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Bouvet

Quarterly Report Nov 9, 2017

3563_rns_2017-11-09_056b0cfd-d8de-4383-958b-69b402848dfc.pdf

Quarterly Report

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Key figures

NOK MILLION JUL-SEP 2017 JUL-SEP 2016 CHANGE % JAN-SEP 2017 JAN-SEP 2016 CHANGE % YEAR 2016
Revenue 344.2 280.4 22.8 % 1 149.0 948.6 21.1 % 1 330.8
Operating profit (EBIT) 17.1 12.1 41.0 % 95.0 73.4 29.5 % 106.3
Ordinary profit before tax 17.0 11.4 48.9 % 96.1 72.8 31.9 % 106.0
Profit for the period 12.5 8.2 52.8 % 72.4 53.6 35.1 % 79.9
Net cash flow operations -2.5 -13.7 N/A -9.5 -5.8 N/A 113.5
Cash and cash equivalents 41.6 62.1 -33.1 % 41.6 62.1 -33.1 % 161.7
Number of employees (end of period) 1 211 1 045 15.9 % 1 211 1 045 15.9 % 1 090
Number of employees (average) 1 193 1 038 15.0 % 1 157 1 036 11.7 % 1 050
Earnings per share 1.23 0.81 52.6 % 7.05 5.19 35.8 % 7.76
Diluted earnings per share 1.22 0.80 52.9 % 6.97 5.12 36.0 % 7.66
EBIT-margin 5.0 % 4.3 % 8.3 % 7.7 % 8.0 %
Equity ratio 34.2 % 34.0 % 34.2 % 34.0 % 32.9 %

Bouvet in brief

Bouvet is a consultancy delivering digital services. At 30 September, it had 1 211 employees at 15 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 third quarter

Important delivery to Statnett and Svenska Kraftnät
Signed important frame agreement with Norwegian Tax
Administration
Signed important frame agreement with City of Oslo
Increase in number of assignment for the oil and gas sector
Operating revenues up by NOK 63.9 million or 22.8 per cent
from the third quarter of 2016 to NOK 344.2 million
Operating profit (EBIT) up by 41 per cent to NOK 17.1 million
from the same period of last year
Employees up by 45 from 31 March and by 166 over the past

12 months

CEO's comments Profitable growth in a good market

We have delivered a good interim result. Digitalisation is continuing, and major projects are being implemented in both public and private sectors. The assignments and projects won during the quarter reveal increasing demand for our services and expertise among clients. We jointly develop new solutions which help to change, renew and improve their operations. With the aid of new technology, clients are enabled to change their business models, develop new services and become more efficient.

Demand is good in every region and in all the sectors we work in. After a couple of years with declining demand from the oil industry, we are seeing a growing commitment to developing and implementing new technology in this sector. We have secured a number of new assignments from such companies as Statoil. Our big industrial clients are adopting machine learning and artificial intelligence, and we are able to participate in exciting projects. Machine learning and artificial intelligence are now being utilised more and more in every sector, and our national commitment earned us more assignments during the quarter. Work on digitalisation is continuing in the public sector, and we are involved in a number of digitalisation projects at central and local government levels. We also won a number of new frame agreements during the quarter.

Our customer satisfaction survey during the quarter showed that we have satisfied customers who are committed to us as a long-term partner. That reflects our continuous development of services, our sharing culture and our approach to collaboration. We have conducted an employee survey which once again shows that our people thrive fantastically well. This poll identifies the professional environment, client assignments and our corporate culture as the most

important reasons why personnel work and thrive in our group. We have acquired a number of new colleagues over the past year and during the third quarter. More of these than before are new graduates who contribute positively to our development. The attention we are paying to recruitment from higher education institutions has allowed us to climb Universum's lists of attractive employers for new graduates and young professionals.

The future looks bright for us. We are continuing to make rapid progress, and clients will need our support for a long time to come. Sticking to our ambition of being the most credible company with the most satisfied employees and clients thereby remains important. We achieve this through close collaboration with our clients, through the development of new services and expertise, and not least through communicating and continuing to develop our corporate culture. The good results will then also continue.

