Quarterly Report • Nov 8, 2016
Quarterly Report
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Foto: LINK arkitektur/ Hundven Clements Photograhpy
| Amounts in MNOK | |||||
|---|---|---|---|---|---|
| (except EPS, shares and percentage) | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 |
| FINANCIAL | |||||
| Net operating revenues | 554.4 | 486.6 | 1 919.2 | 1 598.3 | 2 247.7 |
| Growth (%) | 13.9% | 13.8% | 20.1% | 10.0% | 13.1% |
| EBITDA, underlying 1) | 45.6 | 56.0 | 195.8 | 212.2 | 263.4 |
| EBITDA margin (%), underlying 1) | 8.2% | 11.5% | 10.2% | 13.3% | 11.7% |
| EBIT, underlying 1) | 34.3 | 46.5 | 163.4 | 184.9 | 225.8 |
| EBIT margin (%), underlying 1) | 6.2% | 9.6% | 8.5% | 11.6% | 10.0% |
| Basic earnings per share (NOK) | 0.93 | 1.83 | 4.70 | 4.48 | 5.73 |
| Average number of shares after split 1:10 | 26 246 442 | 26 233 820 | 26 241 979 | 26 244 017 | 26 186 588 |
| Net interest bearing debt (negative is asset) | (74.9) | (89.1) | (74.9) | (89.1) | (223.2) |
| Cash and cash equivalents | 116.8 | 124.9 | 116.8 | 124.9 | 233.0 |
| OPERATIONAL | |||||
| Order intake | 466.1 | 665.4 | 2 137.6 | 2 068.4 | 2 808.0 |
| Order backlog | 1 652.0 | 1 732.3 | 1 652.0 | 1 732.3 | 1 727.5 |
| Billing ratio (%) | 67.7% | 68.0% | 69.3% | 68.1% | 68.2% |
| Employees 2) | 2 261 | 2 144 | 2 261 | 2 144 | 2 147 |
CONSOLIDATED KEY FIGURES
1) Figures excl. IPO expenses of NOK 50.7 million in YTD 2015 and FY 2015 reflecting underlying financial performance
2) From 1 January 2016 new definition of employees, previous periods restated to new definition
Multiconsult delivered a third quarter in line with seasonal effects of summer holiday. Net operating revenues grew by 13.9% to NOK 554.4 million. EBITDA of NOK 45.6 million was impacted by higher operating expenses.
(Figures in brackets = same period prior year or relevant balance sheet date 2016).
Net operating revenues increased by 13.9% to NOK 554.4 million (NOK 486.6 million) compared to the same quarter last year. The increase in revenues was partly driven by LINK arkitektur and higher production from an increased workforce in Norway. The billing ratio remained stable at 67.7% (68.0). Billing rates are at a similar level as last year and the first two quarters of 2016. Buildings & Properties with projects like Campus Ås, Transportation & Infrastructure with New Airbase Ørland, Industry with Hydro Karmøy and Renewable Energy with Mount Coffee Hydropower all with strong contributions to operating revenues. The reduced activity in Oil & Gas was offset by growth in all other business areas.
Operating revenues by business area
Amounts in MNOK ■ Q3 2015 ■ Q3 2016
Underlying operating expenses increased by 18.2% to NOK 508.8 million (NOK 430.6 million). The increase is mainly attributable to higher employee benefit expenses caused by salary adjustment and increased headcount related to the acquisition of LINK arkitektur AS, Akvator AS and net recruitment of 88 employees. Office rent and administrative expenses increased accordingly in the quarter.
Underlying EBITDA was NOK 45.6 million (NOK 56.0 million), a decrease of 18.7% compared to the same period last year. The decrease is mainly explained by higher operating expenses, which more than offset the higher revenues in the quarter.
Underlying EBIT amounted to NOK 34.3 million (NOK 46.5 million), a decrease of 26.2%.
Results from associated companies and joint ventures amounted to NOK 0.0 million (NOK 15.3 million). In third quarter of 2015, there was a one-off financial gain of 15.7 million as a result of the acquisition of LINK arkitektur AS.
Net financial items was an expense of NOK 1.7 million (expense of NOK 1.0 million), due to interest expenses related to draw-down of the credit facility in the period.
Group tax rate was 25.5% (20.9%), the increase being related to the one-off financial gain of the acquisition of LINK arkitektur AS in the same quarter last year.
