Multiconsult

Investor Presentation • Feb 26, 2020

FOURTH QUARTER & FULL YEAR 2019 RESULTS

Grethe Bergly, CEO | Hans-Jørgen Wibstad, CFO

DISCLAIMER

This presentation includes forward-looking statements which are based on our current expectations and projections about future events. All statements other than statements of historical facts included in this presentation, including statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditures, projected costs and our plans and objectives for future operations, including our plans for future costs savings and synergies may be deemed to be forward-looking statements. Words such as "believe," "expect," "anticipate," "may," "assume," "plan," "intend," "will," "should," "estimate," "risk" and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. You should not place undue reliance on these forward-looking statements. In addition any forwardlooking statements are made only as of the date of this notice, and we do not intend and do not assume any obligation to update any statements set forth in this presentation.

INTRODUCTION AND HIGHLIGHTS

Grethe Bergly, CEO

Highlights

• 2019 marks the beginning of a turnaround for Multiconsult

• 18 month nextLEVEL improvement program on-track
• Weak fourth quarter results
• Record-high order backlog
• Continued outstanding solutions to our customers

Financial highlights

4Q 2019

• Good project deliveries and strong order intake
• All-time high order backlog NOK 2 968 million
• Net operating revenues growth of 1.4% to NOK 904.5 million
• Weak EBIT of NOK 8.7 million, impacted by low billing ratio and LINK arkitektur

FY 2019 results

• Net operating revenues growth of 3.0% to NOK 3 436 million
• EBIT of NOK 106.3 million, reflecting a 3.1 % EBIT margin
• Satisfactory order intake/sales
• Proposed dividend of NOK 1.00 per share

Order intake in 4Q 2019

Highlights

• Order intake NOK 1 329 million, second highest since IPO
• Balanced across business areas, normal variations
• Good long-term tender pipeline across most business areas
• Uncertainties in short-term tender pipeline

Key order intake

• E16 Åsbygda Olum (new)
• Railway line No.98 Sucha Chabówka (new)
• Fredrik II high school and Arena (new)
• Haakonsvern (existing)
• Northern Lights (existing)

Order backlog development and backlog per business area

Organisation

• 2 994 employees at 31 December 2019 (up from 2 934 y-o-y)

• New executive management team as of 1 October 2019
• 2019 Universum awards most attractive employer in the industry

  • 1 for seasoned professionals and students in industry

  • 2 overall for all companies in Norway

• Extract of achievements to employees in 4Q
  • Erik Wærner RIF's honorary award "Årets Ildsjel" "(Enthusiast of the year)"
  • Vetle Christensen Birkeland, together with two fellow students - - The Innovation Award at Bygg- og miljødagen 2019
  • Dan Sergei Sukuvara The best railroad master's thesis at Bygg- og miljødagen 2019

FINANCIAL REVIEW

Hans-Jørgen Wibstad, CFO

Financial Highlights 4Q 2019

• Net operating revenues up 1.4 % to NOK 904.5 million
  • Purely organic growth
• EBIT of NOK 8.7 million, 1.0 % margin
  • IFRS 16 effect: + NOK 4.4 million
• Opex* up 1.8 % on higher activity
  • Lower other opex
• Net project write-downs NOK 16.8 million (vs NOK 33.8 million)
  • 1.9 % of net operating revenues (vs 4.1 %)
• NIBD* reduced to NOK 91.6 million (vs NOK 283.0 million end 3Q) Reported

YTD 2019

FY 2018

Financial Highlights FY 2019

• Net operating revenues up 3.0 % to NOK 3 436 million
  • Purely organic growth
  • 3.6 % growth, adjusted for legal settlement with Stortinget
• EBIT NOK 106.3 million, 3.1 % margin
  • Legal settlement, IFRS 16 effect, severance agreements
• Opex* up 3.4 % on higher activity
  • Growth, salary adjustment, general CPI, severance agreements
• Net project write-downs NOK 81.2 million (vs NOK 66.7 million)
  • 2.4 % of net operating revenues (vs 2.0%)
  • 1.8 % adjusted for legal settlement with Stortinget

restructuring costs

settlement

*Excluding IFRS 16

Financial highlights 4Q 2019

EBIT Bridge YTD

MNOK

Greater Oslo Area FY 2019

• Higher activity level and billing rates, but lower billing ratio
• Legal dispute settlement with Stortinget of NOK 20.2 million
• Significant growth within Transportation and Water & Environment
• Decreased order intake in Buildings & Properties and Renewable Energy
• Good opex development

Greater Oslo Area	FY 2019	FY 2018	Change
Net Operating Revenue	1 572.3	1 542.8	1.9 %
EBIT MNOK	71.6	57.5	24.5 %
EBIT margin %	4.6 %	3.7 %	0.9 pp
Adjusted EBIT MNOK*	90.5	57.5	57.4 %
Adjusted EBIT margin %*	5.8 %	3.7 %	2.1 pp
Billing ratio	69.2 %	70.5 %	1.3 pp
Number of employees	1 180	1 176	0.3 %