Sverre Hurum President and CEO

" Digitalisation is continuing, and assignments during the quarter reveal increasing demand for our services from clients. "

Financial results

Operating revenues

Bouvet had operating revenues of NOK 344.2 million for the third quarter, compared with NOK 280.4 million in the same period of 2016. That represented a rise of 22.8 per cent. Fee income generated by the group's own consultants increased by NOK 50.5 million or 21.5 per cent from the third quarter of last year. Fee income generated by sub-contractors rose by NOK 11.4 million or 32.2 per cent from the same period of 2016. Other revenues rose by NOK 2 million from the third quarter of last year to NOK 12.4 million.

The third quarter of 2017 had one fewer working days than the same period of last year. That had a negative effect of NOK 3.5 million on operating revenues generated by Bouvet's own employees. Increased holidays and sickness absence had a further negative effect of NOK 1.8 million. Overall, these factors had an negative effect of NOK 5.3 million on operating revenues generated by the group's own employees compared with the third quarter of 2016.

Operating revenues generated by own employees benefited by NOK 6.2 million through an increase of two percentage points in the billing ratio for the group's consultants compared with the third quarter of 2016. They were also boosted by NOK 35.4 million through a 15 per cent rise in the average number of employees. Rates for the group's hourly based services rose by 2.1 per cent compared with the same period of last year, which increased operating revenues by NOK 4.7 million. In addition, improved progress in fixed-price projects compared with the third quarter of 2016 made a positive contribution of NOK 6.7 million. Fewer employees on paternity leave during the quarter added NOK 2.8 million to revenues. The overall positive effect of these factors on operating revenues was NOK 55.8 million.

Sales to existing clients made good progress during the quarter. Clients who also used the group in the third quarter of 2016 accounted for 92 per cent of operating revenues. In addition, clients acquired since 30 September 2016 contributed a total of NOK 27.9 million to third-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 13.5 per cent in the third quarter, compared with 12.6 per cent in the same period of 2016.

Where the first nine months are concerned, operating revenues amounted to NOK 1 149 million compared with NOK 948.6 million for the same period of 2016. That represented a rise of 21.1 per cent. Fee income generated by the group's own consultants increased by NOK 148.3 million or 18.6 per cent from the first nine months of last year. This primarily reflected an 11.7 per cent expansion in the average number of employees, a growth of 2.6 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, revenues generated by sub-contractors rose by NOK 50.7 million from the same period of 2016.

Operating costs

Bouvet's operating costs, including depreciation and amortisation, were NOK 327.2 million for the third quarter, up from NOK 268.3 million in the same period of 2016. That represented an increase of 22 per cent. Payroll costs increased because the average number of employees rose, in addition to the general growth in pay rates. The group

Operating profit (EBIT)

Number of employees (end of quarter)

experienced a general rise in pay of 0.6 per cent over the past 12 months. The cost of sales was NOK 50.4 million, compared with NOK 36 million for the third quarter of 2016, and primarily comprised procurement of sub-contractor services and software as well as the hire of course instructors. Other operating expenses grew by 27.3 per cent from the same period of 2016 to NOK 42.6 million. This rise primarily reflected greater social security costs, higher costs for renting and operating premises, and increased ICT expenses.

Where the first nine months were concerned, overall operating costs rose by 20.4 per cent from the same period of 2016 to NOK 1 053.9 million. The cost of sales increased by 41.3 per cent to NOK 174.7 million, primarily because greater use was made of sub-contractors. Payroll costs rose by 14.7 per cent from the first nine months of last year to NOK 746.2 million. Other operating expenses came to NOK 117.4 million in the first nine months. This rise of NOK 27 million from the same period of 2016 primarily reflected higher costs for recruitment, social events, office premises and ICT.

Profit

Operating profit (EBIT) for the third quarter came to NOK 17.1 million, compared with NOK 12.1 million in the same period of 2016. The EBIT margin was thereby five per cent, compared with 4.3 per cent in the third quarter of last year. Net profit came to NOK 12.5 million, up from NOK 8.2 million in the same period of 2016. Diluted earnings per share were NOK 1.22, compared with NOK 0.80 in the third quarter of last year.