Profit for the period was NOK 24.3 million (NOK 48.1 million). Earnings per share for the quarter were NOK 0.93 (NOK 1.83).
Net operating revenues amounted to NOK 1 919.2 million (NOK 1 598.3 million). The increase is primarily driven by higher production as a result of acquisitions and organic growth of workforce in Norway. All business areas experienced solid growth year to date 2016, except Oil & Gas and Environment & Natural resources.
Underlying EBITDA was NOK 195.8 million (NOK 212.2 million), a decrease of 7.7% due to higher operating expenses.
Profit for the period was NOK 123.3 million (NOK 117.7 million).
Net cash flow from operating activities was positive NOK 44.3 million (NOK 49.7 million at 30 September 2015). Change in working capital in third quarter 2016 was NOK 0.3 million (negative 11.4 million). Lower net operating revenues in the
third quarter compared to the second quarter 2016 resulted in reduced trade receivables, which more than offset reduced liabilities.
Cash flow used in investment activities was NOK 7.6 million this quarter mainly related to ordinary asset replacement. NOK 100.7 million was used in the same quarter last year, mainly for the acquisition of the remaining shares in LINK arkitektur AS.
Cash flow used in financing activities amounted to NOK 45.5 million (NOK 14.7 million), mainly related to the draw-down of the credit facility in the quarter.
Cash flow from operating activities was negative NOK 16.3 million (positive NOK 77.4 million), the decrease is mainly due to higher working capital this year, following the growth in revenues.
Cash flow used in investment activities was NOK 48.3 million (NOK 110.7 million), mainly related to acquisition of Akvator AS and ordinary asset replacement.
Cash flow used in financing activities was NOK 44.6 million (NOK 290.3 million), mainly related to dividend payment in May and the draw-down of the credit facility in the period.
As of 30 September 2016, total assets amounted to NOK 1 223.0 million (NOK 1 356.3 million at 30 June 2016), and total equity amounted to NOK 362.0 million (NOK 315.7 million at 30 June 2016).
The group had cash and cash equivalents of NOK 116.8 million as of 30 September 2016 (NOK 127 million at 30 June 2016). Interest bearing debt amounted to NOK 41.9 million (NOK 86.9 million at 30 June 2016). Net interest bearing debt amounted to an asset of NOK 74.9 million (asset of NOK 40.1 million at 30 June 2016).
The order backlog remains strong at the end of the third quarter and was NOK 1 652.0 million (NOK 1 732.3 million), a decrease of 4.6% year on year. LINK arkitektur increased by 75.2% year on year mainly due to Tønsberg Hospital contract, which was awarded in the second quarter this year. Transportation & Infrastructure remained stable, while all other business areas declined. Call-offs on frame agreements, such as the important Vestre Viken Hospital and the Fosen wind project in Norway, are only included in the order backlog when signed.
Order intake during the third quarter decreased to NOK 466.1 million (NOK 665.4 million). The increase in Industry and Environment & Natural resources was more than offset by a decrease in all other business areas, especially due to the
absence of major contract awards in the quarter and limited tender flow in the Transportation & Infrastructure sector.
The share of the order intake this quarter between new contracts and add-ons to or extensions of existing contracts was approximately evenly balanced. Important additions this quarter were add-ons to Follobanen and call-offs on Mongstad frame agreement in Norway as well as add-ons to Neelum Jhelum in Pakistan. Among the new contracts this quarter was the new pedestrian- and bicycle pathway between Begby and Borge schools in Norway.
Order intake year to date as of 30 September 2016 was NOK 2 137.6 million (NOK 2 068.4 million).
Multiconsult is organised in three geographical segments, Greater Oslo Area, Regions Norway, International, and one segment for LINK arkitektur.
The segment offers services in six business areas and comprises the central area of eastern Norway, with regional offices in Oslo, Fredrikstad and Drammen.
| Amounts in MNOK | Q3 2016 |
Q3 2015 |
YTD 2016 |
YTD 2015 |
|---|---|---|---|---|
| Net op. revenues | 256.7 | 244.7 | 882.9 | 832.1 |
| EBITDA | 26.3 | 41.0 | 120.3 | 147.8 |
| EBITDA % | 10.3% | 16.8% | 13.6% | 17.8% |
| Order intake | 173.1 | 300.0 | 916.4 | 1 190.6 |
| Order Backlog | 758.3 | 998.2 | 758.3 | 998.2 |
| Billing ratio | 68.1% | 70.1% | 70.9% | 70.3% |
| Employees | 881 | 825 | 881 | 825 |
Net operating revenues increased by 4.9% to NOK 256.7 million (NOK 244.7 million) compared to the same quarter last year.