*Adjusted for IFRS 16 and legal settlement with Stortinget

Regions Norway FY 2019

• Revenue growth
• Higher billing rates
• Significantly lower billing ratio due to delays and stops
• Revenue increased from Transportation and Renewable Energy
• Order intake decreased, especially in Transportation and Buildings & Properties
• Good opex development

Regions Norway	FY 2019	FY 2018	Change
Net Operating Revenue	1 129.5	1 077.6	4.8 %
EBIT MNOK	53.1	50.1	5.9 %
EBIT margin %	4.7 %	4.7 %	-
Adjusted EBIT MNOK*	44.9	50.1	-10.4 %
Adjusted EBIT margin %*	4.0 %	4.7 %	-0.7 pp
Billing ratio	67.9 %	71.4 %	-3.5 pp
Number of employees	875	854	2.5 %

*Adjusted for IFRS 16

International FY 2019

• Higher activity level in Iterio AB and Multiconsult Polska
• Lower average billing rates
• Good order intake and order backlog
• Small loss in the fourth quarter, mainly due to low activity in Multiconsult UK

International	FY 2019	FY 2018	Change
Net Operating Revenue	228.4	198.9	14.8 %
EBIT MNOK	14.7	8.1	82.6 %
EBIT margin %	6.4 %	4.0 %	2.4 pp
Adjusted EBIT MNOK*	14.2	8.1	75.3 %
Adjusted EBIT margin %*	6.3 %	4.0 %	2.3 pp
Billing ratio	70.9 %	72.2 %	-1.4 pp
Number of employees	326	284	14.8 %

*Adjusted for IFRS 16

LINK arkitektur FY 2019

• Increased activity level, variation between units
• Higher average billing ratio
• Solid performance in Norway and improved in Denmark
• Majority of order intake from healthcare buildings
• Loss in fourth quarter in all three countries
  • impacted by write-downs and delays

LINK arkitektur	FY 2019	FY 2018	Change
Net Operating Revenue	535.8	513.1	4.4 %
EBIT MNOK	20.1	13.1	53.8 %
EBIT margin %	3.8 %	2.5 %	1.2 pp
Adjusted EBIT MNOK*	18.3	13.1	39.7 %
Adjusted EBIT margin %*	3.4 %	2.5 %	0.9 pp
Billing ratio	74.0 %	72.7 %	1.3 pp
Number of employees	489	489	-

Cash flow FY 2019

*Shaded areas show IFRS 16 (non-cash) effects on CF from operations-, working capital- and financing

• Solid financial position
  • NOK 320 million undrawn facilities
• Renegotiated terms of loan facilities with Nordea
  • Improved margins and covenants
    • max gearing improved from 2.0x to 3.0x
  • New 3-year NOK 200 million RCF replacing term-loan
• Stable working capital year-on-year
• Improved NIBD in 4Q to NOK 91.6 million

Cash and liabilities MNOK	4Q 2019	3Q 2019	2Q 2019	1Q 2019	4Q 2018
Cash	69.7	26.2	31.4	48.8	138.9
Gross debt	914.6	1 247.5	199.3	235.3	198.4
Net interest bearing debt (ex IFRS 16 leasing debt)	91.6	283.0	167.9	186.6	59.5

Dividend payout ratio Adjusted for Stortinget

• Consistent historical dividend payout
• NOK 1.00 per share proposed for 2019 results
• Payout ratio of 77 % (53 % adjusted for Stortinget)

nextLEVEL 4Q | 2019

o

TARGET | Improved profitability

PREVIOUS TARGET NEW TARGET

EBIT margin above peer-group average

Initial EBIT margin 8%

Long term EBIT margin

10%

nextLEVEL in early phase, but on-track

MNOK

Cost Out and Operational Improvements detailed

Outlook

• High order backlog with variations across business areas

• Good long-term market outlook across most business areas

• Good tender pipeline over the next 12 months

• Some growth uncertainties in certain sectors such as Building & Properties incl. architecture
• Public reforms creating additional uncertainties short-term

Summary

• Another year of growth and outstanding solutions to our customers

• Record-high order backlog
• Weak 4Q result impacted by low billing ratio
• Good long-term outlook, with some short-term uncertainties
• At the beginning of a turnaround and committed to reaching our financial targets
  • nextLEVEL on-track

FINANCIAL CALENDAR
--------------------

2019 Annual report	1 April 2020
2019 Ordinary general meeting	22 April 2020
1Q 2020 results	20 May 2020
2Q 2020 results	26 Aug 2020
3Q 2020 results	4 Nov 2020

Q&A

FOURTH QUARTER 2019 RESULTS | Grethe Bergly, CEO Hans-Jørgen Wibstad, CFO