Cumulative operating profit for the first nine months came to NOK 95 million, up by 29.5 per cent from NOK 73.4 million in the same period of 2016. The EBIT margin was thereby 8.3 per cent, compared with 7.7 per cent in the first nine months of last year. Net profit came to NOK 72.4 million, up from NOK 53.6 million in the same period of 2016. Diluted earnings per share were NOK 6.97, compared with NOK 5.12 in the first nine months of last year.

Cash flow, liquidity and capital adequacy

Consolidated cash flow from operations was negative at NOK 2.5 million for the third quarter, compared with a negative NOK 13.7 million in the same period of 2016. Cash flow for the quarter was affected negatively by an increase of NOK 7.8

million from the second quarter of 2017 in working capital related to client receivables, work in progress and other current receivables. A reduction of NOK 14.1 million in current liabilities from the second quarter of this year also had a negative impact on cash flow. Consolidated cash flow from operations for the first nine months was negative at NOK 9.5 million, compared with a negative NOK 5.8 million for the first nine months of last year. Consolidated cash flow from operations over the past 12 months came to NOK 108.9 million, while net profit for the same period was NOK 98.7 million.

The group's client portfolio consists mainly of large, solid listed companies and public enterprises. No bad debts were suffered in the third quarter, and the group has good oversight and control of its receivables.

The group has no interest-bearing debt. Bank deposits at 30 September totalled NOK 41.6 million, compared with NOK 62.1 million a year earlier. The group had an undrawn overdraft facility of NOK 50 million at 30 September. Bouvet held 168 682 of its own shares at 30 September. Equity at 30 September totalled NOK 170.8 million, representing an equity ratio of 34.2 per cent. The corresponding figures for 30 September 2016 were an equity of NOK 141.1 million and an equity ratio of 34 per cent. Bouvet's long-term target is to maintain an equity ratio in excess of 30 per cent.

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: 48.7 %

Turnover from customer wholly or partially private owned: 51.3 %

Public admin 26.2 %
Oil & gas 22.1 %
Transportation 10.2 %
Power supply 9.0 %
Service industry 6.4 %
Retail 6.3 %
Info and communication 5.7 %
Industry 5.1 %
Bank & finance 4.1 %
Health 2.6 %
Other 2.4 %

Developments and market

A continued commitment to digitalisation and digital transformation generated a high level of demand for Bouvet's services and expertise during the quarter. A new agreement was signed, for example, with the Norwegian Metrology Service for developing its administrative procedures, and Bouvet was also chosen by the National Library of Norway to develop an e-reader for mobile units and a prisoner register for the Falstad Centre.

Bouvet's ability to deliver, expertise, corporate culture and understanding of client issues and needs create confidence among new and existing clients. Those renewing frame agreements during the quarter included Bane NOR, the City of Oslo, the Norwegian Tax Administration, the City of Trondheim and the Norwegian Environment Agency.

Bouvet works closely with the business side in many sectors. Its clients are user-centred, which increases demand for Bouvet's expertise on innovation and service design. The City of Bergen has given Bouvet the opportunity to help develop services for the disabled. Furthermore, Sweden's Financial Supervisory Authority has hired the group in connection with a new intranet.

Service design has also become important in the oil and gas industry. Generally speaking, Bouvet is experiencing growth in this sector, and it entered into a contract with Statoil on collaboration over an internet of things (IoT) project which will allow more jobs to be done from land.

Bouvet's consultancy expertise on implementing digital transformations also expanded during the quarter. Services in demand are enterprise architecture for securing delivery and restructuring abilities at clients, digital strategy, business development and change management. Bouvet was hired to provide consultancy and project management by Swedish local authorities and county councils as well as by the Norwegian Directorate for Children, Youth and Family Affairs.

Consultancy support is provided to Sykhuspartner, the Norwegian Government Security and Service Organisation (DSS) and the health agency of the City of Oslo. The attention paid by clients to security and testing meant a high level of demand for this expertise from Bouvet. The City of Trondheim and Sør-Trøndelag county council have sought this expertise. Implementing technology trends is enhancing the need for information security, and Bouvet has again been chosen as a partner in this area for a number of clients.