The growth was mainly supported by increased workforce, partly offset by a lower billing ratio, which decreased to 68.1% (70.1%). The lower billing ratio is a result of efficiency challenges in Transportation & Infrastructure due to a build-up of long-term capacity. Solid growth in operating revenues from Buildings & Properties and Industry was partly offset by a decline within Oil & Gas.
EBITDA amounted to NOK 26.3 million (NOK 41.0 million), a decrease of 35.8% from last year. The increase in revenues was more than offset by higher employee benefit expenses as a result of net recruitment and salary adjustment, as well as increased administrative expenses such as office rent.
Order intake in the third quarter was NOK 173.1 million (NOK 300.0 million), a decrease of 42.3% compared to the same quarter last year. There was a decline in order intake in all business areas. Market conditions have been challenging for all business areas this quarter. The transportation sector is impacted by delays in political- as well as tender processes for EPC contracts for the Norwegian roads entities.
The majority of order intake this quarter came from add-ons to and extensions of existing contracts such as the Follobanen and Campus Ås projects in Norway, as well as Neelum Jhelum in Pakistan. New contracts were also awarded in the third quarter, such as the new pedestrian- and bicycle pathway between Begby and Borge schools and new Police Joint Services building in Norway.
Order backlog for the segment at the end of third quarter 2016 amounted to NOK 758.3 million (NOK 998.2 million), down 24.0% year on year.
The segment offers services in six business areas and comprises regional offices in Kristiansand, Stavanger, Bergen, Trondheim and Tromsø.
| Q3 | Q3 | YTD | YTD | |
|---|---|---|---|---|
| Amounts in MNOK | 2016 | 2015 | 2016 | 2015 |
| Net op. revenues | 208.0 | 194.1 | 710.2 | 669.0 |
| EBITDA | 12.7 | 16.2 | 60.4 | 67.2 |
| EBITDA % | 6.1% | 8.3% | 8.5% | 10.1% |
| Order intake | 204.1 | 230.8 | 795.4 | 714.0 |
| Order Backlog | 511.1 | 474.0 | 511.1 | 474.0 |
| Billing ratio | 67.3% | 66.8% | 68.7% | 66.5% |
| Employees | 792 | 756 | 792 | 756 |
Net operating revenues amounted to NOK 208.0 million (NOK 194.1 million), an increase of 7.2% compared to the same quarter last year. The increase was mainly driven by higher production supported by net recruitment and new contribution from Akvator AS, as well as an improvement in the billing ratio to 67.3% (66.8%). All business areas experienced an increase except Oil & Gas and Renewable Energy.
EBITDA amounted to NOK 12.7 million (NOK 16.2 million), a decrease of 21.2%. The increase in net operating revenues was more than offset by higher operating expenses, due to increased headcount and salary adjustment, in addition to higher administrative expenses such as office rent.
Order intake in the third quarter was NOK 204.1 million (NOK 230.8 million), a decrease of 11.6% compared to the same quarter last year. Strong growth from Renewable Energy and Industry was more than offset by a decrease within Transportation & Infrastructure. The majority of the order intake in the quarter came from a substantial amount of smaller, but important new contracts. Additions such as the call-offs on Mongstad frame agreement and add-ons to New Airbase Ørland in Norway were also recorded in the quarter.
Order backlog for the segment at the end of the third quarter 2016 amounted to NOK 511.1 million (NOK 474.0 million), up 7.8% year on year.
The international segment comprises the subsidiaries Multiconsult UK, Multiconsult Asia and Multiconsult Polska.
| Amounts in MNOK | Q3 2016 |
Q3 2015 |
YTD 2016 |
YTD 2015 |
|---|---|---|---|---|
| Net op. revenues | 22.4 | 15.9 | 66.2 | 48.6 |
| EBITDA | 3.9 | (1.8) | 6.3 | (2.3) |
| EBITDA % | 17.5% | (11.1%) | 9.5% | (4.8%) |
| Order intake | 20.2 | 9.6 | 85.8 | 38.9 |
| Order Backlog | 163.6 | 135.0 | 163.6 | 135.0 |
| Billing ratio | 67.7% | 58.8% | 63.2% | 61.2% |
| Employees | 124 | 106 | 124 | 106 |
Net operating revenues amounted to NOK 22.4 million (NOK 15.9 million), an increase of 40.2% compared to the same quarter last year. The increase is due to higher activity in all three subsidiaries.
