FOURTH QUARTER 2017 RESULTS
Christian Nørgaard Madsen, CEO | Anne Harris, CFO
DISCLAIMER
This presentation 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 presentation, 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 presentation.
INTRODUCTION AND HIGHLIGHTS
Christian Nørgaard Madsen, CEO
Highlights
- Marginally negative EBIT in fourth quarter due to challenging project execution
- Earnings positively impacted by improved results from LINK arkitektur
- Fourth quarter and full year revenue growth, driven by acquisitions
- Comprehensive integration and onboarding of Hjellnes group on track
- Stable order backlog at NOK 2.1 billion
- Profitability improvement program launched
- Proposed dividend for 2017 of NOK 1.50 per share
Financial summary 4Q and FY 2017
• 4Q 2017
- Net operating revenues up 21.1% y-o-y to NOK 830.2 million
- EBIT of NOK 2.7 million
• FY 2017
- Net operating revenues up 14.3% y-o-y to NOK 2 977.6 million
- Organic growth 4.0%
- Driven by acquisitions and net recruitment
- Impacted by a lower billing ratio and one less working day compared to last year
- EBIT of NOK 118 million, 4.0% margin
- Impacted by increased manning expenses, ERP, M&A and integration
Summary of acquisitions in 2017
| Company |
Employees |
Geography |
Hjellnes
group |
250 |
Oslo |
Iterio
AB |
75 |
Stockholm |
Bomek
Consulting AS |
12 |
Bodø |
Prosjektforum
AS |
11 |
Sarpsborg |
Rambøll
Ålesund |
9 |
Ålesund |
| VVSPLAN AS |
3 |
Mo i
Rana |
|
|
|
Key ongoing projects 4Q 2017
• Campus Ås
• InterCity Fredrikstad - Sarpsborg
• New Airbase Ørland
• Tønsberg Hospital
• The Follo Line
Order intake 4Q 2017
Highlights
- Order intake NOK 1 026.9 million, up 8.4 % y-o-y
- Continued strong tender pipeline
Key order intake
- Northern Lights CCS
- Drammen Hospital
- InterCity Fredrikstad Sarpsborg
- Campus Ås
- The Follo Line
Order backlog development and backlog per business area
Organisation
- Integration and onboarding of the Hjellnes group on track
- Stable organisation group employee turnover at 6.0 % (6.4%)
- Share purchase programme for employees - 23 % of employees participated in the programme
- New regional director of Mid-Norway business unit Jan Anders Syltern
- Merger of South and South-West business units in Norway
- - Strengthen operations and management
- - Improve efficiency, marketing and sales efforts in Rogaland and Agder
- New business unit Energy established with acting EVP Dr. Jörgen Hasselström
- - Ensuring achievement of 3-2-1 strategy ambitions
- - Focusing on growth in renewable energy internationally
FINANCIAL REVIEW
Anne Harris, CFO
Financial highlights 4Q 2017
Financial highlights FY 2017
- Net operating revenue up 14.4 % to NOK 2 977.6 million
- ‒ Organic growth 4.0%
- ‒ Billing ratio at 68.4%
- ‒ 1 less working day calendar effect
• Operating expenses
- Higher employee benefit expenses due to M&A
- ERP system, M&A and integration
- EBIT of NOK 118.0, margin of 4.0%
EBIT Bridge Y-O-Y
Segments FY 2017
Greater
Oslo Area |
FY 2017 |
FY 2016 |
Change |
| EBIT MNOK |
64.6 |
125.1 |
48 % |
| EBIT margin % |
4.9 % |
10.5 % |
5.6 pp |
Billing
ratio |
67.0 % |
70.0 % |
3
pp |
| Number of employees |
1 179 |
879 |
34 % |
| International |
FY 2017 |
FY 2016 |
Change |
| EBIT MNOK |
17.3 |
11.1 |
55 % |
| EBIT margin % |
9.7 % |
11.5 % |
1.8 pp |
Billing
ratio |
71.5 % |
65.6 % |
5.9 pp |
| Number of employees |
216 |
130 |
66 % |
| Regions Norway |
FY 2017 |
FY 2016 |
Change |
| EBIT MNOK |
13.0 |
37.3 |
65 % |
| EBIT margin % |
1.3 % |
3.9 % |
2.6
pp |
Billing
ratio |
67.3 % |
68.4 % |
1.1 pp |
| Number of employees |
841 |
793 |
6 % |
LINK
arkitektur |
FY 2017 |
FY 2016 |
Change |
| EBIT MNOK |
25.5 |
9.9 |
>100 % |
| EBIT margin % |
5.2 % |
2.9 % |
2.3 pp |
Billing
ratio |
72.4 % |
71.4 % |
1.0 pp |
| Number of employees |
475 |
420 |
13 % |
Operating revenues by business area FY 2017
Cash flows FY 2017
- Solid cash flow from operations
- Change in working capital driven by
- Increased trade receivables due to increased production
- Investments
- Acquisition of Iterio AB and the Hjellnes group
- Ordinary asset replacement
- Financing
- Increased debt due to acquisitions
- Dividend payment
Performance compared to strategic ambitions
- aarhus arkitekterne, Iterio, Hjellnes group have contributed significantly
- Fairly positive market outlook
Maintaining good profitability
- Our profitability is not satisfactory
- Billing rates are still under pressure
- Billing ratio is not meeting target
Revenue growth International expansion
• We are according to plan both in Sweden and in Renewable Energy, however the major transactions are still ahead
One Multiconsult (One group)
- Significant progress in integrating the new companies into the Multiconsult group
- Need to work continuously on building a common culture
Profitability has been challenging
Group target: 2018 EBIT margin to minimum 6%
Improving operations for Greater Oslo & Regions Norway
Improving EBIT margin towards 2020
- Acquisitions of new business not highly integrated
- Further increase in billing rates
- Benefits from a significantly better strategic position in Norway
Outlook
- Outlook remains fairly positive
- Continued strong competition and price pressure on large projects
- Market rates have increased in Norway, regional variation
- Increased employee cost in Norway not fully reflected in billing rates
- Stronger combination of professional capability and stable order backlog
- Active and systematic implementation of the 3-2-1 GO strategy
- Growth focus on Sweden and Renewable Energy
- Consolidation and integration of the Hjellnes group in Norway
- Intensified focus on improving profitability
- Profitability program initiated
FINANCIAL CALENDAR
| Annual report 2017 |
12 Apr 2018 |
Annual
General
Meeting |
3
May 2018 |
| 1Q 2018 results: |
23 May
2018 |
| 2Q 2018 results |
23
Aug 2018 |
| 3Q 2018 results |
8 Nov 2018 |
multiconsult.no
Q&A
FOURTH QUARTER 2017 RESULTS | Christian Nørgaard Madsen, CEO Anne Harris, CFO