During the quarter, Bouvet delivered a report on behalf of the Norwegian Consumer Council which looked at consumer and personal safeguards in blood pressure monitors.

Bouvet secured a number of assignments for process management and Lean in the quarter, and Agile teams from Bouvet were in demand in Sweden from such clients as the Swedish Migration Agency and the Swedish Public Employment Service.

To prepare its clients for the EU's general data protection regulation (GDPR) during the quarter, Bouvet held breakfast and company-specific seminars and was present in the media and at conferences. This consciousness-raising increased demand for GDPR expertise. Sesam, Bouvet's data integration product, has been positioned as an important player in the introduction of the regulation.

Bouvet is involved in a number of projects which utilise artficial intelligence and machine learning. It is contributing at Kinect Energy to a project on better wind forecasts for wind farms, and is involved in highly interesting projects with the Norwegian Public Roads Administration and Statoil. Bouvet's expertise with software robots has resulted in new assignements for example at Sør-Trøndelag county council.

Bouvet had a presence in the media 44 times during the quarter.

A good corporate culture and a high level of job satisfaction among employees combined with Bouvet's regional model to give good organic growth during the quarter. Personnel increased by 45 from the previous three-month period. At 30 September, Bouvet had 1 211 employees – up by 166 from a year earlier.

Client demand for Bouvet's expertise 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, but Bouvet is able to attract relevant candidates in all age segments and service areas. It is succeeding with its presence in higher education institutions and has recruited many new graduates. Directed at this group, Bouvet's Innafor onboarding programme was launched during the quarter. It ensures than participants quickly become part of the Bouvet culture. In Sweden, recruitment is being pursued in the health sector to increase expertise in an area where demand is high.

As a knowledge-based group, Bouvet devotes attention to expertise development. Important arenas include internal schools for professional enhancement and certification as well as inspiration for further development. A joint conference on AI was staged during the quarter with participants from all the regions.

Bouvet's relevant expertise and topical projects help to enhance its visibility in the media. Employees were represented with expert statements on such issues as GDPR and security. In addition, deliveries from Bouvet have occupied a key place in public debates.

The decision was taken during the quarter to close the business in Malmö, affecting 16 employees. The closure will be implemented in the fourth 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

The attention given by Bouvet's clients to service development, cost-effective deliveries and automation will mean continued high investment in digitalisation. New technology and project execution lay the basis for customer- and market-centred developments with a high pace of innovation. Technology is being applied to a greater extent in developing good user experiences, with the user no longer needing to be involved but getting the service delivered on the basis of data. A key role in future development will be played by data in relation to artficial intelligence and machine learning.

This development will mean continued high demand for technology expertise. Bouvet's range of services, long-term client relations and an organisational structure with a rapid response to changes have proven valuable for clients. The high level of demand calls for continued recruitment in strong competition with other players.

The GDPR comes into force in May 2018. Sesam, Bouvet's data integration product, has strengthened its market position in this area.

