| Employee benefit expenses | 663 426 | 568 285 | 2 319 810 |
| Other operating expenses | 147 216 | 125 934 | 493 088 |
| Operating expenses excl. depreciation and amortisation | 810 642 | 694 219 | 2 812 898 |
| Operating profit before depreciation and amortisation (EBITDA) | 48 447 | 105 518 | 164 744 |
| Depreciation and amortisation | 12 338 | 11 081 | 46 791 |
| Operating profit (EBIT) | 36 109 | 94 437 | 117 953 |
| Results from associated companies and joint ventures | 152 | 489 | 1 157 |
| Financial income | 922 | 1 114 | 2 956 |
| Financial expenses | 3 306 | 1 775 | 14 375 |
| Net financial items | (2 384) | (661) | (11 419) |
| Profit before tax | 33 877 | 94 265 | 107 691 |
| Income tax expense (Income) | 8 603 | 22 202 | 28 157 |
| Profit for the period | 25 274 | 72 064 | 79 534 |
| Attributable to: | |||
| Owners of Multiconsult ASA | 25 274 | 72 064 | 79 534 |
| Earnings per share | |||
| Basic and diluted (NOK) | 0.94 | 2.75 | 3.01 |
| Amounts in TNOK | Q1 2018 | Q1 2017 | FY 2017 |
|---|---|---|---|
| Profit for the period | 25 274 | 72 064 | 79 534 |
| Other comprehensive income | |||
| Remeasurment of defined benefit obligations | - | - | (1 452) |
| Tax | - | - | 334 |
| Total items that will not be reclassified to profit or loss | - | - | (1 118) |
| Currency translation differences | (11 609) | 3 051 | 13 802 |
| Total items that may be reclassified subsequently to profit or loss | (11 609) | 3 051 | 13 802 |
| Total other comprehensive income for the period | (11 609) | 3 051 | 12 684 |
| Total comprehensive income for the period | 13 665 | 75 115 | 92 218 |
| Attributable to: | |||
| Owners of Multiconsult ASA | 13 665 | 75 115 | 92 218 |
| Amounts in TNOK | At 31 March 2018 | At 31 March 2017 | At 31 December 2017 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Deferred tax assets | 23 211 | 26 080 | 25 610 |
| Intangible assets | 23 118 | 10 627 | 19 704 |
| Goodwill | 446 402 | 280 959 | 449 942 |
| Property, plant and equipment | 98 773 | 88 686 | 99 947 |
| Associated companies and joint ventures | 10 906 | 10 489 | 10 809 |
| Non-current receivables and shares | 7 194 | 8 071 | 6 995 |
| Assets for reimbursement of provisions | 21 000 | 20 700 | 22 000 |
| Total non-current assets | 630 604 | 445 611 | 635 007 |
| Current assets | |||
| Trade receivables | 600 655 | 464 665 | 588 377 |
| Work in progress | 474 798 | 368 320 | 368 447 |
| Other receivables and prepaid costs | 100 154 | 93 645 | 65 012 |
| Cash and cash equivalents | 151 721 | 146 881 | 154 291 |
| Total current assets | 1 327 328 | 1 073 511 | 1 176 126 |
| Total assets | 1 957 931 | 1 519 122 | 1 811 133 |
| EQUITY AND LIABILITIES | |||
| Shareholders' equity Total paid in equity |
91 242 | 26 235 | 91 242 |
| Other equity | 504 495 | 556 399 | 490 830 |
| Total shareholders' equity | 595 737 | 582 635 | 582 072 |
| Non-current liabilities | |||
| Retirement benefit obligations | 7 048 | 5 749 | 6 667 |
| Deferred tax | 13 734 | 12 883 | 13 835 |
| Provisions | 32 763 | 29 717 | 29 937 |
| Non-current interest bearing liabilities | 196 677 | 100 898 | 195 203 |
| Total non-current liabilities | 250 222 | 149 248 | 245 642 |
| Current liabilities | |||
| Trade payables 1) | 129 700 | 114 421 | 140 186 |
| Prepayments 1) | 90 383 | 78 387 | 97 871 |
| Current tax liabilities | 16 306 | 29 515 | 14 610 |
| VAT and other public taxes and duties payables | 289 855 | 226 550 | 296 266 |
| Current interest bearing liabilities | 210 084 | 55 811 | 93 573 |
| Other current liabilities1) | 375 644 | 282 556 | 340 913 |
| Total current liabilities | 1 111 972 | 787 239 | 983 420 |
| Total liabilities | 1 362 194 | 936 487 | 1 229 062 |
| Total equity and liabilities | 1 957 931 | 1 519 122 | 1 811 133 |
1) Restated 2017 figures, see note 2 section IFRS 15 Revenue from contracts with customers
| Amounts in TNOK | Share capital |
Own shares |
Share premium |
Total paid-in capital |