EBITDA was NOK 3.9 million (loss of NOK 1.8 million) for the quarter. Multiconsult UK had a strong contribution to the growth, with good project activity.
Order intake in the third quarter was NOK 20.2 million (NOK 9.6 million), an increase of more than 100% compared to the same quarter last year. Main contributions to the increase in order intake in the third quarter came from Transportation & Infrastructure in Multiconsult Polska and Renewable Energy in Multiconsult UK.
Order backlog for the segment at the end of the third quarter 2016 amounted to NOK 163.6 million (NOK 135.0 million).
This segment comprises of LINK arkitektur, consolidated as of 1 September 2015.
| Q3 | Q3 | YTD | YTD | |
|---|---|---|---|---|
| Amounts in MNOK | 2016 | 2015* | 2016 | 2015* |
| Net op. revenues | 69.1 | 32.1 | 252.8 | 32.1 |
| EBITDA | 3.6 | 1.8 | 9.4 | 1.8 |
| EBITDA % | 5.2% | 5.7% | 3.7% | 5.7% |
| Order intake | 68.8 | 125.0 | 339.9 | 125.0 |
| Order Backlog | 219.0 | 125.0 | 219.0 | 125.0 |
| Billing ratio | 68.5% | 70.7% | 69.9% | 70.7% |
| Employees | 343 | 341 | 343 | 341 |
* Included as of 1 September 2015.
At 30 September 2016 the group had 2 261 employees. The turnover ratio (parent company) was stable at 6.7% for the period September 2015 to September 2016.
On 1 September 2016, the Chief Executive Officer of LINK arkitektur AS, Leif Øie, was included into Multiconsult ASA's executive management team. Øie is now Executive Vice President Architecture in the Multiconsult group.
Multiconsult has adopted HSE policies and implemented guidelines to ensure continued compliance with applicable regulations and to maintain and develop its HSE standards. The company's HSE efforts are managed on both central and regional levels.
Recorded sick leave ratio (parent company) was 3.3% for the quarter (3.6%).
Net operating revenues amounted to NOK 69.1 million in the third quarter, with a solid contribution from activities in Norway. A substantial part of the net operating revenues this quarter came from health buildings, both in Norway and Sweden.
EBITDA amounted to NOK 3.6 million in the third quarter.
Order intake in the third quarter was NOK 68.8 million. Among the important additions was the Life Science center in Gothenburg, which was an extension of an existing contract.
Order backlog for the segment at the end of the third quarter amounted to NOK 219.0 million (NOK 125.0 million), the increase mainly reflects the impact of the Tønsberg Hospital contract, which was awarded in the second quarter this year.
With effect from 1 January 2017, the company (parent company) has changed its pension plan for the remaining 280 employees that were on the defined pension benefit plan. The new contribution-based pension plan now includes all
Multiconsult employees. The change will result in a positive one-off effect on EBITDA in the fourth quarter 2016. The change will not have any short term cash flow effect and will be treated as a one-off item with no effect on the 2016 dividend.
The overall market outlook for 2016 remains fairly robust despite the slowdown in the Norwegian economy.
In Norway, the Industry segment is slowly moving towards more favorable prospects. Buildings & Properties is expected to have a modest, but stable growth. The outlook for the architecture market shows some signs of positive development, but continues to be impacted by regional variations. Demand for our services in the Oil & Gas industry is expected to slowly improve going forward. Public sector investment is driving a strong outlook for Transportation & Infrastructure within road and rail, although the new national budget can result in further delays. The Renewable Energy market continues to grow in Norway, especially within transmission. International renewable energy markets continue to grow, providing new business opportunities for Multiconsult.
The overall competitive landscape is migrating towards more Engineering, Procurement and Construction (EPC) contracts and Public-Private Partnerships (PPPs). Strong competition has led to price pressure on large projects in Norway. Current market rates have stabilised, however the continued increase in salaries for the Norwegian workforce has lead to challenging profitability for the industry in general.