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 third quarter of 2017 and the preliminary accounts for 1 January-30 September 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, 9 November 2017 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
JUL-SEP
2017
UNAUDITED
JUL-SEP
2016
CHANGE CHANGE % UNAUDITED
JAN-SEP
2017
UNAUDITED
JAN-SEP
2016
CHANGE CHANGE % YEAR 2016
Revenue 344 240 280 375 63 865 22.8 % 1 148 954 948 550 200 404 21.1 % 1 330 811
Operating expenses
Cost of sales 50 412 35 970 14 442 40.2 % 174 665 123 627 51 038 41.3 % 183 002
Personell expenses 228 884 195 338 33 546 17.2 % 746 219 650 683 95 536 14.7 % 897 355
Depreciation fixed assets 3 277 2 523 754 29.9 % 9 397 7 491 1 906 25.4 % 10 001
Amortisation intangible assets 2 023 992 1 031 103.9 % 6 268 2 971 3 297 111.0 % 4 588
Other operating expenses 42 575 33 450 9 125 27.3 % 117 381 90 391 26 990 29.9 % 129 567
Total operating expenses 327 171 268 273 58 898 22.0 % 1 053 930 875 163 178 767 20.4 % 1 224 513
Operating profit 17 069 12 102 4 967 41.0 % 95 024 73 387 21 637 29.5 % 106 298
Financial items
Interest income 396 321 75 23.4 % 986 1 147 -161 -14.0 % 1 315
Financial income 106 98 8 8.2 % 994 281 713 253.7 % 553
Interest expense -72 -79 7 -8.9 % -113 -183 70 -38.3 % -265
Finance expense -506 -1 030 524 -50.9 % -800 -1 783 983 -55.1 % -1 852
Net financial items -76 -690 614 -89.0 % 1 067 -538 1 605 -298.3 % -249
Ordinary profit before tax 16 993 11 412 5 581 48.9 % 96 091 72 849 23 242 31.9 % 106 049
Income tax expense
Tax expense on ordinary profit 4 458 3 207 1 251 39.0 % 23 739 19 278 4 461 23.1 % 26 164
Total tax expense 4 458 3 207 1 251 39.0 % 23 739 19 278 4 461 23.1 % 26 124
Profit for the period 12 535 8 205 4 330 52.8 % 72 352 53 571 18 781 35.1 % 79 885
Assigned to:
Shareholders in parent company 12 413 8 155 71 439 52 961 78 887
Non-controlling interests 122 50 913 610 998
Diluted earnings per share 1.22 0.80 0.42 52.9 % 6.97 5.12 1.85 36.0 % 7.66
Earnings per share 1.23 0.81 0.43 52.6 % 7.05 5.19 1.86 35.8 % 7.76

Consolidated statement of other income and costs

NOK 1 000 UNAUDITED
JUL-SEP
2017
UNAUDITED
JUL-SEP
2016
CHANGE CHANGE % UNAUDITED
JAN-SEP
2017
UNAUDITED
JAN-SEP
2016
CHANGE CHANGE % YEAR 2016
Profit for the period 12 535 8 205 4 330 52.8 % 72 352 53 571 18 781 35.1 % 79 885
Items that may be reclassified through
profit or loss in subsequent periods
Currency translation differences -67 -136 68 N/A 57 -446 503 N/A -346
Sum other income and costs -67 -136 68 N/A 57 -446 503 N/A -346
Total comprehensive income 12 468 8 069 4 398 54.5 % 72 409 53 125 19 284 36.3 % 79 539
Assigned to:
Shareholders in parent company 12 346 8 019 71 496 52 516 78 542
Non-controlling interests 122 50 913 610 998

Consolidated balance sheet

NOK 1 000 UNAUDITED
30.09.2017
UNAUDITED
30.09.2016
CHANGE CHANGE % 31.12.2016
ASSETS
NON-CURRENT ASSETS
Intangible assets
Deferred tax asset 152 1 332 -1 180 -88.6 % 0
Goodwill 33 247 27 554 5 693 20.7 % 32 782
Other intangible assets 28 242 21 937 6 305 28.7 % 25 032
Total intangible assets 61 641 50 823 10 818 21.3 % 57 814
Fixed assets
Office equipment 17 738 8 050 9 688 120.3 % 13 430
Office machines and vehicles 3 694 2 491 1 203 48.3 % 3 283
IT equipment 17 393 10 171 7 222 71.0 % 14 949
Total fixed assets 38 825 20 712 18 113 87.5 % 31 662
Financial non-current assets
Other financial assets 116 11 105 954.5 % 11
Other long-term receivables 1 932 859 1 073 124.9 % 859
Total financial non-current assets 2 048 870 1 178 135.4 % 870
Total non-current assets 102 514 72 405 30 109 41.6 % 90 346
CURRENT ASSETS
Work in progress
123 328 25 120 20.4 % 97 728
Trade accounts receivable 148 448 137 380 46 339 33.7 % 159 133
183 719
Other short-term receivables 23 034 19 535 3 499 17.9 % 26 990
Cash and cash equivalents 41 595 62 139 -20 544 -33.1 % 161 719
Total current assets 396 796 342 382 54 414 15.9 % 445 570
TOTAL ASSETS 499 310 414 787 84 523 20.4 % 535 916

