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Bouvet

Earnings Release Feb 16, 2018

3563_rns_2018-02-16_9910ec5b-04b9-4962-adbc-306bf2283079.pdf

Earnings Release

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Key figures

NOK MILLION OCT-DEC 2017 OCT-DEC 2016 CHANGE % JAN-DEC 2017 JAN-DEC 2016 CHANGE %
Revenue 458.4 382.3 19.9 % 1 607.4 1 330.8 20.8 %
Operating profit (EBIT) 49.1 32.9 49.2 % 144.1 106.3 35.6 %
Ordinary profit before tax 49.8 33.2 50.1 % 145.9 106.0 37.6 %
Profit for the period 39.7 26.3 50.8 % 112.0 79.9 40.2 %
Net cash flow operations 158.6 118.4 33.9 % 149.0 113.5 31.4 %
Cash and cash equivalents 205.4 161.7 27.0 % 205.4 161.7 27.0 %
Number of employees (end of period) 1 215 1 090 11.5 % 1 215 1 090 11.5 %
Number of employees (average) 1 221 1 087 12.3 % 1 171 1 050 11.5 %
Earnings per share 3.86 2.57 50.3 % 10.92 7.76 40.8 %
Diluted earnings per share 3.82 2.54 50.6 % 10.79 7.66 41.0 %
EBIT-margin 10.7 % 8.6 % 9.0 % 8.0 %
Equity ratio 34.2 % 32.9 % 34.2 % 32.9 %

Bouvet in brief

Bouvet is a consultancy delivering digital services. At 31 December, it had 1 215 employees at 14 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.

Bouvet ASA Highlights of the fourth quarter

Two important long-term agreements with Statoil were
extended by up to six and 10 years respectively
Important frame agreement with the Norwegian Directorate
of Immigration
Vinmonopolet named Norway's best webshop by Bearingpoint
Operating revenues up by 19.9 per cent from the fourth quarter
of 2016 to NOK 458.4 million
Operating profit (EBIT) up by 49.2 per cent to NOK 49.1 million
from the same period of the year before
Cash flow from operations came to NOK 158.6 million,
compared with NOK 118.4 million in the fourth quarter of 2016
Board proposes a dividend of NOK 8.50 per share for 2017
Employees up by four from 30 September and by 125 over the

Employees up by four from 30 September and by 125 over the past 12 months

CEO's comments Culture, profitability and growth

I ran into a new recruit at the coffee machine here one morning, and asked her how she had come into contact with Bouvet and why she had chosen us as her next workplace. The answer was that she had worked externally for a number of clients together with our consultants. She had seen and heard a lot of good things about our culture and professional environment, and was keen to become part of the team. Hearing such stories is positive. They confirm the success of our daily efforts to create an environment where employees thrive and develop. We continued to make fine progress during the quarter, and have never had so many "Bouveteers".

The trend towards digitalisation has major consequences for society, organisations and companies. During this quarter, we were once again able to participate in creating many new opportunities for our clients by exploiting innovative technology. We continued to help a number of local authorities in their efforts to identify the opportunities and to utilise the information they already possess. This work puts them in a position to offer their residents many new digital services.

During these three months, we also shared our knowledge with clients in such sectors as transport, banking and finance, health care, energy, oil and gas, and retailing. Our advisers were involved in seeking new opportunities as well as planning innovative solutions, and our project managers, designers and developers came up with and delivered good and exciting solutions.

We also won several important frame agreements which will give us many opportunities over coming years.

We are growing. Clients want to buy more of our services, and we have recruited a number of new colleagues. Our

workforce now numbers 1 215 employees. These additional recruits include both experienced and newly qualified people. They all help to reinforce our culture, continue developing the expertise in our group, and ensure our clients are even more satisfied.

All our employees worked hard during the quarter, resulting in good growth in the workforce, an increased turnover and a very good financial result.

