FOURTH QUARTER 2016 RESULTS
Christian Nørgaard Madsen, CEO | Anne Harris, CFO
multiconsult.no
DISCLAIMER
This presentation includes forward-looking statements which are based on our current expectations and projections about future events. All statements other than statements of historical facts included in this presentation, including statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditures, projected costs and our plans and objectives for future operations, including our plans for future costs savings and synergies may be deemed to be forward-looking statements. Words such as "believe," "expect," "anticipate," "may," "assume," "plan," "intend," "will," "should," "estimate," "risk" and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. You should not place undue reliance on these forward-looking statements. In addition any forwardlooking statements are made only as of the date of this notice, and we do not intend and do not assume any obligation to update any statements set forth in this presentation.
INTRODUCTION AND HIGHLIGHTS
Christian Nørgaard Madsen, CEO
Highlights
- Strong full year 2016 revenue growth of 16% ‒ 5% organic growth
- Fourth quarter impacted by higher operating expenses and project write-downs
- Acquisition of aarhus arkitekterne completed in line with 3-2-1 GO strategy
- Proposed dividend for 2016 of NOK 3.00 per share
- Defined benefit pension plan discontinued
multiconsult.no
Successful acquisition of aarhus arkitekterne
- In line with 3-2-1 GO strategic objectives
- ─ Strengthening our capabilities within health buildings and urbanism in Scandinavia
- Danish architect company established in 1909
- ‒ market leader within health buildings in Denmark
- ‒ well established in the Scandinavian market
- ‒ strong track-record within large-scale projects
- Integrated with LINK arkitektur 1 January 2017
- Purchase price of DKK 49.2 million
Financial summary 4Q 2016
- Net operating revenue up 5.5% y-o-y to NOK 685.5 million
- Increased workforce in Norway
- Improved activity from International segment and LINK arkitektur
- Stable billing ratio at 69.0%
- Billing rates at a similar level as last year
- Write-downs on certain projects
- EBIT of NOK 18.9 million, 2.8% margin *
- Higher operating expenses
- Increased employee cost not reflected in billing rates
Financial summary 2016
- Net operating revenue up 15.9% to NOK 2 604.6 million
- EBIT amounted to NOK 182.3 million *
- EBIT margin at 7.0% *
- Proposed 2016 dividend increased to NOK 3.00 per share
- Reflecting underlying cash generation
- In line with dividend policy
Key ongoing projects 4Q 2016
• Prinsensgate 26 Rehabilitation
- Hydro Karmøy
- Mount Coffee Hydropower
- New Airbase Ørland
Order intake 4Q 2016
Highlights
- Order intake increased by 28.1 % to NOK 947.1 million
- Increased order intake in all business areas except T&I
- LINK arkitektur increased by NOK 118.9 million
- ─ NOK 49.0 million from the inclusion of backlog of aarhus arkitekterne
Key order intake
- New Airbase Ørland
- Åsane high school
- Campus Ås
- Concept study E39 Bjørnafjorden
- Tvedestrand high school
Order backlog development per business area
- Strong order backlog up 3.8% y-o-y to NOK 1 793.1 million
- LINK arkitektur increased by 140.0% y-o-y
- ─ Inclusion of aarhus arkitekterne contributes with NOK 49.0 million
- Call-offs on frame agreements only included when signed
- ─ Major new frame agreements within T&I from Norwegian Public Roads Administration
Organisation
- Successful share purchase programme for employees
- 34% of employees across the Multiconsult group participated
- 48% of group employees hold shares
- Multiconsult is ranked as an attractive employer Universum Survey 2016
-
4 in Norway for students and seasoned professionals
-
1 among consultants for students
- NGF award 2015 won by Jesper Bjerre for his master thesis *
- Stable organisation
- Employee turnover at 6.4% (parent company at 7.2%)
- * Norsk Geoteknisk Forening/Norwegian Geotechnical Society
FINANCIAL REVIEW
Anne Harris, CFO
Financial highlights 4Q 2016
- NOK 685 million
- Stable billing ratio and billing rates
-
Project write-downs
-
NOK 19 million
