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Norva24 Group
Annual Report • Feb 23, 2024
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Annual Report
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Revenue and profit growth continues
October-December 2023
- Total operating revenue amounted to NOK 855.7 million (719.5), an increase of 18.9%. Currency adjusted organic growth was 5.2%.
- Revenue from customer contracts amounted to NOK 854.4 million (712.6), an increase of 19.9%.
- EBIT amounted to NOK 60.0 million (35.3).
- The period was charged with non-recurring items amounting to NOK 7.2 million (25.8).
- Adjusted EBITA amounted to NOK 81.6 million (71.0), up 14.9%.
- Profit for the period was NOK 66.9 million (13.3), up 403.0%.
- Cash flow from operating activities totaled NOK 244.5 million (143.3).
- Basic/Diluted earnings per share amounted to NOK 0.37 (0.07).
January-December 2023
- Total operating revenue amounted to NOK 3,151.9 million (2,466.5), an increase of 27.8%. Currency adjusted organic growth was 6.3%.
- Revenue from customer contracts amounted to NOK 3,131.9 million (2,445.3), an increase of 28.1%.
- EBIT amounted to NOK 283.9 million (211.7).
- The period was charged with non-recurring items amounting to NOK 14.9 million (32.5).
- Adjusted EBITA amounted to NOK 347.7 million (278.6), up 24.8%.
- Profit for the period was NOK 226.6 million (139.5), up 62.4%.
- Cash flow from operating activities totaled NOK 553.9 million (343.3).
- Basic/Diluted earnings per share amounted to NOK 1.24 (0.76).
Significant events during the January-December 2023 period
- During the year Norva24 acquired Gravco AS and Septik Tank Co AS in Norway, Tom's Kloakservice Aps in Denmark and ControTech i Malmö AB in Sweden. Through these acquisitions the Group has added approximately NOK 150 million in yearly revenues.
- Mikael Smedborn assumed the position as new CEO of Sweden from April 1, 2023.
- Henrik Norrbom took on the role as Group CEO from September 18, 2023.
Significant events after the reporting period
- Stein Yndestad has been appointed Group CFO. This is a role Yndestad held from 2017 to Q1 2023.
- Norva24 acquired in January 2024 Baier Rohrreinigung GmbH in Germany and in February 2024 the UIM operations of Svein Klungtveit AS in Norway in a carve-out transaction. Through these acquisitions the Group has added approximately NOK 65 million of yearly revenues.
| FINANCIAL OVERVIEW | |||||||
|---|---|---|---|---|---|---|---|
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | ||||
| NOK million | 2023 | 2022 | 2023 | 2022 | |||
| Total operating revenue | 855.7 | 719.5 | 3,151.9 | 2,466.5 | |||
| Growth – total revenue, % | 18.9 | 22.2 | 27.8 | 21.8 | |||
| Adjusted EBITA | 81.6 | 71.0 | 347.7 | 278.6 | |||
| Adjusted EBITA margin, % | 9.5 | 9.9 | 11.0 | 11.3 | |||
| Adjusted EBITA growth, % | 14.9 | –13.4 | 24.8 | 8.1 | |||
| EBIT | 60.0 | 35.3 | 283.9 | 211.7 | |||
| Cash flows from operating activities | 244.5 | 143.3 | 553.9 | 343.3 | |||
| Cash conversion, % | 152.8 | 104.3 | 86.9 | 66.0 | |||
| Net debt (at period end) | 1,250.2 | 1,074.1 | 1,250.2 | 1,074.1 | |||
| Net debt (at period end)/LTM adjusted EBITDA | 2.0 | 2.1 | 2.0 | 2.1 | |||
| Earnings per share (basic and diluted), NOK | 0.37 | 0.07 | 1.24 | 0.76 |
This is information that Norva24 Group is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out on page 33. This interim report has not been reviewed by the Company's auditors.
The leading European operator in the fragmented UIM service sector
As I reflect on my first full quarter with the company, I am greatly encouraged by the powerful mega-trends fueling UIM (underground infrastructure maintenance) market growth. We are maintaining an aging sewerage infrastructure, that on average exceeds 40 years of age across the four Norva24 markets. As aging pipes require more service and maintenance compared to newer ones, the need for UIM services continues to increase. Furthermore, climate change, more extreme weather, population growth and urbanization are putting the underground infrastructure under more pressure. These drivers are expected to keep the industry significantly outgrowing the general economy.
The markets where Norva24 operate are massive. The total addressable market was around NOK 40 billion in current geographies and more than NOK 140 billion for Europe in total in 2020. This, combined with the robust growth and the low cyclicality, gives reason to be optimistic about the future of Norva24.
Norva24's leading position in Northern Europe entails competitive advantages from economies of scale, as high density
"We are comfortable with our financial position providing us with significant headroom to enable continued strong M&A pace."
enables better and quicker services to our customers and a superior cost position due to higher utilization. In Norway, Norva24 has an approximate market share of 30%, while in Sweden and Denmark it is around 10%. In the largest of our current markets, Germany, our revenues of NOK 1.2bn represents only a market share of 3 to 4%, so there is ample room for growth through further consolidation of the UIM market in Germany.
Climate change plays a key role in the growth and development of Norva24. We are witnessing increasingly unusual weather patterns both globally and within our markets. Last summer, Norway and Sweden faced 50-year flood levels in certain regions, which led to additional work, and, more importantly, an increased attention to the severe underinvestment in the underground infrastructure. We expect this to lead to increased activity in the UIM industry.
During 2023, the uncertainty surrounding the broader economic development has implications across various industries. The demand for UIM services, however, is to a large extent unaffected by such impacts, and in 2023, Norva24 grew by 22% with currency adjusted organic growth of 6%. In Q4, the growth was 19% and the currency adjusted organic growth was 5%. Our adjusted EBITA margin was slightly lower in Q4 than in the corresponding quarter in 2022, significantly curbed by exceptional weather conditions in the most important regions in Norway and Sweden. Normally Q1 (always winter and always unfavorable conditions) and Q3 (no snow and favorable conditions) are quarters where the weather impact is similar each year, whereas Q2 is impacted by timing of spring, and Q4 is impacted by timing of winter and potential heavy snowfall, effects that differ from year to year and impact comparability of Q2 and Q4 versus the corresponding period the previous year. While the profitability in both October and November 2023 was above the 2022 levels in all markets, the profitability in December was significantly below 2022. December's weather was notably atypical, exemplified by conditions in Oslo: the month of December in 2023 experienced much colder temperatures, averaging –4.6°C compared to the –0.4°C average of the previous ten years. Furthermore, snow levels in December 2023 averaged 11 cm, almost four times the snow levels during the ten preceding years when it was on average 3 cm. This materialized with extreme snow dumps during very short time periods, paralyzing the areas for some time. Such events occurred both in the south of Norway and Sweden.
Accounting for the severe weather impact in December, we remain on a positive trajectory regarding operating margins from Q3, persistently concentrating on price optimization and improved utilization.
The long-term outlook of the UIM industry has not changed, particularly since severe winter conditions are becoming less frequent, and we firmly believe that we operate within a market that is experiencing growth surpassing that of the general economy.
Despite the margin development in Q4 2023 compared to last year, the long-term trend is that operations that have been part of Norva24 for some time see improved margins. Looking at the
portfolio of companies that constituted Norva24 at the end of 2019 (72% of group in 2021) we see a margin improvement of 300 basis points from 2021 to 2023. This underlines the improvements seen as companies get into the operational structure of Norva24. On the revenue side we see the positive effects of cross-selling, improved tender processes, enhanced service offering to regional and national customers as well as improved local density. On the cost side there are benefits from coordinated procurement, shared IT solutions and best practice sharing amongst others.
In Q4 2023, Norva24 achieved a total revenue growth of 19%. Currency adjusted organic growth was 5%. The adjusted EBITA was NOK 82 million, an increase of 15% from NOK 71 million last year. This growth was observed across all markets, with Denmark recording the most significant rise. Norway and Germany had an adjusted EBITA margin reduction in the quarter, whereNorway delivered an adjusted EBITA margin of 8% and Germany delivered an adjusted EBITA margin of 14% in the quarter. Sweden had an increase of 70 basis points in the quarter while Denmark continued the improvement from last quarters and improved margins by 530 basis points. Throughout the second half of the quarter, cold weather and heavy snow adversely affected most of our operations, leading to reduced efficiency and decreased customer activity. This impact was most pronounced in December and particularly noticeable in Norway.
The strength of Norva24's business model is the ability to efficiently convert profits into cash flows. With an operating cash flow of NOK 245 million in the fourth quarter, up 71%, the year-onyear cash conversion of the quarter was up by 50 percentage points to 153%. The operating cash flow for the year also shows a strong cash conversion of 87%. The operating cash flow is significantly stronger in the second half of the year due to the seasonality of our business. Despite the solid cash conversion, the group's net working capital is higher than it should be, and we are working actively to improve the capital tied up in operations during the coming year.
We are comfortable with our financial position, excellent cash flow and a leverage just below 2.0x LTM adjusted EBITDA at the end of Q4. During the last 12 months we have had cash flow from operating activities amounting to NOK 554 million. This is providing us with significant headroom in relation to our financial covenants in the financing facility. In addition to our current cash balance of NOK 267 million, we currently have NOK 500 million available in the credit facility to enable continued strong M&A pace going forward.
We have a solid M&A pipeline and during 2023 four new entities were acquired and consolidated. They represent around NOK 150 million of yearly revenues and have healthy profit margins.
The target group of companies in the pipeline are well-run and profitable medium-sized operations with a strong local presence and brand name.
Henrik Norrbom Group CEO
Financial overview for the Group
Total operating revenue (Oct-Dec)
Total operating revenue amounted to NOK 855.7 million (719.5), an increase of 18.9%. Currency adjusted organic growth was good in October and November, while December showed negative growth resulting in a modest quarterly currency adjusted organic growth of 5.2%. Acquisition growth was 5.8% in the quarter, driven by the acquisitions in Norway, Denmark and Sweden.
| % | Oct-Dec 2023 |
Oct-Dec 2022 |
|---|---|---|
| Growth – total operating revenue | 18.9 | 22.2 |
| Organic growth | 13.2 | 5.7 |
| Organic growth – currency adj. | 5.2 | 5.1 |
| Acquisition growth | 5.8 | 16.5 |
Total operating revenue (Jan-Dec)
Total operating revenue amounted to NOK 3,151.9 million (2,466.5), an increase of 27.8%. Currency adjusted organic growth was 6.3%. The growth was driven by the activity levels in Norway, Denmark and Germany combined with price adjustments. Acquisition growth was 14.1% in the period, driven by acquisitions in all markets.
| Jan-Dec | Jan-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 27.8 | 21.8 |
| Organic growth | 13.7 | 7.7 |
| Organic growth – currency adj. | 6.3 | 8.9 |
| Acquisition growth | 14.1 | 14.1 |
Total operating expenses (Oct-Dec)
Total operating expenses amounted to NOK 703.0 million (608.0). The increase was driven by a higher cost base due to the acquisition in Norway and Sweden. Operational service expenses increased mainly due to an acquisition in Germany in September 2022 with a higher usage of subcontractors and material cost. Corporate cost increased from NOK 9.6 million in 2022 to NOK 14.5 million in 2023.