The future looks bright for us. Our clients will continue their digitalisation work. With our range of services and our expertise, we will assist them in this development. We will maintain our work on sharing knowledge internally and externally, and our recruitment of the right people to continue our progress.

Sverre Hurum President and CEO

" We will maintain our work on sharing knowledge internally and externally, and our recruitment of the right people to continue our progress. "

Financial results

Operating revenues

Bouvet had operating revenues of NOK 458.4 million for the fourth quarter, compared with NOK 382.3 million in the same period of 2016. That represented a rise of 19.9 per cent. Fee income generated by the group's own consultants increased by NOK 58.4 million or 18.8 per cent from the fourth quarter of the year before. Fee income generated by sub-contractors rose by NOK 11.9 million or 21.4 per cent from the same period of 2016. Other revenues rose by NOK 5.8 million from the fourth quarter of the year before to NOK 21.6 million.

The fourth quarter of 2017 had one fewer working days than the same period of the year before. That had a negative effect of NOK 4.8 million on fee income generated by Bouvet's own employees.

Fee income generated by the group's own employees benefited by NOK 13.0 million from an increase of 3.2 percentage points in the billing ratio for the group's consultants compared with the fourth quarter of 2016. They were also boosted by NOK 38.9 million through a 12.3 per cent rise in the average number of employees. Rates for the group's hourly based services rose by 2.5 per cent compared with the same period of the year before, which increased fee income by NOK 8.0 million. Other factors, such as lower holiday and parental leave taken, boosted fee income by NOK 3.3 million overall. The positive effect of these factors on fee income generated by the group's own employees totalled NOK 63.2 million.

Sales to existing clients made good progress during the quarter. Clients who also used the group in the fourth quarter of 2016 accounted for 91.8 per cent of operating revenues. In addition, clients acquired since 31 December 2016 contributed a total of NOK 37.6 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 14.7 per cent in the fourth quarter, compared with 14.5 per cent in the same period of 2016.

Where the full year is concerned, operating revenues amounted to NOK 1 607.4 million compared with NOK 1 330.8 million for 2016. That represented a rise of 20.8 per cent. Fee income generated by the group's own consultants increased by NOK 209.5 million or 18.9 per cent from the year before. This primarily reflected an 11.5 per cent expansion in the average number of employees, a growth of 2.8 percentage points in the billing ratio for the group's employees, and a 2.1 per cent rise in rates for its hourly based services. In addition, operating revenues generated by sub-contractors rose by NOK 59.9 million from 2016.

Operating costs

Bouvet's operating costs, including depreciation and amortisation, were NOK 409.3 million for the fourth quarter, up from NOK 349.4 million in the same period of 2016. That represented an increase of 17.2 per cent. Payroll costs increased because the average number of employees rose by 12.3 per cent, in addition to the general growth in pay rates. The group experienced a general rise in pay of 1.1 per cent over the past 12 months. The cost of sales rose to NOK 72.7 million, compared with NOK 59.4 million for the fourth quarter of 2016, and primarily comprised procurement of sub-contractor services and software as well as the hire of course instructors. The rise in the cost of sales primarily

Number of employees (end of quarter)

related to the procurement of sub-contractor services. Other operating expenses grew by eight per cent from the same period of 2016 to NOK 42.3 million. This rise primarily reflected higher costs for renting and operating premises.

Where the full year is concerned, operating costs rose by 19.5 per cent from 2016. Higher payroll costs as a consequence of increased staffing were again the main reason for the rise in operating costs. Payroll costs rose by NOK 137.7 million or 15.3 per cent from the year before while the average number of employees was up 11.5 per cent. The cost of sales also increased for the full year, by NOK 64.3 million or 35.2 per cent, again because of the procurement of sub-contractor services. Other operating expenses rose by NOK 30.1 million or 23.2 per cent to NOK 159.7 million for the full year. This rise primarily reflected higher costs for renting and operating premises and increased social benefits. The group also experienced some increase in costs related to cloud services.