Retained earnings |
Pension | Translation differences |
Total equity |
|---|---|---|---|---|---|---|---|---|
| 31 December 2016 | 13 125 | (1) | 13 320 | 26 443 | 683 309 | (201 224) | (1 008) | 507 520 |
| Dividend | - | - | - | - | - | - | - | - |
| Treasury shares | - | - | - | - | - | - | - | - |
| Employee share purchase programme | - | - | - | - | - | - | - | - |
| Comprehensive income | - | - | - | - | 72 064 | - | 3 051 | 75 115 |
| 31 March 2017 | 13 125 | (1) | 13 320 | 26 443 | 755 374 | (201 224) | 2 043 | 582 635 |
| 31 December 2016 | 13 125 | (1) | 13 320 | 26 443 | 683 309 | (201 224) | (1 008) | 507 520 |
| Dividend | - | - | - | - | (78 715) | - | - | (78 715) |
| Share Issue | 361 | - | 64 438 | 64 799 | - | - | - | 64 799 |
| Treasury shares | - | 1 | 1 | 204 | - | - | 205 | |
| Employee share purchase programme | - | - | - | - | (3 955) | - | - | (3 955) |
| Comprehensive income | - | - | - | - | 79 534 | (1 118) | 13 802 | 92 218 |
| 31 December 2017 | 13 486 | - | 77 758 | 91 242 | 680 377 | (202 342) | 12 794 | 582 072 |
| Dividend | - | - | - | - | - | - | - | - |
| Share Issue | - | - | - | - | - | - | - | - |
| Treasury shares | - | - | - | - | - | - | - | - |
| Employee share purchase programme | - | - | - | - | - | - | - | - |
| Comprehensive income | - | - | - | - | 25 274 | - | (11 609) | 13 665 |
| 31 March 2018 | 13 486 | - | 77 758 | 91 242 | 705 653 | (202 342) | 1 185 | 595 737 |
| Amounts in TNOK | Q1 2018 | Q1 2017 | FY 2017 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before tax | 33 877 | 94 265 | 107 691 |
| Income taxes paid | (6 907) | (26 280) | (37 623) |
| Depreciation, amortization and impairment | 12 338 | 11 081 | 46 791 |
| Results from associated companies and joint ventures | (152) | (587) | (1 157) |
| Other non-cash profit and loss items | - | - | 2 010 |
| Sub total operating activities | 39 156 | 78 480 | 117 712 |
| Changes in working capital | (137 044) | (145 313) | (51 756) |
| Net cash flow from operating activities | (97 888) | (66 834) | 65 956 |
| Cash flows from investment activities | |||
| Net purchase and sale of fixed assets and financial non-current assets | (14 578) | (12 849) | (46 789) |
| Proceeds/payments related to equity accounted investments | - | - | 339 |
| Net cash effect of business combinations | - | (50 453) | (175 257) |
| Net cash flow used in investment activities | (14 578) | (63 302) | (221 707) |
| Cash flows from financing activities | |||
| Change in interest-bearing liabilities | 117 984 | 97 238 | 229 306 |
| Paid dividends | - | - | (78 715) |
| Sale treasury shares | 585 | - | 11 119 |
| Purchase treasury shares | - | - | (35 030) |
| Net cash flow from financing activities | 118 570 | 97 238 | 126 680 |
| Foreign currency effects on cash and cash equivalents | (8 674) | 3 789 | 7 372 |
| Net increase/decrease in cash and cash equivalents | (2 570) | (29 109) | (21 699) |
| Cash and cash equivalents at the beginning of the period | 154 291 | 175 990 | 175 990 |
| Cash and cash equivalents at the end of the period | 151 721 | 146 881 | 154 291 |
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 2018 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 2017. The accounting policies applied are consistent with those applied and described in the consolidated annual financial statements for 2017, 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 2018 were approved by the Board of Directors and the CEO on 22 May 2018.
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.
At the time of approval for issue of these interim condensed consolidated financial statements, some new standards, amendments to standards and interpretations have been published, but are not yet effective and have not been applied in preparing these consolidated financial statements. Those that may be relevant for the group are described in note 2 to the annual consolidated financial statements for 2017.