Total operating expenses (Jan-Dec)
Total operating expenses amounted to NOK 2,529.2 million (1,979.0). The increase was driven by a higher cost base due to acquisitions in all markets, as well as a relative increase in Operational service expenses. The relative increase was mainly due to acquisitions in all segments during the year, with a higher usage of subcontractors and material costs than the Group average. Corporate costs increased from NOK 43.9 million to NOK 61.7 million mainly due to M&A-related costs, recruitment costs and costs related to key IT projects.
Adjusted EBITA (Oct-Dec)
Adjusted EBITA increased to NOK 81.6 million (71.0), with an EBITA margin of 9.5 % (9.9), a decrease of 0.4 percentage points. The margin reduction is due to reduced activity and efficiency levels in December in most branches and markets.
Adjusted EBITA (Jan-Dec)
The increase in adjusted EBITA to NOK 347.7 million (278.6) resulted in an adjusted EBITA margin of 11.0% (11.3). The decrease in adjusted EBITA margin is mainly attributable to increased costs in the Group.
Depreciation, amortization and impairment (Jan-Dec)
Total depreciation for the period amounted to NOK 289.9 million (241.4). The increase was primarily due to additions of purchased and leased vehicles during the year. Total depreciation as a share of operating revenues was reduced from 9.8% in 2022 to 9.2% in 2023. Amortizations during the period amounted to NOK 49.0 million (34.3).
EBIT (Jan-Dec)
EBIT amounted to NOK 283.9 million (211.7). The increase in EBIT was mainly attributable to the performance in all segments, and contribution from the newly acquired companies. The non-recurring cost for the period was NOK 14.9 (32.5) million.
Financial items (Oct-Dec)
Net financial items amounted to NOK –36.6 million (–8.6) and consisted primarily of currency exchange losses as well as increased interest expenses on loans and lease liabilities. Interest expenses on loans in Q4 2023 were up compared to 2022 due to the increased debt and interest rate. Lease liabilities increased primarily due to additions of leased vehicles and increased interest rates.
Financial items (Jan-Dec)
Net financial items amounted to NOK –50.1 million (–15.5) and consisted primarily of increased interest expenses on loans and lease liabilities. Interest expenses on loans during the period were up compared to 2022 due to increased debt and higher interest rates. Lease liabilities increased due to the addition of leased vehicles and higher interest rates.
Earnings (Oct-Dec)
Profit before income tax was NOK 23.4 million (26.7). Profit for the period was NOK 66.9 million (13.3). Basic and diluted earnings per share amounted to NOK 0.37 (0.07).
Earnings (Jan-Dec)
Profit before income tax was NOK 233.7 million (196.3). Profit for the period was NOK 226.6 million (139.5). Basic and diluted earnings per share amounted to NOK 1.24 (0.76).
Cash flow and capital expenditures (Jan-Dec)
Net cash flow from operating activities varies across the year depending on the seasonality, impacted by weather and vacation periods, with a strong cash flow in the second half of the year. Net cash flow from operating activities for the period amounted to NOK 553.9 million (343.3). In the first half of 2022 the net cash flow from operating activities was impacted by cash payments related to the IPO in December 2021.
Cash flow from investing activities in the period was NOK –332.9 million (–362.5), of which payments of earn-outs from acquisitions of subsidiaries amounted to NOK –33.6 million (–49.8). Cash flow from financing activities in the period amounted to NOK –174.1 million (–25.8). Cash conversion was 86.9% during the period, compared with 66.0% for the same period last year. In the fourth quarter of 2023 the cash conversion was 152.8% (104.3).
Financial position and liquidity (December 31, 2023 compared to December 31, 2022)
Norva24's net debt amounted to NOK 1,250.2 million (1,074.1), corresponding to a net debt/LTM adjusted EBITDA of 2.0 (2.1). The increase in net debt is attributable to the acquisitions in the period in addition to a weaker NOK compared to EUR. The Group's cash and cash equivalents amounted to NOK 267.0 million (204.7) at the end of the period.
Of the NOK 1,100 million credit facility, NOK 600 million was utilized at the end of Q4.
At the end of the period, total equity amounted to NOK 2,070.6 million (1,729.2). The equity/assets ratio was 49.2% (47.9).
Net debt and leasing (December 31, 2023)
Leases are capitalized according to IFRS 16. Lease liabilities amounted to NOK 867.6 million as per December 31, 2023. NOK 286.4 million of the lease liabilities are related to properties and building and 575.7 are related to vehicles. Leasing payments for the next 12 months as of December 31, 2023, amount to NOK 226.9 million.
Depreciation of leased assets is included in total depreciation in the statement of profit or loss.
Total interest-bearing debt amounted to NOK 1,517.2 as per December 31, 2023.
Net interest-bearing debt excluding lease liabilities amounted to NOK 382.6 million as per December 31, 2023.
| BREAKDOWN OF NET DEBT (DECEMBER 31, 2023) | ||||||
|---|---|---|---|---|---|---|
| Current | Non | Total | ||||
| portion | current | debt | ||||
| 286.4 | ||||||
| 145.3 | 430.4 | 575.7 | ||||
| 3.4 | 2.0 | 5.5 | ||||
| 219.7 | 647.9 | 867.6 | ||||
| 11.3 | 638.4 | 649.6 | ||||
| 231.0 | 1,286.3 | 1,517.2 | ||||
| 267.0 | ||||||
| 1,250.2 | ||||||
| 963.8 | ||||||
| 382.6 | ||||||
| 71.0 | 215.5 |
Employees
On December 31, 2023, the total number of employees was 1,751 (1,632).
Seasonal variations
The Group is influenced by a certain amount of seasonal variation, and the first quarter has historically been the weakest, due to colder weather and vacation periods. The fourth quarter can also be affected by winter weather in certain years. Over the short term, seasonal variations are expected to remain in line with prior variations, but this may change somewhat over the long term as the Group grows in parts of Europe where the winter season has less of an impact.
Risk and uncertainty factors
Currency risks, interest risks, credit risks, liquidity risks and operational risks are the most significant risks for the Group. These risks are managed continually in the operations.
Group management monitors financial risk in accordance with the description of financial risk management in Note 21 of the 2022 Annual Report. The review in conjunction with the full year 2022 found no material changes or negative effects compared with the analysis on December 31, 2023.
When an acquisition is completed, purchase considerations, assets and liabilities are recognized at estimated fair value and amounts exceeding the value of net assets are included in goodwill. In Norva24's operation, the fair values of individual assets and liabilities are normally not readily observable in active markets. Estimation of fair values requires the use of valuation models for acquired assets and liabilities as well as ownership interests. Such valuations are subject to numerous assumptions and are thus uncertain.
The fair value of brands and customer relationships on the acquisition date is based on a value-in-use model and an allocated percentage of the consideration paid less the net assets acquired. Estimates of the useful life of acquired brands are based on management's market knowledge and marketing plans. Recognized earn-outs are based on the probability that an acquired company will achieve its financial goals.
A stable underlying need for Norva24's services is expected to persist in the markets in Northern Europe despite the uncertain geopolitical situation. Norva24 has no exposure to Ukraine or Russia. Underlying driving forces such as low renewal levels in the water and sewage systems are expected to generate demand for Norva24's services.
Norway – continued good development but a hard winter in December affects margin
The Group's Norwegian operations date back to 1919 in Sandefjord, Norway, when Norva24's oldest subsidiary was established. In 2015, Norva24 was established in its current form through a merger of five smaller Norwegian UIM companies. Since then, Norva24 has expanded and now holds a leading market position in Norway. Norway had 541 employees as of December 31, 2023.
Highlights of the quarter
The fourth quarter saw the strong performance in Q3 continue into October and November, with organic growth in double digits, while the growth in December was negative.
Late November winter hit hard with unusual cold and high snow levels in most regions. The cold weather and snowy conditions are not unusual for Norway, but normally experienced in Q1. Both 2022 and 2023 experienced harsh winters in Q4 as well.
Norway has strengthened its position in Rogaland by winning a contract with HIM IKS combined with the acquisition of the septic division of Svein Klungtveit AS in February, will lead to a new branch operating from Sand in Suldal.
Total operating revenue (Oct-Dec)
Total operating revenue amounted to NOK 271.4 million during the fourth quarter, compared with NOK 225.6 million during the same period of 2022, corresponding to a growth of 20.3% in total operating revenue. This growth was driven by organic growth of 6.7% and the acquisition of Gravco. The organic growth is the result of a broad-based improvement in activity and utilization in the Norwegian branches.
| Oct-Dec | Oct-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 20.3 | 2.3 |
| Organic growth | 6.7 | 2.3 |
| Acquisition growth | 13.6 | 0 |
Total operating revenue (Jan-Dec)
Total operating revenue amounted to NOK 1,065.7 million during the period, compared with 904.9 NOK million during the same period of 2022, corresponding to a growth of 17.8% in total operating revenue.
The total growth was driven by organic growth of 7.4% and the acquisition of Gravco generating acquisition growth of 10.4%.
| Jan-Dec | Jan-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 17.8 | 12.9 |
| Organic growth | 7.4 | 12.7 |
| Acquisition growth | 10.4 | 0.2 |
Adjusted EBITA (Oct-Dec)
Adjusted EBITA amounted to NOK 21.5 million in Q4 2023, compared with NOK 20.2 million in the same period of 2022. The adjusted EBITA margin was 7.9% (9.0%) in the fourth quarter of 2023. The margin is down due to the unfavorable weather conditions in the final part of the year.
Adjusted EBITA (Jan-Dec)
Adjusted EBITA amounted to NOK 159.1 million for the period, compared with NOK 137.5 million in the same period of 2022, an increase of 15.7%. The adjusted EBITA margin was 14.9% (15.2) during the period.
| Oct-Dec | Oct-Dec | Change, | Jan-Dec | Jan-Dec | Change, | |
|---|---|---|---|---|---|---|
| NOK million | 2023 | 2022 | % | 2023 | 2022 | % |
| Total operating revenue | 271.4 | 225.6 | 20.3 | 1,065.7 | 904.9 | 17.8 |
| EBITA | 21.5 | 19.9 | 8.2 | 157.1 | 134.2 | 17.1 |
| EBITA margin, % | 7.9 | 8.8 | –0.9 pp | 14.7 | 14.8 | –0.1 pp |
| Adjusted EBITA | 21.5 | 20.2 | 6.2 | 159.1 | 137.5 | 15.7 |
| Adjusted EBITA margin, % | 7.9 | 9.0 | –1.1 pp | 14.9 | 15.2 | –0.3 pp |
Germany – growth of 45.6% for the year
Norva24 entered Germany in 2019 through the acquisition of ExRohr. Norva24 has since grown and established a leading market position in Germany. The Group's oldest subsidiary in the country was established in Gochsheim in 1964. Germany had 724 employees as of December 31, 2023.