Multiconsult's strong market position, flexible business model and wide service offering provides a sound base for further growth, both domestic and international. Resources from Multiconsult Polska are gradually being phased into ongoing projects to strengthen competitiveness. The acquisition of LINK arkitektur AS is expected to generate top line synergies by further strengthening the group's value proposition to customers.
The order backlog remains strong and provides a strong foundation for continued growth, supported by valuable frame agreements generated from a broad and robust customer base.
Multiconsult will continue to focus on further improvement of the billing ratio in addition to strong project execution and cost efficiency throughout the organisation to secure strong profitability.
The risk of disagreements and legal disputes related to the possible cost of delays and project errors is always present in the consultancy business. Multiconsult has good insurance policies and routines for following up such cases. Further details regarding the insurance coverage are provided in note 19 to the consolidated financial statements for 2015.
Multiconsult is exposed to credit risk, primarily related to transactions with clients and from bank deposits. The company's losses on accounts receivable have been modest for a number of years. New customers are subject to credit assessment and approval before credit is extended to them. Responsibility for credit management in the parent company is centralised, and routines are integrated in the group's quality assurance system. The company has established routines for assessing the creditworthiness of the customer, and the possible need for bank guarantees or other risk mitigation measures.
The group is exposed to currency risk through ongoing projects abroad with fees in foreign currencies. Hedging contracts have been entered into for certain projects to reduce this risk. Currency risk is regarded as modest.
The parent company only uses it's credit facility peridocally, and as a result, it's interest-bearing debt is limited, and it accordingly has a low interest-rate risk related to debt. Multiconsult's liquidity risk exposure is limited. Liquidity management is followed up actively through budgets and regular forecasting. To ensure sufficient freedom of action in terms of liquidity, and thereby to moderate liquidity risk, a credit facility of NOK 220 million and an additional revolving credit facility of NOK 80 million for three years has been established with the parent company's bank. The revolving credit facility is undrawn at 30 September 2016.
Net operating revenues: Operating revenues less sub consultants and disbursements.
EBIT: Earnings before net financial items, results from associates and joint ventures and income tax.
EBIT margin (%): EBIT as a percentage of net operating revenues.
EBITDA: EBIT before depreciation, amortisation and impairment.
EBITDA margin (%): EBITDA as a percentage of net operating revenues.
Operating expenses: Employee benefit expenses plus other operating expenses.
Net interest bearing debt: Non-current and current interest bearing liabilities deducted cash and cash equivalents.
Order intake: Expected operating revenues on new contracts and confirmed changes to existing contracts. Only group external contracts are included.
Order backlog: Expected remaining operating revenues on new and existing contracts. Only group external contracts are included. Call-offs on frame agreements are included in the order backlog when signed.
Billing ratio (%): Hours recorded on chargeable projects as a percentage of total hours worked (including administrative staff) and employer-paid absence. Billing ratio per segment includes allocated administrative staff.
Employees: Number of employees comprise all staff on payroll including staff on temporarily leave (paid and unpaid), excluding temporary personnel.
This report 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 notice, 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 notice.
Unaudited for the period ended 30 September 2016
| Amounts in TNOK, except EPS | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 |
|---|---|---|---|---|---|
| Operating revenues | 631 876 | 552 878 | 2 181 805 | 1 809 788 | 2 554 701 |
| Expenses for sub consultants and disbursements | 77 517 | 66 261 | 262 635 | 211 534 | 307 033 |
| Net operating revenues | 554 359 | 486 617 | 1 919 170 | 1 598 254 | 2 247 668 |
| Employee benefit expenses | 405 273 | 347 989 | 1 410 370 | 1 152 636 | 1 649 240 |
| Other operating expenses | 103 525 | 82 619 | 313 008 | 284 096 | 385 726 |
| Operating expenses excl. depreciation, | |||||
| amortisation and impairments | 508 798 | 430 608 | 1 723 378 | 1 436 732 | 2 034 966 |
| Operating profit before depreciation, | |||||
| amortisation and impairments (EBITDA) | 45 561 | 56 009 | 195 792 | 161 522 | 212 702 |
| Depreciation, amortisation and impairments | 11 234 | 9 473 | 32 416 | 27 265 | 37 616 |
| Operating profit (EBIT) | 34 327 | 46 536 | 163 376 | 134 257 | 175 086 |
| Results from associated companies and joint ventures | 23 | 15 296 | 4 043 | 19 666 | 20 945 |
| Financial income | 417 | 783 | 1 795 | 7 118 | 8 882 |
| Financial expenses | 2 119 | 1 802 | 5 612 | 4 975 | 7 049 |
| Net financial items | (1 701) | (1 018) | (3 817) | 2 143 | 1 833 |
| Profit before tax | 32 649 | 60 813 | 163 602 | 156 066 | 197 863 |
| Income tax expense | 8 324 | 12 693 | 40 342 | 38 406 | 47 754 |
| Profit for the period | 24 324 | 48 120 | 123 260 | 117 659 | 150 109 |
| Attributable to: | |||||
| Owners of Multiconsult ASA | 24 324 | 48 120 | 123 260 | 117 659 | 150 109 |
| Earnings per share 1) | |||||
| Basic and diluted (NOK) | 0.93 | 1.83 | 4.70 | 4.48 | 5.73 |
1) Earnings per share has been adjusted retrospectively for a 1:10 share split resolved at the Annual General Meeting on 16 April 2015, see note 9.