Profit

Operating profit (EBIT) for the fourth quarter came to NOK 49.1 million, compared with NOK 32.9 million in the same period of 2016. That represented an in increase of 49.2 per cent. The EBIT margin thereby rose to 10.7 per cent, compared with 8.6 per cent in the fourth quarter of the year before. Net profit came to NOK 39.7 million, compared with NOK 26.3 million in the same period of 2016. Diluted earnings per share were NOK 3.82, compared with NOK 2.54 in the fourth quarter of the year before.

Cumulative operating profit for the full year came to NOK 144.1 million, compared with NOK 106.3 million in 2016. That represented an increase of 35.6 per cent The EBIT margin was thereby nine per cent, compared with eight per cent the year before. Net profit for 2017 came to NOK 112 million, giving diluted earnings per share were NOK 10.79. That was up from the year before, when net profit was NOK 79.9 million and diluted earnings per share were NOK 7.66.

Cash flow, liquidity and capital adequacy

Consolidated cash flow from operations was NOK 158.6 million for the fourth quarter, compared with NOK 118.4 million in the same period of 2016. Cash flow for the quarter was affected positively by a reduction of NOK 18 million in current receivables from the third quarter of 2017. Current liabilities increased by NOK 94.9 million from third quarter and also had a positive effect on cash flow.

Consolidated cash flow from operations for the full year was NOK 149 million, compared with NOK 113.5 million for 2016. Cash flow for the full year was affected positively by an increase of NOK 65.3 million in current liabilities from the year before. A rise of NOK 52.6 million in working capital related to client receivables and work in progress from 2016 had a negative effect on cash flow.

The group's client portfolio consists mainly of large, solid listed companies and public enterprises. No bad debts were suffered in the fourth quarter, 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 205.4 million, compared with NOK 161.7 million a year earlier. The group had an undrawn overdraft facility of NOK 50 million at 31 December. Bouvet held 47 053 of its own shares at 31 December. Equity at 31 December totalled NOK 220.4 million, representing an equity ratio of 34.2 per cent. The corresponding figures for 31 December 2016 were an equity of NOK 176.2 million and an equity ratio of 32.9 per cent. Bouvet's long-term target is to maintain an equity ratio in excess of 30 per cent.

The board proposes that a dividend of NOK 87.1 million, corresponding to NOK 8.50 per share, be paid for 2017.

Segment reporting

The group does not report internally by business areas or segments in an accounting sense. Its business is homogenous and pursued within the Nordic market for IT consultancy services. Risk and return are followed up at departmental level within homogenous consultancy departments with shared markets, on a project basis and per consultant. This does not provide a basis for segment reporting, which is accordingly not presented. Should changes be made to the group's business, the possibility that these changes might provide a basis for segment reporting will be assessed.

Turnover public/private Turnover per business

Turnover from customer 100 % public owned: 50.5 %

Turnover from customer wholly or partially private owned: 49.5 %

Public admin 28.7 %
Oil & gas 22.9 %
Transportation 9.2 %
Power supply 8.6 %
Info and communication 6.0 %
Service industry 5.6 %
Retail 5.4 %
Industry 4.5 %
Bank & finance 4.2 %
Health 2.5 %
Other 2.5 %

Developments and market

Technology as an instrument for enhancing efficiency, developing services and solving social problems led to a high level of demand for Bouvet's services and expertise during the quarter. The group's concentration on long-term client relationships confers trust and continuity. Existing clients extend assignments and employ the breadth of Bouvet's range of services. BarentsWatch selected the group to develop its overarching architecture up to 2023, and Agder Energi Nett has extended the use of key resources from Bouvet in its automated metering system (AMS) programme.

Norway is a leader for digitalisation in the public sector. Bouvet is contributing to this development, and won a number of assignments in the quarter. The Norwegian Directorate of Immigration signed a new frame agreement during the period which makes Bouvet one of three suppliers to support development of its solutions for administrative procedures. The city treasurer's department in Bergen selected the group to develop e-solutions for legal registration of property transactions. Using software robots, Bouvet will be automating sick leave reports to the Labour and Welfare Service (NAV) for the City of Bergen.