Highlights of the quarter
Germany grew close to 20% in Q4 compared to Q4 last year. Germany achieved solid organic growth in October and November while a challenging December reduced the organic growth of the quarter to 5.6%. The total growth in 2023 was 45.6% compared to 2022. The adjusted EBITA margin for the quarter was 14.1%, down from 16.2% last Q4. The margin dilution is partly caused by pass through billing of some larger assignments.
Total operating revenue (Oct-Dec)
Total operating revenue amounted to NOK 332.5 million during the fourth quarter, compared with NOK 278.8 million during the same period of 2022, corresponding to a growth of 19.3% in total revenue. Currency adjusted organic growth was 5.6%.
| Oct-Dec | Oct-Dec |
|---|---|
| 2023 | 2022 |
| 19.3 | 41.0 |
| 19.3 | 6.9 |
| 5.6 | 4.4 |
| 0.0 | 34.1 |
Total operating revenue (Jan-Dec)
Total operating revenue amounted to NOK 1,183.4 million during the period, compared with NOK 812.9 million during the same period of 2022, corresponding to growth of 45.6% in total revenue. This growth was attributable to the acquisitions of Zimmerbeutel, Jutzy and CKS in the second half of 2022. Currency adjusted organic growth was 7.6%.
| % | Jan-Dec 2023 |
Jan-Dec 2022 |
|---|---|---|
| Growth – total operating revenue | 45.6 | 25.8 |
| Organic growth | 21.6 | 1.1 |
| Organic growth – currency adj. | 7.6 | 1.9 |
| Acquisition growth | 24.0 | 24.6 |
Adjusted EBITA (Oct-Dec)
Adjusted EBITA amounted to NOK 46.8 million in Q4 2023 compared to NOK 45.2 million in the same period of 2022. The adjusted EBITA margin decreased from 16.2% in the preceding year to 14.1% during the quarter. Six out of seven entities in Germany improved adjusted EBITA margin vs Q3 2023.
Adjusted EBITA (Jan-Dec)
Adjusted EBITA amounted to NOK 156.0 million in the period compared to NOK 124.9 million in the same period of 2022. The adjusted EBITA margin decreased from 15.4% in the preceding year to 13.2%. The margin development is attributable to slightly weaker organic margins for the full year.
| Oct-Dec | Oct-Dec | Change, | Jan-Dec | Jan-Dec | Change, | |
|---|---|---|---|---|---|---|
| NOK million | 2023 | 2022 | % | 2023 | 2022 | % |
| Total operating revenue | 332.5 | 278.8 | 19.3 | 1,183.4 | 812.9 | 45.6 |
| EBITA | 43.4 | 20.0 | 117.4 | 152.6 | 95.5 | 59.8 |
| EBITA margin, % | 13.0 | 7.2 | 5.9 pp | 12.9 | 11.7 | 1.1 pp |
| Adjusted EBITA | 46.8 | 45.2 | 3.5 | 156.0 | 124.9 | 24.9 |
| Adjusted EBITA margin, % | 14.1 | 16.2 | –2.2 pp | 13.2 | 15.4 | –2.2 pp |
Sweden – good growth, and stable margins
Norva24 entered the Swedish market in 2017 through an acquisition in the south of the country. Since then, Norva24 has grown and secured a leading market position in Sweden. The Group's oldest subsidiary in the country was founded in 1974 in Ulricehamn. Sweden had 288 employees as of December 31, 2023.
Highlights of the quarter
The segment achieved a growth of 12.7% in the quarter. Acquisition growth was 5.6% while the organic revenues were flat. The Swedish operations had positive currency adjusted organic growth in October and November, but December had negative growth almost neutralizing the currency adjusted organic growth of the quarter. The December revenues were heavily impacted by the weather. Even in the southern parts of Sweden the weather paralyzed traffic for several days, which impacted Norva24's productivity and efficiency.
Total operating revenue (Oct-Dec)
Total operating revenue during the quarter amounted to NOK 140.0 million compared with NOK 124.2 million during the same period in 2022, corresponding to an increase of 12.7%. Currency adjusted organic growth was 0.4%.
| Oct-Dec | Oct-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 12.7 | 24.4 |
| Organic growth | 7.1 | 3.4 |
| Organic growth – currency adj. | 0.4 | 7.8 |
| Acquisition growth | 5.6 | 21.0 |
Total operating revenue (Jan-Dec)
Total operating revenue amounted to NOK 491.7 million compared with NOK 426.9 million during the same period in 2022, corresponding to an increase of 15.2%. Currency adjusted organic growth was 2.8%. The acquisitions of IRG, Stockholm Relining and ControTech explains the acquisition growth of 7.6% in the period.
| Jan-Dec | Jan-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 15.2 | 39.2 |
| Organic growth | 7.6 | 4.5 |
| Organic growth – currency adj. | 2.8 | 10.0 |
| Acquisition growth | 7.6 | 34.7 |
Adjusted EBITA (Oct-Dec)
Adjusted EBITA amounted to NOK 18.0 million in Q4 2023 compared to NOK 15.0 million in the same period in 2022. The adjusted EBITA margin increased from 12.1% to 12.8% in Q4 2023. The margin improvement comes from a relative reduction in Operational service and Vehicle operating expenses, while Personnel expenses have increased. ControTech has a positive impact on the margin.
Adjusted EBITA (Jan-Dec)
Adjusted EBITA amounted to NOK 58.5 million in the period 2023 compared to NOK 50.9 million in the same period in 2022. The adjusted EBITA margin remained at 11.9%, which is similar to 2022. A program for improved profitability is being implemented.
| Oct-Dec | Oct-Dec | Change, | Jan-Dec | Jan-Dec | Change, | |
|---|---|---|---|---|---|---|
| NOK million | 2023 | 2022 | % | 2023 | 2022 | % |
| Total operating revenue | 140.0 | 124.2 | 12.7 | 491.7 | 426.9 | 15.2 |
| EBITA | 17.3 | 15.0 | 14.9 | 57.8 | 48.8 | 18.5 |
| EBITA margin, % | 12.3 | 12.1 | 0.2 pp | 11.7 | 11.4 | 0.3 pp |
| Adjusted EBITA | 18.0 | 15.0 | 19.6 | 58.5 | 50.9 | 14.8 |
| Adjusted EBITA margin, % | 12.8 | 12.1 | 0.7 pp | 11.9 | 11.9 | 0 pp |
Denmark – continued improvements, adjusted EBITA-margin up by 5.3%-points in Q4
The Group entered Denmark in 2017 through the acquisition of a platform with national market presence. The Group's first subsidiary in the country was founded more than 100 years ago in Herning. Norva24 holds a leading position in the Danish market. Denmark had 185 employees as of December 31, 2023.
Highlights of the quarter
The improvement plan is continuing to show results on profitability. The action plan is proceeding well according to schedule, with a strong focus on operational efficiency and increasing the degree of utilization of vehicles and personnel. Norva24 Denmark has over the last months won several large tenders at attractive terms.
Total operating revenue (Oct-Dec)
Total operating revenue for the fourth quarter of 2023 amounted to NOK 113.0 million, compared with NOK 91.0 million during the same period of 2022, corresponding to total growth of 24.2%. The total growth was driven by the currency adjusted organic growth of 7.3% and the acquisition of Tom's Kloakservice. Broad-based growth was noted across most customer groups leading to the strong organic growth.
| Oct-Dec | Oct-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 24.2 | 28.3 |
| Organic growth | 20.2 | 16.1 |
| Organic growth – currency adj. | 7.3 | 11.9 |
| Acquisition growth | 4.0 | 12.2 |
Total operating revenue (Jan-Dec)
Total operating revenue during the period amounted to NOK 417.7 million, compared to NOK 323.0 million in 2022, corresponding to total growth of 29.3% for the year. The total growth was driven by a currency adjusted organic growth of 6.9% and the acquisition of Tom's Kloakservice in 2023 and Thornvig Jensen contributing from the second half of 2022. Broad-based growth was noted across most customer groups leading to strong organic growth, proving the positive impact of the improvement measures in the action plan.
| Jan-Dec | Jan-Dec | |
|---|---|---|
| % | 2023 | 2022 |
| Growth – total operating revenue | 29.3 | 19.3 |
| Organic growth | 20.7 | 12.7 |
| Organic growth – currency adj. | 6.9 | 13.5 |
| Acquisition growth | 8.6 | 6.6 |
Adjusted EBITA (Oct-Dec)
Adjusted EBITA amounted to NOK 6.6 million during the quarter, compared to NOK 0.5 million during the fourth quarter of 2022. The strong adjusted EBITA is a result of the improvement initiatives that are being implemented.
Adjusted EBITA (Jan-Dec)
Adjusted EBITA amounted to NOK 27.6 million during the period, compared to NOK 7.6 million during the same period of 2022. The strong adjusted EBITA is a result of the improvement initiatives that are being implemented.
| Oct-Dec | Oct-Dec | Change, | Jan-Dec | Jan-Dec | Change, | |
|---|---|---|---|---|---|---|
| NOK million | 2023 | 2022 | % | 2023 | 2022 | % |
| Total operating revenue | 113.0 | 91.0 | 24.2 | 417.7 | 323.0 | 29.3 |
| EBITA | 6.6 | 0.5 | 1,248.4 | 27.0 | 10.1 | 167.3 |
| EBITA margin, % | 5.9 | 0.5 | 5.3 pp | 6.5 | 3.1 | 3.3 pp |
| Adjusted EBITA | 6.6 | 0.5 | 1,318.8 | 27.6 | 7.6 | 263.8 |
| Adjusted EBITA margin, % | 5.9 | 0.5 | 5.3 pp | 6.6 | 2.4 | 4.3 pp |
Financial reporting
| CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS | |||||
|---|---|---|---|---|---|
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | ||
| NOK million | Note | 2023 | 2022 | 2023 | 2022 |
| Revenue from customer contracts | 854.4 | 712.6 | 3,131.9 | 2,445.3 | |
| Other operating revenue | 1.3 | 6.9 | 20.1 | 21.1 | |
| Total operating revenue | 3 | 855.7 | 719.5 | 3,151.9 | 2,466.5 |
| Operating expenses | |||||
| Operational service expenses | –150.5 | –110.3 | –524.3 | –320.7 | |
| Personnel expenses | –352.8 | –292.3 | –1,288.2 | –1,040.8 | |
| Vehicle operating expenses | –116.8 | –118.9 | –445.2 | –390.4 | |
| Other operating expenses | –83.2 | –86.8 | –272.0 | –232.1 | |
| Other gains/losses | 0.4 | 0.3 | 0.5 | 5.0 | |
| Total operating expenses | –703.0 | –608.0 | –2,529.2 | –1,979.0 | |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 152.8 | 111.6 | 622.7 | 487.5 | |
| Total depreciation | 6, 7 | –78.4 | –66.3 | –289.9 | –241.4 |
| Earnings before interest, taxes and amortization (EBITA) | 3 | 74.4 | 45.3 | 332.8 | 246.0 |
| Total amortization | 5 | –14.4 | –9.9 | –49.0 | –34.3 |
| Earnings before interest and taxes (EBIT) | 60.0 | 35.3 | 283.9 | 211.7 | |
| Financial items | |||||
| Financial income | 14.9 | 8.1 | 70.2 | 42.8 | |
| Financial expenses | –51.5 | –16.7 | –120.3 | –58.3 | |
| Net financial items | 4 | –36.6 | –8.6 | –50.1 | –15.5 |
| Profit before income tax (EBT) | 23.4 | 26.7 | 233.7 | 196.3 | |
| Income tax expense * | 43.5 | –13.4 | –7.2 | –56.8 | |
| Profit for the period | 66.9 | 13.3 | 226.6 | 139.5 | |
| Profit attributable to | |||||
| Owners of the parent company | 66.9 | 13.3 | 226.6 | 139.5 | |
| Non-controlling interests | – | – | – | – | |
| Total | 66.9 | 13.3 | 226.6 | 139.5 | |
| Earnings per share: | |||||
| Basic earnings per share, NOK | 0.37 | 0.07 | 1.24 | 0.76 | |
| Diluted earnings per share, NOK | 0.37 | 0.07 | 1.24 | 0.76 | |
| Average numbers of outstanding ordinary shares, before and after dilution | 182,501,630 182,682,740 182,632,036 182,584,957 |
* Income tax expense in Q4 includes an adjustment for accumulated changes in deferred taxes in Sweden relating to current and previous periods. The previous period adjustment has no cash impact of taxes paid.
| CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||
|---|---|---|---|---|
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| NOK million | 2023 | 2022 | 2023 | 2022 |
| Profit/loss for the period | 66.9 | 13.3 | 226.6 | 139.5 |
| Other comprehensive income: | ||||
| Items that may be reclassified to profit or loss | ||||
| Translation differences | 42.1 | –31.7 | 117.5 | –34.3 |
| Other comprehensive income for the period | 42.1 | –31.7 | 117.5 | –34.3 |
| Total comprehensive income for the period | 109.0 | –18.4 | 344.1 | 105.1 |
| Total comprehensive income attributable to: | ||||
| Owners of the parent company | 109.0 | –18.4 | 344.1 | 105.1 |
| Non-controlling interests | – | – | – | – |
| Total | 109.0 | –18.4 | 344.1 | 105.1 |
| CONDENSED CONSOLIDATED BALANCE SHEET | ||
|---|---|---|
| Dec 31, | Dec 31, | |
| NOK million Note |
2023 | 2022 |
| ASSETS | ||
| Non-current assets | ||
| Intangible assets 5 |
1,868.7 | 1,661.1 |
| Right-of-use assets 6 |
893.3 | 752.3 |
| Property, plant and equipment 7 |
510.7 | 483.9 |
| Financial assets at amortized cost | 5.2 | 5.3 |
| Total non-current assets | 3,277.8 | 2,902.5 |
| Current assets | ||
| Inventories | 18.7 | 12.7 |
| Accounts receivable | 441.9 | 340.1 |
| Other current receivables | 201.0 | 147.8 |
| Cash and cash-equivalents | 267.0 | 204.7 |
| Total current assets | 928.6 | 705.3 |
| Total assets | 4,206.4 | 3,607.8 |
| EQUITY AND LIABILITIES | ||
| Equity Equity |
2,070.6 | 1,729.2 |
| Total equity | 2,070.6 | 1,729.2 |
| Non-current liabilities | ||
| Deferred tax liability | 36.6 | 80.5 |
| Non-current lease liabilities 6 |
647.9 | 554.3 |
| Non-current loans | 638.4 | 533.5 |
| Other non-current liabilities | 5.8 | 49.0 |
| Total non-current liabilities | 1,328.7 | 1,217.3 |
| Current liabilities | ||
| Accounts payable | 157.5 | 135.8 |
| Taxes payable | 40.6 | 21.3 |
| Current portion of lease liabilities 6 |
219.7 | 179.5 |
| Current portion of loans | 11.3 | 11.5 |
| Provisions | 58.7 | 52.0 |
| Other current liabilities | 319.4 | 261.1 |
| Total current liabilities | 807.2 | 661.2 |
| Total liabilities | 2,135.8 | 1,878.5 |
| Total equity and liabilities | 4,206.4 | 3,607.8 |
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share capital | Additional | |||||||
| Share | (not yet | paid in | Treasury | Other | Retained | Total | ||
| NOK million | Note | capital | registered) | capital | shares | reserves | earnings | equity |
| Equity at January 1, 2023 | 0.6 | – | 1,437.1 | – | –58.4 | 350.0 | 1,729.2 | |
| Total comprehensive income for the period: | ||||||||
| Profit/loss for the period | – | – | – | – | – | 226.6 | 226.6 | |
| Other comprehensive income: | ||||||||
| Translation differences | – | – | – | – | 117.5 | – | 117.5 | |
| Total comprehensive income for the period | – | – | – | – | 117.5 | 226.6 | 344.1 | |
| Repurchase of own shares | 9 | – | – | – | –4.3 | – | – | –4.3 |
| Share-based payments | 9 | – | – | 1.5 | – | – | – | 1.5 |
| Equity at December 31, 2023 | 0.6 | – | 1,438.6 | –4.3 | 59.1 | 576.5 | 2,070.6 | |
| Equity at January 1, 2022 | 0.5 | 0.1 | 1,432.9 | – | –24.1 | 210.2 | 1,619.6 | |
| Total comprehensive income for the period: | ||||||||
| Profit/loss for the period | – | – | – | – | – | 139.5 | 139.5 | |
| Other comprehensive income: | ||||||||
| Translation differences | – | – | – | – | –34.3 | – | –34.3 | |
| Total comprehensive income for the period | – | – | – | – | –34.3 | 139.5 | 105.1 | |
| Transactions with owners in their capacity | ||||||||
| as owners: | ||||||||
| Capital increase (net of transactions costs) | 0.1 | –0.1 | – | – | – | – | – | |
| Capital increase (net of transactions costs) | – | – | 4.2 | – | – | – | 4.2 | |
| Over-allotment option | ||||||||
| (net of transaction costs) | – | – | – | – | – | 0.3 | 0.3 |
The Group has no non-controlling interest.
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
|---|---|---|---|---|---|
| NOK million | Note | 2023 | 2022 | 2023 | 2022 |
| Cash flows from operating activities | |||||
| Profit before income tax | 23.4 | 26.7 | 233.7 | 196.3 | |
| Adjustments for: | |||||
| Impairment, depreciation and amortization expenses | 5, 6, 7 | 92.8 | 76.3 | 338.9 | 275.7 |
| Taxes paid | –3.5 | –17.0 | –32.7 | –56.6 | |
| Net gain/loss on sale of non-current assets | 0.1 | –4.7 | –11.0 | –17.9 | |
| Net financial items | 4 | 36.6 | 8.6 | 50.1 | 15.5 |
| Share-based payments | 9 | 0.7 | – | 1.5 | – |
| Change in net working capital | 50.6 | 59.8 | –81.0 | –111.0 | |
| Changes in other items* | 43.9 | –6.4 | 54.4 | 41.3 | |
| Net cash inflow from operating activities | 244.5 | 143.3 | 553.9 | 343.3 | |
| Cash flows from investing activities | |||||
| Payment for acquisition of subsidiaries, net of cash acquired | 8 | –55.1 | –50.7 | –142.6 | –268.9 |
| Payment of earnouts Payment for fixed assets |
–10.2 –52.7 |
–26.1 –41.1 |
–33.6 –166.7 |
–49.8 –83.9 |
|
| Proceeds from sale of fixed assets | 1.8 | 17.1 | 14.2 | 40.1 | |
| Investments in treasury shares | 9 | –1.3 | – | –4.3 | – |
| Net cash outflow from investing activities | –117.4 | –100.8 | –332.9 | –362.5 | |
| Cash flows from financing activities | |||||
| Proceeds from borrowings | 23.3 | 82.0 | 175.8 | 331.1 | |
| Repayment of borrowings | –4.0 | –66.6 | –59.7 | –160.4 | |
| Principal element of lease payments | 6 | –93.3 | –36.8 | –222.9 | –144.2 |
| Interest paid, loans | –10.7 | –5.1 | –36.0 | –14.7 | |
| Interest paid, lease | –3.3 | –8.3 | –38.0 | –32.6 | |
| Interest received | 0.2 | – | 5.5 | – | |
| Other financial payments | –0.4 | –4.3 | 1.2 | –5.0 | |
| Cash flows from financing activities | –88.4 | –39.1 | –174.1 | –25.8 | |
| Change in cash and cash equivalents | 38.7 | 3.4 | 46.8 | –45.0 | |
| 221.0 | 201.3 | 204.7 | 260.4 | ||
| Cash and cash equivalents at the start of the period Effects of exchange rate changes on cash and cash equivalents |
7.4 | –0.1 | 15.5 | –10.6 |
* Includes changes in other non-current receivables and other non-current liabilities, effects on net working capital from acquisitions and translation differences.
Notes
NOTE 1 REPORTING ENTITY
Norva24 Group AB (publ) is a limited liability company listed on Nasdaq Stockholm. The share became publicly traded with the initial public offering December 9, 2021. Norva 24 Group AB (publ) and its subsidiaries (the Group or Norva24 Group) operate in the underground infrastructure industry, and are present in Norway, Germany, Sweden and Denmark.
NOTE 2 BASIS OF PREPARATION
Accounting principles
Norva24 Group applies the International Financial Reporting Standards (IFRS) as they have been adopted by the European Union. The consolidated accounts in the interim report have been prepared in accordance with IAS 34 Interim Financial Reporting and applicable regulations in the Swedish Annual Accounts Act. The Parent Company accounts have been prepared in accordance with the Swedish Annual Accounts Act and RFR 2, Accounting for Legal Entities. The interim report should be read together with the historical financial information included in the annual report. Accounting principles and calculation basis are in accordance with those that were applied in the most recent annual report. Information required by IAS 34 also appears in other parts of the interim report.
The amounts are rounded to the nearest million (NOK million) with one decimal place unless otherwise stated. As a consequence of rounding, figures presented in the financial reports may not add up to the exact total in certain cases and percentage figures presented can differ from the exact percentage figures. Amounts in brackets concern the comparative period.
Significant accounting judgements, estimates and assumptions
In preparing the interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, equity and liabilities, revenue and expenses.
The estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the given circumstances. A change in accounting estimate is recognized in the period in which the estimate is reassessed if the change affects that period only, or in both current and future periods if the change affects both.
In preparing the consolidated interim financial statements, significant judgements made by management in applying the Group's accounting policies and key sources of uncertainty in the estimates are consistent with those applied for the annual report.
Other
Items included in the financial statements of each of the Norva24 Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Norwegian Kroner (NOK) which is Norva24 Group's presentation currency. The Parent Company Norva24 Group AB (publ)'s functional currency is Swedish Kroner (SEK).