IFRS 15 Revenue from contracts with customers is effective for annual reporting periods beginning from 1 January 2018. among the leading suppliers of consultancy and design services in Norway and the Nordic region. The group has subsidiaries outside the Nordic region in Poland, UK and Singapore.
Multiconsult has established that the vast majority of contracts in terms of transaction price are time-based, i.e. the company earns revenue per hour worked. There are some contracts which are time-based with a cap, or fixed price, but these are immateril compared to total revenue. Current revenue recognition is based on work performed, similar to "over-time" revenue recognition in IFRS 15. Multiconsult has evaluated that for some of its services, for example construction management and co-ordination, the customer simultaneously receives and consumes the benefits provided and therefore revenues is recognised over time. Other services are to a large extent tailored to customer requirements and have no alternative use for Multiconsult.
The group's assessment is that implementation of IFRS 15 has no significant effect on revenue recognition for the group. This is primarily due to the fact that the contracts as a main rule establish right to payment for performance to date. The entity's performance does not create an asset with an alternative use to the entity, and in some contracts the customer simultaneously receives and consumes the benefits provided by its performance. Refer to note 2A to the consolidated annual financial statements for 2017 for further information about the company's assessements related to implementation of IFRS 15.
Work in progress (WIP) is related to worked performed but not billed at the reporting date. Project liabilities are related to prepayments from customer. Trade payable and Other current liabilities are restated for the comparative periods.
| Amounts in TNOK | Q1 2017 | FY 2017 |
|---|---|---|
| Trade payable | 129 403 | 165 534 |
| Restatement | 14 982 | 25 348 |
| Restated trade payable | 114 421 | 140 186 |
| Other current liabilities | 345 960 | 413 436 |
| Restatement | 63 404 | 72 523 |
| Restated other current liabilities | 282 556 | 340 913 |
| Total restated to prepayment | 78 387 | 97 871 |
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 2017 (see especially note 2).
Refer to note 5 to the consolidated annual financial statements for 2017 for more information on the segments. The group has three geographical reporting segments as well as a segment for LINK arkitektur. Revenues and expenses are reported in the
segment with reference to where the employee is employed. The cost of administrative services, rent of premises, depreciation and so forth is allocated to the segments.
| External revenues 479 258 298 024 67 473 172 166 5 058 - Internal revenues 7 007 - 7 198 6 090 384 (20 678) Total operating revenues 486 265 298 024 74 670 178 255 5 442 (20 678) Net operating revenues 393 011 279 290 51 101 141 677 (5 990) - Operating expenses 377 598 259 774 45 183 127 013 1 074 - EBITDA 15 413 19 516 5 918 14 664 (7 064) - Depreciation, amortisation, impairment 3 830 5 725 549 1 842 392 - EBIT 11 584 13 791 5 368 12 822 (7 456) - Associates and joint ventures 152 - - - - - |
Amounts in TNOK | Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|---|
| 1 021 979 | ||||||||
| - | ||||||||
| 1 021 979 | ||||||||
| 859 089 | ||||||||
| 810 642 | ||||||||
| 48 447 | ||||||||
| 12 338 | ||||||||
| 36 109 | ||||||||
| 152 | ||||||||
| Receivables 1) 522 983 310 233 85 109 196 625 2 171 (30 018) |
1 087 103 | |||||||
| Number of employees 1 172 842 241 477 129 - |
2 861 |
1) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
| Amounts in TNOK | Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|
| External revenues | 411 289 | 297 199 | 44 696 | 140 757 | (1 316) | - | 892 624 |
| Internal revenues | 3 832 | - | 11 379 | 3 836 | 1 122 | (20 169) | - |
| Total operating revenues | 415 121 | 297 199 | 56 075 | 144 593 | (195) | (20 169) | 892 624 |
| Net operating revenues | 350 611 | 281 853 | 46 503 | 121 716 | (947) | - | 799 736 |
| Operating expenses | 294 862 | 253 697 | 32 921 | 112 252 | 488 | - | 694 219 |
| EBITDA | 55 750 | 28 156 | 13 582 | 9 464 | (1 434) | - | 105 518 |
| Depreciation, amortisation, impairment | 3 639 | 5 765 | 473 | 1 187 | 17 | - | 11 081 |
| EBIT | 52 111 | 22 391 | 13 109 | 8 277 | (1 452) | - | 94 437 |
| Associates and joint ventures | 64 | - | 425 | - | - | - | 489 |
| Receivables 1) | 360 237 | 256 489 | 77 713 | 162 717 | 1 841 | (13 212) | 845 784 |
| Number of employees | 898 | 807 | 208 | 431 | 127 | - | 2 471 |
1) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
| Amounts in TNOK | Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|