The health sector has a growing need for development and services related to user experience, for instance. Examples of clients include the Central Norwegian Regional Health Authority (Hemit), the Western Norway Regional Health Authority ICT, and the Norwegian Institute of Public Health.

Requirements for efficiency enhancements and cost savings in the oil sector are generating a growing number of assignments. New operators, such as Point Resources and Aker BP, are employing Bouvet to an ever greater extent. Statoil extended two important long-term agreements with a duration of up to 10 and six years respectively during the quarter.

Among other contracts Bouvet signed during the quarter, mention can be made of the digitalisation of customer communication and processes for Volmax, support in developing solutions for monitoring and dosing of chemicals in drainage systems for Yara Industrial, and a new frame agreement on IT consultancy services with Sparebanken Vest.

Demand for system development is high, and deliveries in this area are being integrated to a greater extent with services in artificial intelligence and machine learning. Concentration on the user and user insight, combined with expertise in data-driven development and business understanding, are success criteria for achieving gains in

commercial and public services. This has led to increased demand for Bouvet's expertise on customer and user experiences. The group is, for example, developing the concept and design for socialstyrelsen.se and contributing to the development of a register of infectious diseases for the Swedish Public Health Agency. The Norwegian police force has extended its assignment for interaction and graphic design, while the Norwegian Directorate for Education and Training has employed Bouvet on service design. Olavstoppen, the group's subsidiary in Rogaland county, has secured a number of nationally and internationally high-profile assignments and, along with Bouvet itself, ranks as the region's leading centre of expertise in developing digital solutions.

Bouvet is contributing to the digitalisation of core operations and to digital transformations which demand expertise in digitalisation, digital business development and digital leadership. The group has been chosen by Apotek1 as a proactive advisory partner and by Avinor as its strategic partner for developing the IT function. Anti Doping Norge, the Norwegian Tax Administration and Norway's State Agency for the Recovery of Fines, Damages and Costs are examples of clients who have employed Bouvet to provide strategic advice and project management.

The EU's general data protection regulation (GDPR) comes into force in May, generating increased demand for Bouvet's expertise in this field. Its Sesam product for data integration has been further developed to prepare for and implement the introduction of the GDPR. This solution attracted interest at breakfast seminars and conferences during the quarter. Generally speaking, too, interest has been good in Bouvet's breakfast seminars and courses – both open and internally in companies. During the quarter, the course department developed its programmes in line with the increased need for digital leadership in and expertise on machine learning.

Bouvet is employed by clients like Statoil R&D, Sporveien and Telia in such service areas as data science, the cloud, Big Data and the internet of things (IoT). To meet growing demand in these areas of expertise, the group established new services during the quarter.

Bouvet is experiencing increased visibility in the media, and accumulated about 70 cuttings during the quarter. These articles covered professional statements, deliveries, agreements and group information.

A culture-driven organisation and a high level of job satisfaction among employees combined with Bouvet's regional model to give organic growth during the quarter. Personnel increased by 4 from the previous three-month period. At 31 December, Bouvet had 1 215 employees – up by 125 from a year earlier.

The growing need for Bouvet's expertise by clients in all service areas has prompted continuous attention to recruitment in order to increase the group's delivery capacity and to build new expertise. The recruitment market is tough and challenging. Although the sector in general has little capacity, Bouvet is able to attract relevant candidates in all age groups and service areas. It is succeeding with its presence in higher education institutions and has recruited many new graduates who make a positive contribution through new expertise at clients and in the group's internal sharing arenas.

As a knowledge-based group, Bouvet devotes attention to expertise development and has a strong culture for professional sharing across disciplines and regions. New graduates participate in projects with senior consultants to develop them in their consultant role and to provide

professional support. Other important arenas are internal schools for continuing education and certification. Bouvet's own courses are open to its consultants.