There have been no related party transactions other than the continuation of agreements described in the annual report and the events and transactions related to share-based payments described in note 9.
NOTE 3 SEGMENT AND REVENUE INFORMATION
Operating segments
Norva24 Group identifies its operating segments and discloses segment information in accordance with IFRS 8 Operating Segments. Accordingly, the Group identifies its segments consistent with the reporting structure used by management.
Operating segments are components of a business that are evaluated regularly by the chief operating decision maker for the purpose of assessing performance and allocating resources. The financial information is disclosed on the same basis as used by the chief operating decision maker. The Group's operating segments are organised by country level. The column "Corporate & other" includes corporate expenses and eliminations.
Revenue
The Group disaggregates revenue based on operational segments. The Group has no single customer accounting for more than 10 percent of total revenue.
NOTE 3 SEGMENT AND REVENUE INFORMATION, continued
| OPERATING SEGMENTS FINANCIALS JANUARY-DECEMBER 2023 | ||||||
|---|---|---|---|---|---|---|
| NOK million | Norway | Germany | Sweden | Denmark | Corporate & other |
Total |
| Total operating revenue | 1,065.7 | 1,183.4 | 491.7 | 417.7 | –6.6 | 3,151.9 |
| Adjusted EBITDA | 259.7 | 242.5 | 113.9 | 74.9 | –53.4 | 637.6 |
| Depreciation | –100.6 | –86.4 | –55.4 | –47.3 | –0.1 | –289.9 |
| Adjusted EBITA | 159.1 | 156.1 | 58.5 | 27.6 | –53.5 | 347.7 |
| Non-recurring items | –2.0 | –3.4 | –0.7 | –0.6 | –8.3 | –14.9 |
| EBITA | 157.1 | 152.6 | 57.8 | 27.0 | –61.7 | 332.8 |
| OPERATING SEGMENTS FINANCIALS JANUARY-DECEMBER 2022 | ||||||
| NOK million | Norway | Germany | Sweden | Denmark | Corporate & other |
Total |
| Total operating revenue | 904.9 | 812.9 | 426.9 | 323.0 | –1.3 | 2,466.5 |
| Adjusted EBITDA | 221.5 | 192.4 | 99.6 | 48.8 | –42.3 | 520.0 |
| Depreciation | –84.1 | –67.5 | –48.7 | –41.2 | –0.0 | –241.4 |
| Adjusted EBITA | 137.5 | 124.9 | 50.9 | 7.6 | –42.3 | 278.6 |
| Non-recurring items | –3.3 | –29.4 | –2.2 | 2.5 | –0.2 | –32.5 |
| EBITA | 134.2 | 95.5 | 48.8 | 10.1 | –42.5 | 246.0 |
| RECONCILIATION OF SEGMENT INFORMATION AND EARNINGS BEFORE INCOME TAX (EBT) | ||||||
| Jan-Dec | Jan-Dec | |||||
| NOK million | 2023 | 2022 | ||||
| EBITA | 332.8 | 246.0 | ||||
| Amortization of intangible assets | –49.0 | –34.3 | ||||
| Net financial items | –50.1 | –15.5 | ||||
| Profit before income tax | 233.7 | 196.3 | ||||
| RECONCILIATION OF NON-RECURRING ITEMS JANUARY-DECEMBER 2023 | ||||||
| NOK million | Norway | Germany | Sweden | Denmark | Corporate & other |
Total |
| Restructuring cost and other provisions Top management recruitment costs |
–0.4 – |
– – |
– – |
– – |
–4.1 –4.2 |
–4.5 –4.2 |
| M&A Cost | –1.6 | –3.4 | –0.7 | –0.6 | – | –6.3 |
| Other gains/losses | – | – | – | – | – | – |
| Non-recurring items | –2.0 | –3.4 | –0.7 | –0.6 | –8.3 | –14.9 |
| RECONCILIATION OF NON-RECURRING ITEMS JANUARY-DECEMBER 2022 | ||||||
| NOK million | Norway | Germany | Sweden | Denmark | Corporate & other |
Total |
| Restructuring cost and other provisions | –3.3 | – 22.7 | – | – | –0.2 | –26.2 |
| M&A Cost | – | –6.7 | –2.2 | –2.2 | – | –11.1 |
| Other gains/losses | – | – | – | 4.7 | – | 4.7 |
| Non-recurring items | –3.3 | –29.4 | –2.2 | 2.5 | –0.2 | –32.5 |
| NOTE 4 FINANCIAL ITEMS | ||
|---|---|---|
| -- | ------------------------ | -- |
| Specification of financial items | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
|---|---|---|---|---|
| NOK million | 2023 | 2022 | 2023 | 2022 |
| Interest income | 0.2 | 0.6 | 5.5 | 1.5 |
| Currency exchange gain | – | 9.1 | 37.6 | 35.8 |
| Gain earnout | 12.5 | – | 19.5 | 1.7 |
| Other financial income | 2.3 | –1.6 | 7.7 | 3.9 |
| Financial income | 14.9 | 8.1 | 70.2 | 42.8 |
| Interest expenses, leases | –11.3 | –8.8 | –41.3 | –33.2 |
| Amortized interest expense, loans | –10.7 | –4.7 | –36.0 | –13.1 |
| Currency exchange loss | –26.8 | – | –36.5 | – |
| Loss earnout | – | – | – | –3.9 |
| Other financial expenses | –2.7 | –3.2 | –6.5 | –8.0 |
| Financial expenses | –51.5 | –16.7 | –120.3 | –58.3 |
| Net financial items | –36.6 | –8.6 | –50.1 | –15.5 |
NOTE 5 INTANGIBLE ASSETS AND GOODWILL
| AT DECEMBER 31, 2023 | |||||
|---|---|---|---|---|---|
| NOK million | Goodwill | Brand | Customer relationships |
Other intangible assets |
Total |
| Carrying amount at January 1, 2023 | 1,508.7 | 60.8 | 87.4 | 4.2 | 1,661.1 |
| Acquired in business combinations (see Note 8) | 122.0 | 10.6 | 21.2 | – | 154.0 |
| Additions | – | – | – | 1.1 | 1.1 |
| Amortization and impairment | – | –9.5 | –38.2 | –1.3 | –49.0 |
| Disposals | – | – | – | 0.0 | 0.0 |
| Adjustments* | 10.3 | – | – | – | 10.3 |
| Translation differences | 76.4 | 5.4 | 9.3 | 0.3 | 91.5 |
| Carrying amount at December 31, 2023 | 1,717.3 | 67.3 | 79.7 | 4.4 | 1,868.7 |
| Useful life in years | Indefinite | 10 | 3-5 | 3-5 | |
| Amortization plan | Linear | Linear | Linear |
NOTE 5 INTANGIBLE ASSETS AND GOODWILL, continued
AT DECEMBER 31, 2022
| Customer | Other intangible | |||||
|---|---|---|---|---|---|---|
| NOK million | Goodwill | Brand | relationships | assets | Total | |
| Carrying amount at January 1, 2022 | 1,222.6 | 45.4 | 70.6 | 4.3 | 1,343.0 | |
| Acquired in business combinations | 252.7 | 20.4 | 40.8 | 0.1 | 313.9 | |
| Additions | – | – | – | 0.9 | 0.9 | |
| Amortization and impairment | – | –6.6 | –26.4 | –1.3 | –34.3 | |
| Disposals | – | – | – | – | – | |
| Translation differences | 33.4 | 1.7 | 2.4 | 0.2 | 37.7 | |
| Carrying amount at December 31, 2022 | 1,508.7 | 60.8 | 87.4 | 4.2 | 1,661.1 | |
| Useful life in years | Indefinite | 10 | 3-5 | 3-5 | ||
| Amortization plan | Linear | Linear | Linear |
* During the period final adjustments on the prior year acquisitions of CKS Rohr Express GmbH and CKS Express Baumanagement GmbH were made. The total adjustment is considered immaterial.