| External revenues | 1 544 298 | 1 102 266 | 188 113 | 553 720 | (12 997) | - 3 375 399 | |
| Internal revenues | 76 551 | 30 420 | 37 720 | 33 773 | 4 377 | (182 842) | - |
| Total operating revenues | 1 620 848 | 1 132 686 | 225 834 | 587 493 | (8 620) | (182 842) 3 375 399 | |
| Net operating revenues | 1 306 957 | 1 027 303 | 177 753 | 488 829 | (23 200) | - | 2 977 642 |
| Operating expenses | 1 226 319 | 990 216 | 158 438 | 457 771 | (19 845) | - | 2 812 898 |
| EBITDA | 80 638 | 37 087 | 19 315 | 31 058 | (3 354) | - | 164 744 |
| Depreciation, amortisation, impairment | 16 044 | 24 085 | 2 038 | 5 591 | (967) | - | 46 791 |
| EBIT | 64 594 | 13 002 | 17 278 | 25 467 | (2 387) | - | 117 953 |
| Associates and joint ventures | 1 951 | - | (1 055) | 261 | - | - | 1 157 |
| Receivables 1) | 497 035 | 248 558 | 90 870 | 206 312 | 5 025 | (78 478) | 969 322 |
| Number of employees | 1 179 | 841 | 216 | 475 | 140 | - | 2 851 |
1) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
An adjustment to the business area definitions was implemented from 1 January 2017 in response to recent market developments. The new business areas and the respective operating revenues
for the first quarter 2018 and full year 2017 are presented in the table below.
| Q1 2018 | Full year 2017 |
|---|---|
| 474 317 | 1 512 696 |
| 54 708 | 204 313 |
| 26 620 | 106 801 |
| 124 616 | 433 116 |
| 227 389 | 782 615 |
| 72 010 | 233 044 |
| 42 318 | 102 814 |
| 1 021 979 | 3 375 399 |
Buildings & Properties include advisory and engineering at all stages of a construction project for all types of buildings. The business area provides services such as demand- and feasibility studies, sketch pre-project, detailed design and follow-up during the construction period, and real estate consultancy. The focus is on sustainable and long-term solutions. LINK arkitektur is included.
Cities & Society includes complex early-stage planning in urban areas. Mobility, infrastructure, area solutions and real estate development are core markets. The focus is on creating innovative solutions and contribute to building attractive cities of the future.
Industry offers complete, interdisciplinary advisory and engineering services in all project phases. Services include investigations, project development, project management, design and procurement, construction with all technical systems, construction management and follow-up, and commissioning.
Oil & Gas provides services throughout the whole value chain, from early phase studies through FEED (Front End Engineering Design) to detailed engineering and delivery for both onshore and offshore projects. Services provided onshore are within terminal and production facilities, facilities and constructions, harbour and marine constructions, underground warehouses, land-based pipelines and landfills, and electrical substations. Services provided offshore are within oil and gas rigs and platforms, concrete marine constructions, modules and structures for rigs and platforms, seabed installations, arctic climate technology for floating and subsea constructions, and noise and vibration measurement amongst others.
Renewable Energy covers the entire project life cycle in hydropower, transmission and distribution, land-based wind power andsolar energy. Services provided are from start-up and preliminary studies to detailed design and construction management, commissioning and operational shutdown.
Transportation largely comprises advisory services for planning safe and forward-looking transport systems. The business area covers road, rail, airport, harbor and channel transport systems.
Water & Environment includes services in all phases of the lifetime of a project including inspections, engineering, operation and maintenance, and remediation and demolition. Focus is placed on sustainable development of the environment through advisory services related to Greenhouse gas emissions, flood and mud slide protection, water and drains, blue-green structures and issues related to pollution of air, water and soil.
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 none significant events or transactions in the first quarter 2018.
See note 22 to the consolidated financial statements for 2017 for a description of related parties and related parties transactions in 2017.
Among the Company's shareholders Stiftelsen Multiconsult (the Multiconsult Foundation) is considered to be a related party according to IFRS due to its ownership and influence. The Foundation had a shareholding of 19.8% at 31 December 2017 and 19.8% at 31 March 2018.
Multiconsult ASA has a share purchase programme for all its employees. Through the share purchase programme the company offers its employees shares in Multiconsult ASA with a discount of 20%. Shares purchased through the programme are subject to a two-year lock-up period.