Consolidated balance sheet

NOK 1 000 UNAUDITED
30.09.2017
UNAUDITED
30.09.2016
CHANGE CHANGE % 31.12.2016
EQUITY AND LIABILITIES
EQUITY
Paid-in capital
Share capital 10 250 10 250 0 0.0 % 10 250
Own shares - nominal value -169 -241 72 N/A -99
Share premium fund 10 000 10 000 0 0.0 % 10 000
Total paid-in capital 20 081 20 009 72 0.4 % 20 151
Earned equity
Other equity 148 130 117 805 30 325 25.7 % 152 378
Total earned equity 148 130 117 805 30 325 25.7 % 152 378
Non-controlling interests 2 542 3 241 -699 -21.6 % 3 629
Total equity 170 753 141 055 29 698 21.1 % 176 158
DEBT
Long-term debt
Other provisions for obligations 0 114 -114 -100.0 % 57
Total long-term debt 0 114 -114 -100.0 % 1 578
Short-term debt
Trade accounts payable 55 552 35 149 20 403 58.0 % 61 128
Income tax payable 19 512 21 938 -2 426 -11.1 % 21 944
Public duties payable 111 386 94 068 17 318 18.4 % 126 258
Other short-term debt 142 107 122 463 19 644 16.0 % 148 850
Total short-term debt 328 557 273 618 54 939 20.1 % 358 180
Total liabilities 328 557 273 732 54 825 20.0 % 359 758
TOTAL EQUITY AND LIABILITIES 499 310 414 787 84 523 20.4 % 535 916

Consolidated statement of cash flows

NOK 1 000 UNAUDITED
JUL-SEP 2017
UNAUDITED
JUL-SEP 2016
UNAUDITED
JAN-SEP 2017
UNAUDITED
JAN-SEP 2016
YEAR 2016
Cash flow from operating activities
Ordinary profit before tax 16 994 11 412 96 091 72 849 106 049
Paid tax -5 -2 -26 552 -24 250 -27 016
(Gain)/loss on sale of fixed assets -3 -2 -161 -4 1 257
Ordinary depreciation 3 278 2 523 9 397 7 491 10 001
Amortisation intangible assets 2 023 992 6 268 2 971 4 588
Share based payments 1 596 1 452 4 787 4 355 5 826
Changes in work in progress, accounts receivable and accounts payable -9 518 -2 742 -80 882 -35 546 -5 720
Changes in other accruals -16 824 -27 326 -18 472 -33 690 18 476
Net cash flow from operating activities -2 460 -13 693 -9 523 -5 824 113 462
Cash flows from investing activities
Sale of fixed assets 100 7 955 129 405
Purchase of fixed assets -4 101 -2 222 -17 353 -6 700 -21 696
Purchase of intangible assets -3 098 -2 568 -9 263 -7 276 -9 191
Purchase of business 0 0 0 0 -7 343
Net cash flow from investing activities -7 099 -4 782 -25 661 -13 847 -37 826
Cash flows from financing activities
Purchase of own shares -4 890 -25 095 -11 190 -25 095 -25 095
Sales of own shares 0 0 0 0 8 436
Dividend payments 0 -385 -73 750 -67 395 -67 395
Net cash flow from financing activities -4 890 -25 480 -84 940 -92 490 -84 054
Net changes in cash and cash equivalents -14 449 -43 955 -120 124 -112 161 -8 419
Cash and cash equivalents at the beginning of the period 56 044 106 094 161 719 174 300 170 138
Cash and cash equivalents at the end of the period 41 595 62 139 41 595 62 139 161 719

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 -297 150 998 3 401 174 618
Profit for the period 0 52 961 52 961 610 53 571
Other income and costs 0 -446 -446 -446
Purchase/sale of own shares (net) -210 -210 -24 885 -24 885 -25 095
Employee share scheme 0 5 801 5 801 5 801
Dividend 0 -66 625 -66 625 -770 -67 395
Equity at 30.09.2016 (Unaudited) 10 250 -241 10 000 20 009 118 547 -743 117 805 3 241 141 055
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 71 439 71 439 913 72 352
Other income and costs 0 57 57 57
Purchase/sale of own shares (net) -70 -70 -11 120 -11 120 -11 190
Employee share scheme 0 7 126 7 126 7 126
Dividend 0 -71 750 -71 750 -2 000 -73 750
Equity at 30.09.2017 (Unaudited) 10 250 -169 10 000 20 081 148 716 -586 148 130 2 543 170 753

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.