| Amounts in TNOK | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 |
|---|---|---|---|---|---|
| Profit for the period | 24 324 | 48 120 | 123 260 | 117 659 | 150 109 |
| Other comprehensive income | |||||
| Remeasurment of defined benefit obligations | 28 815 | (72 641) | (44 524) | 40 243 | 87 298 |
| Tax | (7 204) | 19 613 | 11 131 | (10 866) | (29 695) |
| Total items that will not be reclassified to profit or loss | 21 611 | (53 028) | (33 393) | 29 377 | 57 603 |
| Currency translation differences | 419 | 1 766 | (3 151) | 1 380 | 1 722 |
| Total items that may be reclassified subsequently to profit or loss | 419 | 1 766 | (3 151) | 1 380 | 1 722 |
| Total other comprehensive income for the period | 22 030 | (51 262) | (36 544) | 30 758 | 59 325 |
| Total comprehensive income for the period | 46 354 | (3 142) | 86 716 | 148 417 | 209 433 |
| Attributable to: | |||||
| Owners of Multiconsult ASA | 46 354 | (3 142) | 86 716 | 148 417 | 209 433 |
| Amounts in TNOK | At 30 September 2016 | At 30 June 2016 | At 31 December 2015 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Deferred tax assets | 78 352 | 86 802 | 66 722 |
| Intangible assets | 13 656 | 11 959 | 9 304 |
| Goodwill | 194 131 | 194 131 | 173 023 |
| Property, plant and equipment | 78 390 | 83 592 | 84 783 |
| Associated companies and joint ventures | 10 455 | 11 279 | 7 258 |
| Non-current receivables and shares | 19 218 | 34 562 | 6 221 |
| Total non-current assets | 394 202 | 422 326 | 347 311 |
| Current assets | |||
| Trade receivables | 359 186 | 470 919 | 427 448 |
| Work in progress | 305 119 | 280 052 | 192 781 |
| Other receivables and prepaid costs | 47 647 | 56 055 | 57 135 |
| Cash and cash equivalents | 116 800 | 126 959 | 232 954 |
| Total current assets | 828 752 | 933 985 | 910 318 |
| Total assets | 1 222 953 | 1 356 312 | 1 257 629 |
| EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Total paid in equity | 26 443 | 26 443 | 26 436 |
| Other equity | 335 605 | 289 253 | 323 745 |
| Total shareholders' equity | 362 048 | 315 696 | 350 181 |
| Non-current liabilities | |||
| Retirement benefit obligations | 205 868 | 241 835 | 161 344 |
| Provisions | 17 157 | 17 172 | 19 697 |
| Non-current interest bearing liabilities | 39 810 | 85 729 | 7 190 |
| Total non-current liabilities | 262 835 | 344 736 | 188 231 |
| Current liabilities | |||
| Trade payables | 71 528 | 99 143 | 121 054 |
| Current tax liabilities | 38 172 | 30 179 | 54 676 |
| VAT and other public taxes and duties payables | 186 784 | 206 712 | 225 973 |
| Current interest bearing liabilities | 2 087 | 1 125 | 2 614 |
| Other current liabilities | 299 500 | 358 721 | 314 900 |
| Total current liabilities | 598 071 | 695 880 | 719 217 |
| Total liabilities | 860 906 | 1 040 616 | 907 448 |
| Total equity and liabilities | 1 222 953 | 1 356 312 | 1 257 629 |
| Amounts in TNOK | Share capital |
Own shares |
Share premium |
Total paid-in capital |
Retained earnings |
Pension | Translation differences |
Total equity |
|---|---|---|---|---|---|---|---|---|
| 31 December 2014 | 13 125 | - | 13 320 | 26 445 | 679 290 | (287 278) | 1 457 | 419 914 |
| Treasury shares | - | (72) | - | (72) | (13 827) | - | - | (13 899) |
| Dividend | - | - | - | - | (275 617) | - | - | (275 617) |
| Comprehensive income | - | - | - | - | 117 659 | 29 377 | 1 381 | 148 417 |
| 30 September 2015 | 13 125 | (72) | 13 320 | 26 373 | 507 505 | (257 901) | 2 838 | 278 815 |