The board of directors implemented a variable performance based bonus scheme for the group management effective from 2016. As stated in note 8 in the 2017 annual report, if defined
targets are met, a part of the earned bonus will be paid in 2018 in the form of shares with a discount of 30% and a three year lock-in period. There is a maximum equivalent to four months' salary for the CEO and two months' salary for the other members of group management.
The stock of treasury shares reduced equity by NOK 4 thousand at 31 March 2018, equvivalent to the purchase price of the shares.
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 2018 | Q1 2017 | FY 2017 | |
|---|---|---|---|
| Profit for the period (in TNOK) | 25 274 | 72 064 | 79 534 |
| Average no shares | 26 970 338 | 26 247 202 | 26 407 850 |
| Earnings per share (NOK) | 0.94 | 2.75 | 3.01 |
For a description of the corporate pension schemes see note 11 to the consolidated financial statements for 2017.
Multiconsult ASA and Multiconsult Norge AS has a defined contribution pension plan that covers all the employees in the two companies. Other defined benefit pension plans in the group still exist for three employees in LINK arkitektur AS and two individual agreement in Multiconsult Norge AS.
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.
| NOK 31 March |
NOK 31 March |
NOK 31 Dec |
Local currency 31 March |
Local currency 31 March |
Local currency 31 Dec |
Local | |
|---|---|---|---|---|---|---|---|
| Amounts in TNOK | 2018 | 2017 | 2017 | 2018 | 2017 | 2017 | currency |
| Multiconsult ASA | 216 438 | 146 867 | 215 000 | 216 438 | 146 867 | 215 000 | NOK |
| Multiconsult Norge AS | 185 706 | - | 70 938 | 185 706 | - | 70 938 | NOK |
| Multiconsult UK | - | 5 359 | - | - | 500 | - | GBP |
| Multiconsult Polska | 399 | 419 | - | 197 | 193 | - | PLN |
| LINK arkitektur AB | 1 439 | 1 382 | - | 1 534 | 1 437 | - | SEK |
| aarhus arkitekterne | 2 778 | 2 683 | 2 838 | 2 147 | 2 177 | 2 279 | DKK |
| Total | 406 761 | 156 710 | 288 776 | - | - | - |
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 (currency swaps) were recorded with an unrealised loss (liability) of NOK 1.5 million at 31 March 2018 (NOK 1.5 million at 31 December 2017).
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 2018 | Q1 2017 | YTD 2017 |
|---|---|---|---|
| Net operating revenues | 859.1 | 799.7 | 2 977.6 |
| Estimated calender effect 1) | 68.9 | - | - |
| Adjusted net operating revenues | 928.0 | 799.7 | 2 977.6 |
| Reported employee benefit expenses | 663.4 | 568.3 | 2 319.8 |
| Reported other operating expenses | 147.2 | 125.9 | 493.1 |
| Operating expenses | 810.6 | 694.2 | 2 812.9 |
| Adjusted EBITDA | 117.3 | 105.5 | 164.7 |
| Depreciation. amortisation and impairments | 12.3 | 11.1 | 46.8 |
| Adjusted EBIT | 105.0 | 94.4 | 118.0 |
| Adjusted EBITDA margin (%) | 12.6% | 13.2% | 8.2% |
| Adjusted EBIT margin (%) | 11.3% | 11.8% | 6.2% |
1) Figures show effect on earnings from the corresponding period previous year arising from changes in available working days
| Amounts in MNOK | Q1 2018 | Q1 2017 | YTD 2017 |
|---|---|---|---|
| Non-current interest bearing liabilities | 196.7 | 100.9 | 195.2 |
| Current interest bearing liabilities | 210.1 | 55.8 | 93.6 |
| Cash and cash equivalents | 151.7 | 146.9 | 154.3 |
| Net interest bearing debt (asset) | 255.0 | 9.8 | 134.5 |
| Amounts in MNOK | Q1 2018 | Q1 2017 | YTD 2017 |
|---|---|---|---|
| Equity | 595.7 | 582.6 | 582.1 |
| Total assets | 1 957.9 | 1 519.1 | 1 811.1 |
| Equity ratio | 30.4% | 38.4% | 32.1% |
Nedre Skøyen vei 2, 0276 Oslo P O Box 265 Skøyen, 0213 Oslo Telephone 21 58 50 00 Fax 21 58 50 01
[email protected] www.multiconsult.no Org no 910 253 158
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