| AT DECEMBER 31, 2023 | ||||
|---|---|---|---|---|
| Right-of-use assets | Buildings and | Vehicles and | Furniture, | |
| NOK million | property | equipment | fixtures & other | Total |
| Carrying amount at January 1, 2023 | 265.4 | 480.1 | 6.8 | 752.3 |
| Acquired in business combinations (see Note 8) | – | 21.3 | – | 21.3 |
| Additions | 34.0 | 198.5 | 5.7 | 238.1 |
| Depreciation and impairment | –62.0 | –96.5 | –4.3 | –162.8 |
| Transfer to property, plant and equipment (see Note 7) | –1.7 | –16.7 | –0.2 | –18.5 |
| Adjustments | 25.2 | 5.1 | 1.6 | 31.9 |
| Translation differences | 9.1 | 26.2 | –4.4 | 30.9 |
| Carrying amount at December 31, 2023 | 270.1 | 618.0 | 5.2 | 893.3 |
| Useful life in years | 3-30 | 5-10 | 3-7 | |
| Depreciation plan | Linear | Linear | Linear | |
| Lease liabilities | Buildings and | Vehicles and | Furniture, | |
| NOK million | property | equipment | fixtures & other | Total |
| Carrying amount at January 1, 2023 | 279.3 | 447.5 | 6.9 | 733.7 |
| Acquired in business combinations (see Note 8) | – | 21.3 | – | 21.3 |
| Additions | 32.3 | 198.1 | 5.7 | 236.0 |
| Lease payments | –72.7 | –144.7 | –5.6 | –222.9 |
| Interest on the lease liability | 14.9 | 22.8 | 0.3 | 38.0 |
| Adjustments | 23.5 | 5.4 | 1.6 | 30.5 |
| Translation differences | 9.1 | 25.2 | –3.3 | 31.0 |
| Carrying amount at December 31 2023 | 286.4 | 575.7 | 5.5 | 867.6 |
| Current lease liabilities | 71.0 | 145.3 | 3.4 | 219.7 |
NOTE 6 LEASING, continued
| AT DECEMBER 31, 2022 | ||
|---|---|---|
| -- | -- | ---------------------- |
| Right-of-use assets NOK million |
Buildings and property |
Vehicles and equipment |
Furniture, fixtures & other |
Total |
|---|---|---|---|---|
| Carrying amount at January 1, 2022 | 251.3 | 464.0 | 9.0 | 724.3 |
| Acquired in business combinations | 7.7 | 14.7 | 0.1 | 22.5 |
| Additions | 35.8 | 83.5 | 1.7 | 121.0 |
| Depreciation and impairment | –53.7 | –76.1 | –4.4 | –134.1 |
| Transfer to property, plant and equipment (see Note 7) | – | –17.5 | –0.1 | –17.6 |
| Adjustments | 21.8 | 6.7 | 0.2 | 28.7 |
| Translation differences | 2.5 | 4.7 | 0.3 | 7.6 |
| Carrying amount at December 31, 2022 | 265.4 | 480.1 | 6.8 | 752.3 |
| Useful life in years | 3-30 | 7-10 | 3-7 | |
| Depreciation plan | Linear | Linear | Linear | |
| Lease liabilities | Buildings and | Vehicles and | Furniture, | |
| NOK million | property | equipment | fixtures & other | Total |
| Carrying amount at January 1, 2022 | 260.9 | 428.6 | 9.2 | 698.7 |
| Acquired in business combinations | 7.7 | 14.7 | 0.1 | 22.5 |
| Additions | 35.8 | 83.5 | 1.6 | 120.9 |
| Lease payments | –64.0 | –108.2 | –4.7 | –176.9 |
| Interest on the lease liability | 14.5 | 17.8 | 0.3 | 32.6 |
| Adjustments | 21.8 | 6.7 | 0.1 | 28.6 |
| Translation differences | 2.7 | 4.2 | 0.3 | 7.2 |
| Carrying amount at December 31, 2022 | 279.3 | 447.5 | 6.9 | 733.7 |
| Current lease liabilities | 64.3 | 111.0 | 4.2 | 179.5 |
| Non-current lease liabilities | 215.0 | 336.5 | 2.8 | 554.3 |
NOTE 7 PROPERTY, PLANT AND EQUIPMENT
| AT DECEMBER 31, 2023 NOK million |
Buildings and property |
Vehicles and equipment |
Furniture, fixtures & other |
Total |
|---|---|---|---|---|
| Carrying amount at January 1, 2023 | 53.7 | 402.3 | 27.9 | 483.9 |
| Acquired in business combinations | 1.7 | 15.7 | –1.6 | 15.8 |
| Additions | 22.0 | 107.8 | 35.7 | 165.6 |
| Transfer from right-of-use assets (see Note 6) | 1.7 | 16.7 | 0.2 | 18.5 |
| Depreciation and impairment | –6.3 | –118.0 | –2.8 | –127.1 |
| Disposals | –0.0 | –12.0 | –1.9 | –14.0 |
| Adjustments | – | –8.0 | – | –8.0 |
| Translation differences | 0.8 | –3.7 | –21.1 | –24.0 |
| Carrying amount at December 31, 2023 | 73.5 | 400.9 | 36.3 | 510.7 |
| Useful life in years | 3-30 | 5-10 | 3-7 | |
| Depreciation plan | Linear | Linear | Linear |
NOTE 7 PROPERTY, PLANT AND EQUIPMENT, continued
AT DECEMBER 31, 2022
| Buildings | Vehicles and | Furniture, | ||
|---|---|---|---|---|
| NOK million | and property | equipment | fixtures & other | Total |
| Carrying amount at January 1, 2022 | 63.9 | 341.6 | 23.8 | 429.3 |
| Acquired in business combinations | 0.1 | 69.6 | 4.3 | 74.0 |
| Additions | 1.4 | 71.9 | 9.7 | 83.0 |
| Transfer from right-of-use assets (see Note 6) | – | 17.5 | 0.1 | 17.6 |
| Depreciation and impairment | –5.0 | –93.8 | –8.5 | –107.3 |
| Disposals | –5.2 | –13.4 | –4.3 | –22.9 |
| Reclassification | –3.0 | 3.3 | –0.3 | – |
| Translation differences | 1.4 | 5.5 | 3.2 | 10.1 |
| Carrying amount at December 31, 2022 | 53.7 | 402.3 | 27.9 | 483.9 |
| Useful life in years | 3-30 | 7-10 | 3-7 | |
| Depreciation plan | Linear | Linear | Linear |
NOTE 8 BUSINESS COMBINATIONS
| Acquired units during 2023 | Country | Date Ownership | |
|---|---|---|---|
| Gravco AS | Norway | January 19 | 100% |
| Septik Tank AS | Norway | January 19 | 100% |
| Tom's Kloakservice ApS | Denmark | August 1 | 100% |
| ControTech i Malmö AB | Sweden November 9 | 100% | |
| Purchase consideration | |||
| NOK million | |||
| Cash paid Earn-out/Contingent consideration |
182.3 | ||
| (Fair value estimate at date of acquisition) | 19.5 | ||
| Total purchase consideration | 201.9 | ||
| Opening balance sheet | Note | ||
| Cash | 39.7 | ||
| Other current assets | 26.3 | ||
| Property, plant and equipment | 7 | 15.8 | |
| Right-of-use assets | 6 | 21.3 | |
| Brand | 5 | 10.6 | |
| Customer relationships | 5 | 21.2 | |
| Total assets | 134.9 | ||
| Other current liabilities | 21.8 | ||
| Other non-current liabilities | 6 | 26.5 | |
| Deferred tax on excess values | 6.8 | ||
| Total liabilities | 55.1 | ||
| Net identifiable assets | 79.8 | ||
| Goodwill | 5 | 122.0 | |
| Total consideration for the shares | 201.9 |
The operations of the acquired entities are similar to the Group's existing operations and will strengthen the Group's position in the existing segments. The Group considers the business combinations to be individually immaterial and therefore the acquisitions are shown in the aggregate. Goodwill consists of synergies from cost savings and the increase in market share. The acquired businesses also include the assembled workforce. These items are not identifiable assets, and are subsumed into goodwill. Goodwill will not be deductible for tax purposes. All purchase price allocations in 2023 are preliminary. Transaction costs are shown as non-recurring items under Note 3 as they impact comparability. Transaction cost are recognized under Other operating expenses in the Statement of profit or loss.
Earn-outs are conditional on the acquired entity reaching certain future financial targets such as revenue, EBITDA and EBITA. The Group recognizes provisions for fair value of earn-outs based on estimated likelihood of achieving the given targets and the expected future pay-out. Recognized earn-out gains and losses are shown in Note 4.
| Revenue and profit or loss from acquisitions | |
|---|---|
| recognized in statement of profit or loss | Jan-Dec |
| NOK million | 2023 |
| Revenue | 106.9 |
| Profit or loss for the period | 7.4 |
| Revenue and profit or loss as if the acquisitions | |
| had occurred January 1 (pro forma) | Jan-Dec |
| NOK million | 2023 |
| Revenue | 151.6 |
| Profit or loss for the period | 22.8 |
NOTE 9 SHARE-BASED PAYMENTS
On 25 May 2023 the General Assembly decided on a long-term incentive plan (LTIP) for members of management and key personnel, where a total amount of 2,283,534 options have been granted. The options are subject to a three-year vesting period and the Group has no present obligation to settle the awards in cash. As such the Group's costs related to the LTIP are recognized as equity-settled. The fair value of the options has been estimated using a Black & Scholes model.
Related to the LTIP, the Annual General Meeting authorized the Board of Directors to initiate a repurchase program of own shares. As of December 31, 2023, 182,871 shares have been reacquired (treasury shares). Treasury shares are recognized at cost and deducted from equity.
Further information on the LTIP and repurchase program is provided in the published bulletin from the annual general meeting.
Parent Company
| PARENT COMPANY CONDENSED STATEMENT OF PROFIT OR LOSS | ||||
|---|---|---|---|---|
| Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |
| SEK million | 2023 | 2022 | 2023 | 2022 |
| Total operating revenue | 9.1 | 1.9 | 9.1 | 2.8 |
| Other operating expenses | –5.1 | –1.7 | –16.9 | –8.7 |
| Earnings before interest and taxes (EBIT) | 4.0 | 0.2 | –7.8 | –5.9 |
| Net financial items | 7.9 | 9.0 | 34.2 | 15.2 |
| Profit before income tax | 11.9 | 9.2 | 26.4 | 9.2 |
| Income tax expenses | –2.5 | –0.3 | –5.7 | –0.3 |
| Profit for the period | 9.4 | 8.9 | 20.7 | 8.9 |
| Other comprehensive income | – | – | – | – |
| PARENT COMPANY CONDENSED BALANCE SHEET | ||
|---|---|---|
| Dec 31, | Dec 31, | |
| SEK million | 2023 | 2022 |
| ASSETS | ||
| Non-current assets | ||
| Investment in subsidiaries | 2,880.0 | 2,875.6 |
| Deferred tax asset | 16.7 | 16.4 |
| Non-current intercompany receivables | 904.3 | 866.7 |
| Total non-current assets | 3,801.0 | 3,758.7 |
| Current assets | ||
| Current receivables | 0.5 | 9.8 |
| Current intercompany receivables | 9.1 | 2.8 |
| Cash and cash-equivalents | – | 1.3 |
| Total current assets | 9.6 | 13.9 |
| Total assets | 3,810.6 | 3,772.5 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Restricted equity | 0.6 | 0.6 |
| Non-restricted equity | 3,792.0 | 3,765.6 |
| Total equity | 3,792.7 | 3,766.2 |
| Current liabilities | ||
| Accounts payable | 0.9 | 0.9 |
| Other current liabilities | 17.0 | 5.4 |
| Total current liabilities | 17.9 | 6.3 |
| Total equity and liabilities | 3,810.6 | 3,772.5 |
Declaration of the Board of Directors
The Board of Directors and Chief Executive Officer warrant and declare that this interim report gives a true and fair view of the Parent Company's and Group's operations, financial positions and results, and that it describes significant risks and uncertainties faced by the Parent Company and the companies included in the Group.