| 31 December 2014 | 13 125 | - | 13 320 | 26 445 | 679 290 | (287 278) | 1 457 | 419 914 |
| Dividend | - | - | - | - | (275 617) | - | - | (275 617) |
| Treasury shares | - | (9) | - | (9) | (1 750) | - | - | (1 759) |
| Employee share purchase programme | - | - | - | - | (1 791) | - | - | (1 791) |
| Comprehensive income | - | - | - | - | 150 109 | 57 602 | 1 722 | 209 433 |
| 31 December 2015 | 13 125 | (9) | 13 320 | 26 436 | 550 241 | (229 676) | 3 179 | 350 181 |
| Dividend | - | - | - | - | (76 123) | - | - | (76 123) |
| Treasury shares | - | 8 | - | 8 | 1 483 | - | - | 1 491 |
| Employee share purchase programme | - | - | - | - | (217) | - | - | (217) |
| Comprehensive income | - | - | - | - | 123 260 | (33 393) | (3 151) | 86 716 |
| 30 September 2016 | 13 125 | (1) | 13 320 | 26 443 | 598 644 | (263 069) | 29 | 362 048 |
| Amounts in TNOK | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 |
|---|---|---|---|---|---|
| Cash flows from operating activities | |||||
| Profit before tax | 32 649 | 60 813 | 163 602 | 156 066 | 197 863 |
| Income taxes paid | (6 488) | (510) | (63 755) | (57 652) | (55 601) |
| Depreciation, amortization and impairment | 11 234 | 9 473 | 32 416 | 27 265 | 37 616 |
| Results from associated companies and joint ventures | (23) | (15 296) | (4 043) | (19 666) | (20 945) |
| Non cash pension cost | 6 590 | 6 648 | (389) | 30 225 | 33 984 |
| Sub total operating activities | 43 962 | 61 128 | 127 831 | 136 238 | 192 918 |
| Changes in working capital | 334 | (11 392) | (144 115) | (58 809) | 13 251 |
| Net cash flow from operating activities | 44 296 | 49 736 | (16 284) | 77 430 | 206 169 |
| Cash flows from investment activities | |||||
| Proceeds from sale of fixed assets and shares | - | - | 10 | - | 99 |
| Payments for purchase of fixed assets and financial non-current assets | (8 444) | (8 449) | (28 930) | (19 948) | (42 052) |
| Proceeds/payments related to equity accounted investments | 847 | 3 186 | 847 | 4 690 | 4 690 |
| Net cash effect of business combinations | - | (95 485) | (20 255) | (95 485) | (95 485) |
| Net cash flow from investment activities | (7 597) | (100 748) | (48 328) | (110 743) | (132 748) |
| Cash flows from financing activities | |||||
| Change of non-current liabilities | (45 471) | (769) | 31 519 | (769) | (610) |
| Paid dividends | - | - | (76 123) | (275 617) | (275 617) |
| Sale treaury shares | - | - | - | - | 8 608 |
| Purchase treasury shares | - | (13 899) | - | (13 899) | (25 797) |
| Net cash flow from financing activities | (45 471) | (14 668) | (44 604) | (290 285) | (293 416) |
| Foreign currency effects on cash and cash equivalents | (1 387) | (113) | (6 938) | (161) | 4 337 |
| Net increase/decrease in cash and cash equivalents | (10 159) | (65 793) | (116 154) | (323 759) | (215 657) |
| Cash and cash equivalents at the beginning of the period | 126 959 | 190 645 | 232 954 | 448 611 | 448 611 |
| Cash and cash equivalents at the end of the period | 116 800 | 124 852 | 116 800 | 124 852 | 232 954 |
Multiconsult ASA (the company) is a Norwegian public limited liability company listed on Oslo Børs. The company and its subsidiaries (together the Multiconsult group/the group) are
The financial statements are presented in NOK, rounded to the nearest thousand, unless otherwise stated. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial statements and notes may not add up to the total of that row or column.