Conducted during the quarter by the Great Place to Work, the group's employee survey yielded very good results. Ninety-two per cent of respondents stated that, all in all, Bouvet is a great place to work.

Bouvet's relevant expertise and topical projects help to enhance its visibility in the media. Deliveries from the group have formed the basis for political debates on merging local authority IT departments. Bouvet is present in the debate on the importance of including coding in the school curriculum, and contributes leading-edge expertise in various disciplines to conferences. Enthusiastic and knowledgeable consultants in Bergen have taken the initiative on the Nerd School, which aims to help increase the number of able personnel in the IT sector. This has also become an important recruitment arena for the region.

Bouvet wound up its business in Malmö during the quarter.

Risk

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 2016 (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.

Prospects

Industry sectors are in various phases of the digital transformation. Emerging technologies such as artificial intelligence (AI) and machine learning (ML), virtual reality (VR) and augmented reality (AR), sensors and robots create unpredictable competitive conditions as well as opportunities for innovation and efficiency improvements. The whole organisation is affected by this exponential development. It yields increased technological understanding across organisations and technology becomes a natural part of business development.

This will mean a continued high level of demand for technological expertise and digital leadership, as well as arenas for expertise sharing. Bouvet's range of services, culture, long-term client relations and organisational structure have proven valuable for clients. The high level of demand calls for continued recruitment in strong competition with other players in a labour market where the supply of new expertise is a limiting factor.

Bouvet is well positioned for continued growth.

Contacts

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

Declaration by the board and CEO

We hereby confirm to the best of our knowledge that the interim financial statements for the fourth quarter of 2017 and the preliminary accounts for 1 January-31 December 2017 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 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, 16 February 2018 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

Consolidated income statement

NOK 1 000 UNAUDITED
OCT-DEC 2017
UNAUDITED
OCT-DEC 2016
CHANGE CHANGE % UNAUDITED
JAN-DEC 2017
JAN-DEC 2016 CHANGE CHANGE %
Revenue 458 399 382 261 76 138 19.9 % 1 607 353 1 330 811 276 542 20.8 %
Operating expenses
Cost of sales 72 681 59 375 13 306 22.4 % 247 346 183 002 64 344 35.2 %
Personell expenses 288 824 246 672 42 152 17.1 % 1 035 043 897 355 137 688 15.3 %
Depreciation fixed assets 3 597 2 510 1 087 43.3 % 12 994 10 001 2 993 29.9 %
Amortisation intangible assets 1 881 1 617 264 16.3 % 8 149 4 588 3 561 77.6 %
Other operating expenses 42 303 39 176 3 127 8.0 % 159 684 129 567 30 117 23.2 %
Total operating expenses 409 286 349 350 59 936 17.2 % 1 463 216 1 224 513 238 703 19.5 %
Operating profit 49 113 32 911 16 202 49.2 % 144 137 106 298 37 839 35.6 %
Financial items
Interest income 305 168 137 81.5 % 1 291 1 315 -24 -1.8 %
Financial income 503 272 231 84.9 % 1 497 553 944 170.7 %
Interest expense -24 -82 58 -70.7 % -137 -265 128 -48.3 %
Finance expense -52 -69 17 -24.6 % -852 -1 852 1 000 -54.0 %
Net financial items 732 289 443 153.3 % 1 799 -249 2 048 -822.5 %
Ordinary profit before tax 49 845 33 200 16 645 50.1 % 145 936 106 049 39 887 37.6 %
Income tax expense
Tax expense on ordinary profit 10 175 6 886 3 289 47.8 % 33 914 26 164 7 750 29.6 %
Total tax expense 10 175 6 886 3 289 47.8 % 33 914 26 164 7 750 29.6 %
Profit for the period 39 670 26 314 13 356 50.8 % 112 022 79 885 32 137 40.2 %
Assigned to:
Shareholders in parent company 39 193 25 926 110 632 78 887
Non-controlling interests 477 388 1 390 998
Diluted earnings per share 3.82 2.54 1.28 50.5 % 10.79 7.66 3.14 41.0 %
Earnings per share 3.87 2.57 1.30 50.4 % 10.92 7.76 3.16 40.8 %