Stockholm, February 22, 2024
Vidar Meum Chairman
Allan Engström Arild Bødal Pontus Boman Board member Board member Board member
Board member Board member Board member
Mats Lönnqvist Linus Lundmark Monica Reib
Ulrika Östlund Board member
Henrik Norrbom Group CEO
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| QUARTERLY DATA FOR THE CONSOLIDATED GROUP | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| NOK million | 2021 | 2022 | 2022 | 2022 | 2022 | 2023 | 2023 | 2023 | 2023 |
| Total operating revenue | |||||||||
| Norway | 220.5 | 213.1 | 243.5 | 222.7 | 225.6 | 249.2 | 270.5 | 274.5 | 271.4 |
| Germany | 197.7 | 157.0 | 173.7 | 203.4 | 278.8 | 251.8 | 298.3 | 300.9 | 332.5 |
| Sweden | 99.8 | 85.5 | 114.0 | 103.2 | 124.2 | 110.5 | 127.5 | 113.8 | 140.0 |
| Denmark | 70.9 | 70.7 | 77.9 | 83.4 | 91.0 | 97.1 | 104.1 | 103.5 | 113.0 |
| Corporate | – | – | –0.6 | –0.7 | – | –4.0 | –0.9 | –0.5 | -1.2 |
| Group | 588.9 | 526.4 | 608.5 | 612.0 | 719.5 | 704.6 | 799.4 | 792.2 | 855.7 |
| EBITA | |||||||||
| Norway | 33.7 | 29.1 | 44.8 | 40.4 | 19.9 | 30.6 | 40.7 | 64.3 | 21.5 |
| Germany | 29.0 | 19.0 | 25.3 | 31.2 | 20.0 | 25.3 | 39.4 | 44.5 | 43.4 |
| Sweden | 10.1 | 4.6 | 13.8 | 15.3 | 15.0 | 9.7 | 12.2 | 18.5 | 17.3 |
| Denmark | 43.9 | –0.3 | 2.4 | 7.5 | 0.5 | 5.0 | 6.2 | 9.2 | 6.6 |
| Corporate | –33.9 | –9.1 | –14.4 | –8.9 | –10.1 | –13.6 | –20.2 | –13.5 | –14.4 |
| Total EBITA | 82.8 | 43.3 | 71.9 | 85.5 | 45.3 | 57.0 | 78.4 | 123.1 | 74.4 |
| Adjusted EBITA | |||||||||
| Norway | 34.2 | 29.1 | 47.5 | 40.6 | 20.2 | 32.0 | 40.9 | 64.7 | 21.5 |
| Germany | 36.0 | 19.0 | 27.4 | 33.3 | 45.2 | 25.3 | 39.4 | 44.5 | 46.8 |
| Sweden | 10.3 | 4.6 | 14.6 | 16.7 | 15.0 | 9.7 | 12.2 | 18.5 | 18.0 |
| Denmark | 3.7 | –0.3 | 2.4 | 5.0 | 0.5 | 5.0 | 6.2 | 9.8 | 6.6 |
| Corporate | –2.3 | –9.1 | –14.4 | –8.9 | –9.9 | –12.6 | –16.0 | –13.6 | –11.3 |
| Total adjusted EBITA | 82.0 | 43.3 | 77.6 | 86.7 | 71.0 | 59.4 | 82.7 | 124.0 | 81.6 |
| Adjusted EBITA margin, % | |||||||||
| Norway | 15.5 | 13.6 | 19.5 | 18.2 | 9.0 | 12.8 | 15.1 | 23.6 | 7.9 |
| Germany | 18.2 | 12.1 | 15.8 | 16.4 | 16.2 | 10.1 | 13.2 | 14.8 | 14.1 |
| Sweden | 10.4 | 5.4 | 12.8 | 16.1 | 12.1 | 8.8 | 9.6 | 16.3 | 12.8 |
| Denmark | 5.3 | –0.4 | 3.1 | 6.0 | 0.5 | 5.1 | 5.9 | 9.5 | 5.9 |
| Corporate | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a |
| Group | 13.9 | 8.2 | 12.7 | 14.2 | 9.9 | 8.4 | 10.4 | 15.7 | 9.5 |
Key performance indicators
| KEY FIGURES | |||||||
|---|---|---|---|---|---|---|---|
| RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES, NOT DEFINED UNDER IFRS | |||||||
| Line | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | |||
| ID | NOK million | Source | Calculation | 2023 | 2022 | 2023 | 2022 |
| A | Total operating revenue | P&L | 855.7 | 719.5 | 3,151.9 | 2,466.5 | |
| Profit/(Loss) for the period | P&L | 66.9 | 13.3 | 226.6 | 139.5 | ||
| Earnings per share (basic and diluted), NOK | P&L | 0.37 | 0.07 | 1.24 | 0,76 | ||
| Average number of ordinary shares outstanding | 182,501,630 182,682,740 182,632,036 182,584,957 | ||||||
| Growth in total revenue, % | 18.9 | 22.2 | 27.8 | 21.8 | |||
| Organic growth in total revenue, % | 13.2 | 5.7 | 13.7 | 7.7 | |||
| Organic growth in total revenue, currency adjusted, % | 5.2 | 5.1 | 6.3 | 8.9 | |||
| Acquired growth in total revenue, % | 5.8 | 16.5 | 14.1 | 14.1 | |||
| B | Total operating expenses | P&L | –703.0 | –608.0 | –2,529.2 | –1,979.0 | |
| C | EBITDA (earnings before interest, taxes, depreciation | C=A–B | 152.7 | 111.6 | 622.7 | 487.5 | |
| and amortization | |||||||
| EBITDA margin, % | C/A | 17.8 | 15.5 | 19.8 | 19.8 | ||
| D | Depreciation and impairment of tangible assets (PPE and | Note 5 + | –78.4 | –66.3 | –289.9 | –241.4 | |
| leasing right-of-use assets) | Note 7 | ||||||
| E | EBITA | E=C–D | 74.4 | 45.3 | 332.8 | 246.0 | |
| EBITA margin, % | E/A | 8.7 | 6.3 | 10.6 | 10.0 | ||
| F | Depreciation, amortization and impairment of tangible and intangible assets |
P&L | -92.8 | –76.3 | –338.9 | –275.7 | |
| G | EBIT | G=C–F | 60.0 | 35.3 | 283.9 | 211.7 | |
| EBIT margin, % | G/A | 7.0 | 4.9 | 9.0 | 8.6 | ||
| H | Non-recurring items, expenses | 7.2 | 25.8 | 14.9 | 32.5 | ||
| I | Adjusted EBITDA | I=C+H | 160.0 | 137.4 | 637.6 | 520.0 | |
| Adjusted EBITDA margin, % | I/A | 18.7 | 19.1 | 20.2 | 21.1 | ||
| J | Adjusted EBITA | J=E+H+H2 | 81.6 | 71.0 | 347.7 | 278.6 | |
| Adjusted EBITA margin, % | J/A | 9.5 | 9.9 | 11.0 | 11.3 | ||
| K | Adjusted EBIT | K=G+H+H2 | 67.2 | 61.1 | 298.8 | 244.3 | |
| Adjusted EBIT margin, % | K/A | 7.9 | 8.5 | 9.5 | 9.9 | ||
| L | Lease payments | Note 6 | 58.7 | 45.1 | 222.9 | 176.9 | |
| M | Capital expenditures (purchases minus disposals) | Note 7 | 47.6 | 27.2 | 151.6 | 60.1 | |
| N | Cash capital expenditure | N=L+M | 106.3 | 72.3 | 374.5 | 237.0 | |
| O | Cash EBITA | O=C–N | 46.4 | 39.3 | 248.2 | 250.5 | |
| P | Adjusted cash EBITA | P=I–N | 53.7 | 65.1 | 263.1 | 283.0 | |
| Adjusted cash EBITA margin, % | P/A | 6.3 | 9.0 | 8.3 | 11.5 | ||
| Q | Net cash inflow from operating activities | Cash flow Statement |
244.5 | 143.3 | 553.9 | 343.3 | |
| R | Cash conversion, % | Q/I | 152.8 | 104.3 | 86.9 | 66.0 |
| Line | Balance sheet key financials | Dec 31, | Dec 31, | ||
|---|---|---|---|---|---|
| ID | NOK million | Source | Calculation | 2023 | 2022 |
| AA | Non-current and current loans | Financial position | 649.6 | 544.9 | |
| AB | Non-current and current lease liabilities | Financial position | 867.6 | 733.8 | |
| AC | Cash and cash equivalents | Financial position | 267.0 | 204.7 | |
| AD | Net debt | AD=AA+AB–AC | 1,250.2 | 1,074.1 | |
| AE | Net debt/LTM adjusted EBITDA* | AE=AD/I | 2.0 | 2.1 | |
| BA | Inventories | Financial position | 18.7 | 12.7 | |
| BB | Accounts receivable | Financial position | 441.9 | 340.1 | |
| BC | Other current receivables | Financial position | 201.0 | 147.8 | |
| BD | Accounts payable | Financial position | 157.5 | 135.8 | |
| BE | Other current payables | Financial position | 319.4 | 313.1 | |
| BF | Net working capital | BF= BA+BB+BC-BD–BE | 184.7 | 51.7 | |
| BG | Net working capital/LTM total revenue, % | BG=BF/A | 5.9 | 2.1 | |
| CA | Total assets | Financial position | 4,206.4 | 3,607.8 | |
| CB | Current liabilities | Financial position | 807.2 | 661.2 | |
| CC | Capital employed | CC=CA–CB | 3,399.2 | 2,946.6 | |
| CD | Return on capital employed, % | CD=G(LTM)/CC | 8.4 | 7.2 |
* LTM – Last twelve months
| SEGMENT KEY PERFORMANCE INDICATORS | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec | ||
|---|---|---|---|---|---|---|
| NOK million | 2023 | 2022 | Change, % | 2023 | 2022 | Change, % |
| Norway | ||||||
| Total operating revenue | 271.4 | 225.6 | 20.3 | 1,065.7 | 904.9 | 17.8 |
| EBITA | 21.5 | 19.9 | 8.2 | 157.1 | 134.2 | 17.1 |
| EBITA margin, % | 7.9 | 8.8 | –0.9 pp | 14.7 | 14.8 | –0.1 pp |
| Adjusted EBITA | 21.5 | 20.2 | 6.2 | 159.1 | 137.5 | 15.7 |
| Adjusted EBITA margin, % | 7.9 | 9.0 | –1.1 pp | 14.9 | 15.2 | –0.3 pp |
| Germany | ||||||
| Total operating revenue | 332.5 | 278.8 | 19.3 | 1,183.4 | 812.9 | 45.6 |
| EBITA | 43.4 | 20.0 | 117.4 | 152.6 | 95.5 | 59.8 |
| EBITA margin, % | 13.0 | 7.2 | 5.9 pp | 12.9 | 11.7 | 1.1 pp |
| Adjusted EBITA | 46.8 | 45.2 | 3.5 | 156.0 | 124.9 | 24.9 |
| Adjusted EBITA margin, % | 14.1 | 16.2 | –2.2 pp | 13.2 | 15.4 | –2.2 pp |
| Sweden | ||||||
| Total operating revenue | 140.0 | 124.2 | 12.7 | 491.7 | 426.9 | 15.2 |
| EBITA | 17.3 | 15.0 | 14.9 | 57.8 | 48.8 | 18.5 |
| EBITA margin, % | 12.3 | 12.1 | 0.2 pp | 11.7 | 11.4 | 0.3 pp |
| Adjusted EBITA | 18.0 | 15.0 | 19.6 | 58.5 | 50.9 | 14.8 |
| Adjusted EBITA margin, % | 12.8 | 12.1 | 0.7 pp | 11.9 | 11.9 | 0 pp |
| Denmark | ||||||
| Total operating revenue | 113.0 | 91.0 | 24.2 | 417.7 | 323.0 | 29.3 |
| EBITA | 6.6 | 0.5 | 1,248.4 | 27.0 | 10.1 | 167.3 |
| EBITA margin, % | 5.9 | 0.5 | 5.3 pp | 6.5 | 3.1 | 3.3 pp |
| Adjusted EBITA | 6.6 | 0.5 | 1,318.8 | 27.6 | 7.6 | 263.8 |
| Adjusted EBITA margin, % | 5.9 | 0.5 | 5.3 pp | 6.6 | 2.4 | 4.3 pp |
| Corporate & other | ||||||
| Total operating revenue | –1.2 | 0.0 | –6.6 | –1.3 | ||
| EBITA | –14.4 | –10.1 | –61.7 | –42.5 | ||
| EBITA margin, % | n.a. | n.a. | n.a. | n.a. | ||
| Adjusted EBITA | –11.3 | –9.9 | –53.5 | –42.3 | ||
| Adjusted EBITA margin, % | n.a. | n.a. | n.a. | n.a. | ||
| Norva24 Group | ||||||
| Total operating revenue | 855.7 | 719.5 | 18.9 | 3,151.9 | 2,466.5 | 27.8 |
| EBITA | 74.4 | 68.0 | 9.3 | 332.8 | 246.0 | 35.3 |
| EBITA margin, % | 8.7 | 9.4 | –0.7 pp | 10.6 | 10.0 | 0.6 pp |
| Adjusted EBITA | 81.6 | 71.0 | 14.9 | 347.7 | 278.6 | 24.8 |
| Adjusted EBITA margin, % | 9.5 | 9.9 | –0.3 pp | 11.0 | 11.3 | –0.3 pp |
Definitions
| Measure | Definition | Reason for use |
|---|---|---|
| Total operating revenue growth |
Change in total operating revenue as a percentage of total operating revenue during the comparative period, i.e., the previous year or quarter. |
Change in total operating revenue reflects the Group's realized operating revenue growth over time. |
| Organic growth in total operating revenue |
Change in total operating revenue in comparable units after adjustment for acquisition effects, as a percentage of total operating revenue during the comparative period. |
Organic total operating revenue growth excludes the effects of changes in the Group structure, which enables a comparison of operating revenue over time. |
| Acquisition growth | Change in total operating revenue as the percentage change from the comparative period of total operating revenue during the comparative period, driven by acquisitions. Acquired total operating revenue is defined as total operating revenue during the period attributable to companies which have been acquired during the most recent 12-month period and for these companies only operating revenue until 12 months after acquisition closing date. |
Acquisition growth reflects the acquired units' effects on total operating revenue. |
| EBITDA | Earnings before interest, taxes, depreciation and amortization. |
EBITDA provides an overall picture of profit generated from the operating activities and is a supplement to the operating profit (EBIT). |
| EBITDA margin | EBITDA as a percentage of total operating revenue. | EBITDA margin is used to measure operating profitability and indicates the Group's operating earnings capacity. |