Key figures Group

NOK 1 000 JUL-SEP 2017 JUL-SEP 2016 CHANGE % JAN-SEP 2017 JAN-SEP 2016 CHANGE % YEAR 2016
INCOME STATEMENT
Operating revenue 344 240 280 375 22.8 % 1 148 954 948 550 21.1 % 1 330 811
EBITDA 22 369 15 617 43.2 % 110 689 83 849 32.0 % 120 887
Operating profit (EBIT) 17 069 12 102 41.0 % 95 024 73 387 29.5 % 106 298
Ordinary profit before tax 16 993 11 412 48.9 % 96 091 72 849 31.9 % 106 049
Profit for the period 12 535 8 205 52.8 % 72 352 53 571 35.1 % 79 885
EBITDA-margin 6.5 % 5.6 % 16.7 % 9.6 % 8.8 % 9.0 % 9.1 %
EBIT-margin 5.0 % 4.3 % 14.9 % 8.3 % 7.7 % 6.9 % 8.0 %
BALANCE SHEET
Non-current assets 102 514 72 405 41.6 % 102 514 72 405 41.6 % 90 346
Current assets 396 796 342 382 15.9 % 396 796 342 382 15.9 % 445 570
Total assets 499 310 414 787 20.4 % 499 310 414 787 20.4 % 535 916
Equity 170 753 141 055 21.1 % 170 753 141 055 21.1 % 176 158
Long-term debt 0 114 -100.0 % 0 114 -100.0 % 1 578
Short-term debt 328 557 273 618 20.1 % 328 557 273 618 20.1 % 358 180
Equity ratio 34.2 % 34.0 % 0.6 % 34.2 % 34.0 % 0.6 % 32.9 %
Liquidity ratio 1.21 1.25 -3.5 % 1.21 1.25 -3.5 % 1.24
CASH FLOW
Net cash flow operations -2 460 -13 693 N/A -9 523 -5 824 N/A 113 462
Net free cash flow -9 559 -18 475 N/A -35 184 -19 671 N/A 75 636
Net cash flow -14 449 -43 955 N/A -120 124 -112 161 N/A -8 419
Cash flow margin -0.7 % -4.9 % N/A -0.8 % -0.6 % N/A 8.5 %
SHARE INFORMATION
Number of shares 10 250 000 10 250 000 0.0 % 10 250 000 10 250 000 0.0 % 10 250 000
Weighted average basic shares outstanding 10 105 448 10 162 922 -0.6 % 10 130 292 10 199 960 -0.7 % 10 171 365
Weighted average diluted shares outstanding 10 222 674 10 298 046 -0.7 % 10 247 518 10 335 084 -0.8 % 10 304 661
EBIT per share 1.67 1.18 41.3 % 9.26 7.11 30.2 % 10.32
Diluted EBIT per share 1.65 1.17 41.5 % 9.15 7.02 30.4 % 10.19
Earnings per share 1.23 0.81 52.6 % 7.05 5.19 35.8 % 7.76
Diluted earnings per share 1.22 0.80 52.9 % 6.97 5.12 36.0 % 7.66
Equity per share 16.66 13.76 21.1 % 16.66 13.76 21.1 % 17.19
Dividend per share 0.00 0.00 N/A 7.00 6.50 7.7 % 6.50
EMPLOYEES
Number of employees (year end) 1 211 1 045 15.9 % 1 211 1 045 15.9 % 1 090
Average number of employees 1 193 1 038 15.0 % 1 157 1 036 11.7 % 1 050
Operating revenue per employee 288 270 6.8 % 993 915 8.6 % 1 267
Operating cost per employee 274 258 6.1 % 911 844 7.9 % 1 166
EBIT per employee 14 12 22.7 % 82 71 15.9 % 101

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 15 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 Telephone: +47 23 40 60 00

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

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

MALMÖ

Södergatan 3 SE-211 34 Malmö Telephone: +46 40 636 60 00

ÖREBRO

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

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