Consolidated statement of other income and costs

NOK 1 000 UNAUDITED
OCT-DEC 2017
UNAUDITED
OCT-DEC 2016
CHANGE CHANGE % UNAUDITED
JAN-DEC 2017
JAN-DEC 2016 CHANGE CHANGE %
Profit for the period 39 670 26 314 13 356 50.8 % 112 022 79 885 32 137 40.2 %
Items that may be reclassified through
profit or loss in subsequent periods
Currency translation differences 114 100 14 13.9 % 171 -346 517 N/A
Sum other income and costs 114 100 14 13.9 % 171 -346 517 N/A
Total comprehensive income 39 784 26 414 13 370 50.6 % 112 193 79 539 32 654 41.1 %
Assigned to:
Shareholders in parent company 39 308 26 026 110 803 78 542
Non-controlling interests 477 388 1 390 998

Consolidated balance sheet

NOK 1 000 UNAUDITED
31.12.2017
31.12.2016 CHANGE CHANGE %
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill 33 460 32 782 678 2.1 %
Other intangible assets 27 764 25 032 2 732 10.9 %
Total intangible assets 61 224 57 814 3 410 5.9 %
Fixed assets
Office equipment 16 973 13 430 3 543 26.4 %
Office machines and vehicles 3 425 3 283 142 4.3 %
IT equipment 17 755 14 949 2 806 18.8 %
Total fixed assets 38 153 31 662 6 491 20.5 %
Financial non-current assets
Other financial assets 116 11 105 954.5 %
Other long-term receivables 2 009 859 1 150 133.9 %
Total financial non-current assets 2 125 870 1 255 144.3 %
Total non-current assets 101 502 90 346 11 156 12.3 %
CURRENT ASSETS
Work in progress
84 787 97 728 -12 941 -13.2 %
Trade accounts receivable 224 645 159 133 65 512 41.2 %
Other short-term receivables 27 783 26 990 793 2.9 %
Cash and cash equivalents 205 371 161 719 43 652 27.0 %
Total current assets 542 586 445 570 97 016 21.8 %
TOTAL ASSETS 644 088 535 916 108 172 20.2 %

Consolidated balance sheet

NOK 1 000 UNAUDITED
31.12.2017
31.12.2016 CHANGE CHANGE %
EQUITY AND LIABILITIES
EQUITY
Paid-in capital
Share capital 10 250 10 250 0 0.0 %
Own shares - nominal value -47 -99 52 -52.5 %
Share premium fund 10 000 10 000 0 0.0 %
Total paid-in capital 20 203 20 151 52 0.3 %
Earned equity
Other equity 197 186 152 378 44 808 29.4 %
Total earned equity 197 186 152 378 44 808 29.4 %
Non-controlling interests 3 019 3 629 -610 -16.8 %
Total equity 220 408 176 158 44 250 25.1 %
DEBT
Long-term debt
Deferred tax 218 1 521 -1 303 -85.7 %
Other provisions for obligations 0 57 -57 -100.0 %
Total long-term debt 218 1 578 -1 360 -86.2 %
Short-term debt
Trade accounts payable 56 865 61 128 -4 263 -7.0 %
Income tax payable 31 593 21 944 9 649 44.0 %
Public duties payable 158 026 126 258 31 768 25.2 %
Other short-term debt 176 978 148 850 28 128 18.9 %
Total short-term debt 423 462 358 180 65 282 18.2 %
Total liabilities 423 680 359 758 63 922 17.8 %
TOTAL EQUITY AND LIABILITIES 644 088 535 916 108 172 20.2 %