| EBITA | Earnings before interest, taxes and amortization. | EBITA provides an overall view of profit generated by operating activities and is a supplement to the operating profit. |
| EBITA margin | EBITA in relation to total operating revenue. | EBITA margin is used to measure operating profitability and indicates the Group's operating earnings capacity. |
| EBIT margin | Earnings before interest and taxes (EBIT) in relation to total operating revenue. |
Operating margin enables comparison of the Group's profitability regardless of capital structure or tax situation. |
| Non-recurring items | Items affecting comparability such as acquisition costs, integration costs and restructuring costs. |
Enables comparison of profitability measures without items affecting comparability. |
| Adjusted EBITDA | EBITDA adjusted for non-recurring items. | Enables comparison of EBITDA excluding items affecting comparability with other periods. Adjusted EBITDA is a measure that the Group regards as relevant to understand income generation before investments in noncurrent assets and items affecting comparability. |
| Adjusted EBITDA margin |
Adjusted EBITDA as a percentage of total operating revenue. |
Adjusted EBITDA margin excludes the effect from items affecting comparability, which enables a comparison of the underlying operating profitability over time. |
| Adjusted EBITA | EBITA adjusted for non-recurring items. | Enables comparison of EBITA without items affecting comparability with other periods. Adjusted EBITA is a measure that the Group regards as relevant to understand income generation before investments in noncurrent assets and items affecting comparability. |
| Adjusted EBITA margin | Adjusted EBITA as a percentage of total operating revenue. |
Adjusted EBITA margin excludes the effect from items affecting comparability, which enables comparison of the underlying operating profitability over time. |
| Measure | Definition | Reason for use |
|---|---|---|
| Adjusted EBIT | Earnings before interest and taxes (EBIT) adjusted for non-recurring items. |
Adjusted EBIT (operating profit) excludes the effect from items affecting comparability, which provides a measure of profit generated from the operating activities. |
| Adjusted EBIT margin | Adjusted operating profit as a percentage of total operating revenue. |
Adjusted EBIT (operating margin) excludes the effect from items affecting comparability, which enables comparison of the underlying business over time. |
| Cash capital expenditures |
Lease payments for vehicles including interest and amortization of vehicle lease liability, rental payments for real estate and capital expenditures (investments in owned vehicles and equipment less disposals). |
Cash capital expenditures is used as an alternative measure for the Group's capital expenditures to reflect that leasing agreements are capitalized upfront while the cash payments are done over the lease period. |
| Cash EBITA | EBITDA less cash capital expenditures. | Cash EBITA provides an overall view of profit generated by operating activities and is a supplement to the operating profit. The measure is comparable to EBITA, but instead EBITDA less depreciation of fixed and leased assets, it is adjusted for the cash expenditures to such assets. This will show the impact of timing of CAPEX and the impact of financial lease on profitability. |
| Adjusted cash EBITA | Cash EBITA adjusted for non-recurring items. | Cash EBITA adjusted for non-recurring items affecting comparability which enables comparison of the underlying operating profitability over time. |
| Net debt | Total interest bearing liabilities less cash and cash equivalents. Total interest bearing liabilities consists of non-current and current loans, and leasing liabilities according to IFRS 16. |
Net debt is used to monitor the interest-bearing liabilities development and monitor the level of the refinancing requirement. The measure is also used as the numerator in the Net debt ratio used to monitor financial leverage. |
| Net debt/ LTM adjusted EBITDA |
Net debt in relation to twelve-month adjusted EBITDA. Pro forma EBITDA includes all operations within the Group for the full last twelve month period. |
The Group uses the Net debt ratio to monitor the level of financial leverage. |
| Net working capital | Net working capital includes accounts receivable and other current receivables less trade payables and other current liabilities. |
The measure shows how much net working capital is allocated in the operations and is useful to indicate how effectively net working capital is used. |
| Net working capital/ operating revenue |
Net working capital in relation to the pro forma rolling twelve-month operating revenue. |
Net working capital ratio enables the Group to measure its net working capital over time. |
| Capital expenditures | Capital expenditures is defined as funds used by the Group to acquire, upgrade, and maintain owned physical assets such as property, buildings, vehicles, or equipment. Excluding acquisitions and divestments. |
Capital expenditures is used to measure the required accounted invested funds to acquire, upgrade, and maintain the Group's physical assets. |
| Net cash inflow from operating activities |
From the Cash flow statement. | Operating cash flow is used to monitor cash flows gene rated by operating activities. The measure is also used as the numerator in the calculation of cash conversion. |
| Cash conversion | Net cash inflow from operating activities in relation to adjusted EBITDA. |
Cash conversion enables the Group to monitor how efficiently the Group manages operating investments and working capital as well as the operating activity's ability to generate cash flows. |
| Capital employed | Total assets less current liabilities. | Capital employed is a measure which the Group uses for calculating the return on capital employed and for measuring how efficient the Group is without taking goodwill generated in connection with acquisition into account. |
| Return on capital employed |
EBIT in relation to Capital employed. |
History
Although the oldest local branch of Norva24 was founded in 1919 in Norway as a family business offering UIM services with horses and carriages, Norva24 in its current form was created in 2015 through a merger of five local UIM companies in Norway, to bring a disruptive business model to and professionalize the UIM services industry. In connection with the establishment of Norva24, Valedo Partners Fund II AB invested in the Group.
Current position
Norva24 is one of the leading European players in the UIM industry with strong market presence within all its Northern European markets; Norway, Germany, Sweden and Denmark.
During Q4 2023 LTM Norva24 exceeded NOK 3,2 billion in proforma revenues, strengthened the network to 77 branches, increased the number of employees to 1,751 and completed Norva24's 45th acquisition.
Norva24 operates in many different parts of the Underground Infrastructure Maintenance serving several different types of customers. UIM services are mission critical and essential for society.
Vision & Core values
"Our long-term vision is to build a European market leader and lighthouse in Underground Infrastructure Maintenance (UIM). Norva24's vision is to become the leading European operator in our industry and an inspiration to the UIM industry development in Europe"
Values and Guiding Principles
Let these values be guiding for our business:
- We deliver what's been agreed
- We are competent and deliver high professional quality and precision
- We see and understand the customers' needs
- We show decisiveness by getting things done, and seek help from others when needed to get the job done
- We have passion for our job and will always help
- We are focused at finding solutions and have a positive appearance when meeting customers and colleagues
- We are uncomplicated and informal
- We meet customers and colleagues with a smile
Medium term financial targets
Revenue growth
Target to achieve revenue of around NOK 4.5bn by 2025 while achieving an average organic growth per annum of at least in line with market growth.
Profitability
Target to achieve an adjusted EBITA margin of 14-15% in the medium term.
Capital structure
Norva24's capital structure shall enable a high degree of financial flexibility and allow for acquisitions. Target steady state net debt ratio (including IFRS16 lease liabilities) should normally not exceed 2.5x adjusted EBITDA, other than temporarily as a result of M&A. Temporarily is defined as maximum four calendar quarter sequentially.
Dividend Policy
As part of Norva24's vision and strategy, it intends to reinvest cash flows into growth and expansion initiatives, including acquisitions, and as such does not expect to pay annual dividends to its shareholders in the medium term.
Shareholder information & financial calendar
| TOP 20 OWNERSHIP STRUCTURE DECEMBER 31, 2023 | ||
|---|---|---|
| Shareholder | Total shares | Ownership, % |
| Valedo Partners Fund II AB | 52,716,567 | 28.9 |
| Nordstjernan | 16,845,752 | 9.2 |
| Invest24 AS | 12,519,326 | 6.9 |
| Briarwood Chase Management | 10,751,321 | 5.9 |
| T. Rowe Price | 8,645,840 | 4.7 |
| Capital Group | 7,857,361 | 4.3 |
| Swedbank Robur Funds | 6 541 031 | 3.6 |
| AQP Holding AS | 3,446,536 | 1.9 |
| Royce & Associates LLC | 3,120,497 | 1.7 |
| Carnegie Funds | 3,063,901 | 1.7 |
| Robeco | 3,000,000 | 1.6 |
| JKT Birkeland Invest AS | 2,940,574 | 1.6 |
| Fallang Holding AS | 2,829,694 | 1.5 |
| Isco AS | 2,205,604 | 1.2 |
| Arild Bødal | 1,829,095 | 1.0 |
| Jens Backhaus | 1,704,943 | 0.9 |
| Flagstad Invest AS | 1,695,613 | 0.9 |
| Nordnet Pension Insurance | 1,247,506 | 0.7 |
| Evli Fund Management | 1,208,225 | 0.7 |
| Mats Lönnqvist | 1,202,962 | 0.7 |
| Top 20 shareholders | 145,372,348 | 79.6 |
| Own shares | 182,871 | 0.1 |
| Other | 37,127,521 | 20.3 |
| Total | 182,682,740 | 100.0 |
Contact information
Henrik Norrbom, Group CEO Tel: +46 727 08 15 15 [email protected]
Stein Yndestad, Group CFO Tel: +47 916 86 696 [email protected]
Financial calendar
Annual report 2023 April 22, 2024 Interim report January-March 2024 May 22, 2024 Annual General Meeting 2024 May 22, 2024 Interim report January-June 2024 August 15, 2024 Interim report January-September 2024 November 15, 2024 Year-end report January-December 2024 February 19, 2025