- Important initiatives for future efficiency
- Increased employee cost not reflected in billing rates
*Underlying
Segments 4Q 2016
Greater
Oslo Area |
4Q 2016 |
4Q 2015 |
Change |
|
| EBIT MNOK |
14.1 |
37.8 |
37% |
|
| EBIT margin % |
4.5% |
12.6% |
8.1 pp |
|
Billing
ratio |
67.6% |
71.2% |
3.6 pp |
|
Number
of
employees |
879 |
833 |
6% |
|
| Regions Norway |
4Q 2016 |
4Q 2015 |
Change |
| EBIT MNOK |
-4.6 |
4.4 |
<100% |
| EBIT margin % |
-1.8% |
1.8% |
3.6
pp |
Billing
ratio |
67.7% |
66.9% |
0.8 pp |
Number
of
employees |
793 |
756 |
5% |
| International |
4Q 2016 |
4Q
2015 |
Change |
| EBIT MNOK |
6.2 |
-1.5 |
>100% |
| EBIT margin % |
20.0% |
-8.0% |
28 pp |
Billing
ratio |
71.9% |
57.8% |
14.1
pp |
Number
of
employees |
130 |
108 |
20% |
LINK
arkitektur |
4Q 2016 |
4Q 2015 |
Change |
| EBIT MNOK |
3.8 |
0.1 |
>100% |
| EBIT margin % |
4.0% |
0.1% |
3.9 pp |
Billing
ratio |
75.5% |
71.3% |
4.2 pp |
Number
of
employees |
420 |
330 |
27% |
Financial highlights 2016
- Strong revenue growth and solid earnings
- Net operating revenues at NOK 2 604.6 million
- Primarily driven by acquisitions, organic growth and solid operations
- EBIT at NOK 182.3 million *
- Higher operating expenses due to increased headcount, office rent, IT and other operating expenses
- Increased employee cost not reflected in billing rates
- LINK arkitektur new full year contribution with 2.9% margin
Operating revenues by business area FY 2016
Cash flows year to date 2016
- Cash balance remains positive
- Solid operations
- Higher working capital due to higher revenues
- Investments
- Acquisition of Akvator AS
- Acquisition of aarhus arkitekterne
- Ordinary asset replacement
- Financing
- Dividend payment NOK 76.1 million
- Increased debt due to acquisitions
- Employee share purchase programme
Industry outlook
- Industry reports optimistic expectations going forward
- Recent market reports from RIF and arkitektbedriftene * **
- Improvement in order backlog especially within B&P, T&I and Energy
"The expectations going forward have not been at such a high level since spring 2013" - RIF economic report 2016
- Multiconsult experiences strong prospect pipeline
- Transportation, Buildings & Properties and architecture in Norway
- International Renewable energy
*Rådgivende ingeniørers forening/Association of Consulting Engineers, Norway **The Association of Consulting Architects in Norway
Outlook
- The overall market outlook for 2017 is fairly positive
- Continued strong competition and price pressure on large projects
- Market rates have stabilised
- More expensive workforce in Norway puts pressure on profitability
- Strong combination of professional capability and solid order backlog
- Continued focus on sales efforts, project execution and billing ratio
- Active and systematic implementation of the 3-2-1 GO strategy
FINANCIAL CALENDAR
Annual
report 2016 |
20
Apr
2017 |
|
Annual
General Meeting |
11 May 2017 |
|
| 1Q 2017 results: |
22
May 2017 |
|
| 2Q 2017 results: |
31
Aug
2017 |
|
| 3Q 2017 results: |
9
Nov 2017 |
|
Q&A
FOURTH QUARTER 2016 RESULTS | Christian Nørgaard Madsen, CEO Anne Harris, CFO
Appendix
FOURTH QUARTER 2016 RESULTS | Christian Nørgaard Madsen, CEO Anne Harris, CFO
| Amounts in MNOK (except percentage) |
Q4 2016 |
Q4 2015 |
FY 2016 |
FY 2015 |
|
|
|
|
|
| Net operating revenues |
685.5 |
649.4 |
2 604.6 |
2 2 4 7 . 7 |
| Reported employee benefit expenses |
431.2 |
496.6 |
1841.6 |
1 649.2 |
| Curtailment of defind benefit pension plan |
$-107.3$ |
|
-107.3 |
|
| Underlying employee benefit expenses |
538.6 |
496.6 |
1948.9 |
1649.2 |
| Reported other operating expenses |
117.2 |
101.6 |
430.2 |
385.7 |
| IPO expenses |
|
|
|
50.7 |
| Underlying other operating expenses |
117.2 |
101.6 |
430.2 |
335.0 |
| Underlying operating expenses |
655.8 |
598.2 |
2 3 7 9 . 1 |
1984.2 |
| EBITDA underlying |
29.7 |
51.2 |
225.5 |
263.4 |
| Depreciation, amortisation and impairments |
10.8 |
10.4 |
43.2 |
37.6 |
| EBIT, underlying |
18.9 |
40.8 |
182.3 |
225.8 |
| EBITDA margin (%), underlying |
4.3% |
7.9% |
8.7% |
11.7 % |
| EBIT margin (%), underlying |
2.8% |
6.3% |
7.0% |
10.0% |
Operating revenues by business area 4Q 2016