Consolidated statement of cash flows

NOK 1 000 UNAUDITED
OCT-DEC 2017
UNAUDITED
OCT-DEC 2016
UNAUDITED
JAN-DEC 2017
JAN-DEC 2016
Cash flow from operating activities
Ordinary profit before tax 49 845 33 200 145 936 106 049
Paid tax 971 -2 766 -25 582 -27 016
(Gain)/loss on sale of fixed assets 63 1 261 -98 1 257
Ordinary depreciation 3 597 2 510 12 994 10 001
Amortisation intangible assets 1 881 1 617 8 149 4 588
Share based payments 1 661 1 472 6 449 5 826
Changes in work in progress, accounts receivable and accounts payable 24 048 29 826 -56 834 -5 720
Changes in other accruals 76 491 51 307 58 020 18 476
Net cash flow from operating activities 158 558 118 427 149 035 113 462
Cash flows from investing activities
Sale of fixed assets 16 275 971 405
Purchase of fixed assets -3 004 -14 996 -20 358 -21 696
Purchase of intangible assets -1 278 -1 915 -10 540 -9 191
Purchase of business 0 -7 343 0 -7 343
Net cash flow from investing activities -4 266 -23 980 -29 927 -37 826
Cash flows from financing activities
Purchase of own shares 0 0 -11 190 -25 095
Sales of own shares 9 484 8 436 9 484 8 436
Dividend payments 0 0 -73 750 -67 395
Net cash flow from financing activities 9 484 8 436 -75 456 -84 054
Net changes in cash and cash equivalents 163 776 102 883 43 652 -8 419
Cash and cash equivalents at the beginning of the period 41 595 58 836 161 719 170 138
Cash and cash equivalents at the end of the period 205 371 161 719 205 371 161 719

Consolidated statement of changes in equity

NOK 1 000 SHARE
CAPITAL
OWN
SHARES
SHARE
PREMIUM
TOTAL
PAID-IN
EQUITY
OTHER
EQUITY
TRANSLATION
DIFFERENCES
TOTAL
OTHER
EQUITY
NON-CON
TROLLING
INTERESTS
TOTAL
EQUITY
Equity at 01.01.2016 10 250 -31 10 000 20 219 151 295 -297 151 000 3 401 174 618
Profit for the period 0 78 887 78 887 998 79 885
Other income and costs 0 -346 -346 -346
Purchase/sale of own shares (net) -68 -68 -16 592 -16 592 -16 660
Employee share scheme 0 6 055 6 055 6 055
Dividend 0 -66 625 -66 625 -770 -67 395
Equity at 31.12.2016 10 250 -99 10 000 20 151 153 021 -643 152 378 3 629 176 158
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 (Unaudited) 10 250 -47 10 000 20 203 197 659 -472 197 186 3 019 220 408

Notes

Note 1: Accounting principles

The group made no changes to the accounting principles applied in 2017. 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 2016.

Note 2: Alternative Performance Measures

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.

Key figures Group

NOK 1 000 OCT-DEC 2017 OCT-DEC 2016 CHANGE % JAN-DEC 2017 JAN-DEC 2016 CHANGE %
INCOME STATEMENT
Operating revenue 458 399 382 261 19.9 % 1 607 353 1 330 811 20.8 %
EBITDA 54 591 37 038 47.4 % 165 280 120 887 36.7 %
Operating profit (EBIT) 49 113 32 911 49.2 % 144 137 106 298 35.6 %
Ordinary profit before tax 49 845 33 200 50.1 % 145 936 106 049 37.6 %
Profit for the period 39 670 26 314 50.8 % 112 022 79 885 40.2 %
EBITDA-margin 11.9 % 9.7 % 22.9 % 10.3 % 9.1 % 13.2 %
EBIT-margin 10.7 % 8.6 % 24.4 % 9.0 % 8.0 % 12.3 %
BALANCE SHEET
Non-current assets 101 502 90 346 12.3 % 101 502 90 346 12.3 %
Current assets 542 586 445 570 21.8 % 542 586 445 570 21.8 %
Total assets 644 088 535 916 20.2 % 644 088 535 916 20.2 %
Equity 220 408 176 158 25.1 % 220 408 176 158 25.1 %
Long-term debt 218 1 578 -86.2 % 218 1 578 -86.2 %
Short-term debt 423 462 358 180 18.2 % 423 462 358 180 18.2 %
Equity ratio 34.2 % 32.9 % 4.1 % 34.2 % 32.9 % 4.1 %
Liquidity ratio 1.28 1.24 3.0 % 1.28 1.24 3.0 %
CASH FLOW
Net cash flow operations 158 558 118 427 33.9 % 149 035 113 462 31.4 %
Net free cash flow 154 292 94 447 63.4 % 119 108 75 635 57.5 %
Net cash flow 163 776 102 883 59.2 % 43 652 -8 419 -618.5 %
Cash flow margin 34.6 % 31.0 % 11.6 % 9.3 % 8.5 % 8.8 %
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 10 144 777 10 086 202 0.6 % 10 133 943 10 171 365 -0.4 %
Weighted average diluted shares outstanding 10 252 237 10 211 599 0.4 % 10 248 708 10 304 044 -0.5 %
EBIT per share 4.78 3.22 48.7 % 14.04 10.32 36.0 %
Diluted EBIT per share 4.73 3.18 49.0 % 13.89 10.19 36.3 %
Earnings per share 3.86 2.57 50.3 % 10.92 7.76 40.8 %
Diluted earnings per share 3.82 2.54 50.6 % 10.79 7.66 41.0 %
Equity per share 21.50 17.19 25.1 % 21.50 17.19 25.1 %
Dividend per share 0.00 0.00 N/A 7.00 6.50 7.7 %
EMPLOYEES
Number of employees (year end) 1 215 1 090 11.5 % 1 215 1 090 11.5 %
Average number of employees 1 221 1 087 12.3 % 1 171 1 050 11.5 %
Operating revenue per employee 376 352 6.8 % 1 373 1 267 8.3 %
Operating cost per employee 335 321 4.3 % 1 250 1 166 7.1 %
EBIT per employee 40 30 32.9 % 123 101 21.6 %

Definitions

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

Our regions and offices

The Group has 14 offices in Norway and Sweden. Our philosophy is that competence should be utilized across the company, while projects are attached locally.

OSLO

Sørkedalsveien 8 NO-0369 Oslo Postboks 5327 Majorstuen, NO-0304 Oslo

ARENDAL Frolandsveien 6 NO-4847 Arendal Telephone: +47 23 40 60 00

BERGEN

Solheimsgaten 15 NO-5058 Bergen Telephone: +47 55 20 09 17

GRENLAND

Uniongata 18 Klosterøya NO-3732 Skien Telephone: +47 23 40 60 00 KRISTIANSAND Kjøita 25 NO-4630 Kristiansand

STAVANGER Fabrikkveien 10 NO-4033 Stavanger Telephone: +47 51 20 00 20

Telephone: +47 23 40 60 00

Strandkaien 36 NO-4005 Stavanger Telephone: +47 52 82 10 17

HAUGESUND

Diktervegen 8 NO-5538 Haugesund Telephone: +47 52 82 10 17 TRONDHEIM Kjøpmannsgata 35 NO-7011 Trondheim Telephone: +47 23 40 60 00

SANDVIKA Leif Tronstadsplass 7 NO-1337 Sandvika Telephone: +47 23 40 60 00

SANDEFJORD Klinestadmoen 9 NO-3241 Sandefjord Telephone: +47 23 40 60 00

STOCKHOLM

Östermalmsgatan 87 A SE-114 59 Stockholm Telephone: +46 (0) 771 611 100

BORLÄNGE

Forskargatan 3 SE-781 70 Borlänge Telephone: +46 (0) 771 611 100

ÖREBRO

Storgatan 3 SE-70361 Örebro Telephone: +46 (0) 709 431 411

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