These interim condensed consolidated financial statements for the third quarter of 2016 have been prepared in accordance with IAS 34 as approved by the EU (IAS 34). They have not been audited. They do not include all of the information required for full annual financial statements of the group and should be read in conjunction with the consolidated financial statements for 2015. The accounting policies applied are consistent with those applied and described in the consolidated annual financial statements for 2015, which are available upon request from the company's registered office at Nedre Skøyenvei 2, 0276 Oslo and at www.multiconsult.no.
among the leading suppliers of consultancy and design services in Norway and the Nordic region. The group has some activity outside the Nordic region, including subsidiaries Multiconsult Polska, Multiconsult UK and Multiconsult Asia.
These interim condensed consolidated financial statements for the third quarter of 2016 were approved by the Board of Directors and the CEO on 7 November 2016.
The group prepares its consolidated annual financial statements in accordance with IFRS as adopted by the EU (International Financial Reporting Standards – IFRS) and the Norwegian Accounting Act. References to IFRS in these accounts refer to IFRS as approved by the EU. The date of transition was 1 January 2013. The accounting policies adopted are consistent with those of the previous financial year.
At the time of approval for issue of these interim condensed consolidated financial statements, some new standards, amendments to standards and interpretations have been published, but are not yet effective and have not been applied in preparing these consolidated financial statements. Those that may be relevant for the group are described in note 2 A to the annual consolidated financial statements for 2015.
The preparation of interim condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these interim condensed consolidated financial
statements, the significant judgments made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements for 2015 (see especially note 2 B).
Refer to note 5 to the consolidated annual financial statements for 2015 for more information on the segments. The group has three geographical reportable segments in addition to a segment for LINK arkitektur. Revenues and expenses are
reported in the segment where the employee is employed. The cost of administrative services, rent of premises, depreciation and so forth is allocated between the segments.
| Q3 2016 | Greater | Regions | Inter | LINK | Not | Elimi | |
|---|---|---|---|---|---|---|---|
| Amounts in TNOK | Oslo Area | Norway | national | arkitektur | allocated | nations | Total |
| External revenues | 311 213 | 224 781 | 25 962 | 70 944 | (1 023) | - | 631 876 |
| Internal revenues | 2 107 | - | 9 183 | 5 274 | 130 | (16 694) | - |
| Total operating revenues | 313 320 | 224 781 | 35 144 | 76 218 | (893) | (16 694) | 631 876 |
| Net operating revenues | 256 698 | 208 023 | 22 357 | 69 150 | (1 868) | - | 554 359 |
| Operating expenses | 230 373 | 195 297 | 18 440 | 65 581 | (894) | - | 508 798 |
| EBITDA | 26 325 | 12 725 | 3 917 | 3 568 | (974) | - | 45 561 |
| Depreciation, amortisation, impairment | 3 266 | 6 428 | 416 | 1 125 | - | - | 11 234 |
| EBIT | 23 059 | 6 298 | 3 501 | 2 444 | (974) | - | 34 327 |
| Associates and joint ventures | 125 | - | (102) | - | - | - | 23 |
| Receivables 1) | 314 505 | 233 360 | 39 765 | 98 820 | 2 218 | (7 222) | 681 446 |
| Number of employees | 881 | 792 | 124 | 343 | 121 | - | 2 261 |
1) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
| Q3 2015 Amounts in TNOK |
Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur2) |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|
| External revenues | 294 704 | 207 978 | 16 993 | 34 030 | (826) | - | 552 878 |
| Internal revenues | 1 738 | - | 5 464 | 1 118 | 1 554 | (9 874) | - |
| Total operating revenues | 296 442 | 207 978 | 22 457 | 35 148 | 728 | (9 874) | 552 878 |
| Net operating revenues | 244 737 | 194 056 | 15 947 | 32 118 | (239) | - | 486 617 |
| Operating expenses | 203 722 | 177 904 | 17 717 | 30 275 | 991 | - | 430 608 |
| EBITDA | 41 014 | 16 152 | (1 771) | 1 843 | (1 230) | - | 56 009 |
| Depreciation, amortisation, impairment | 3 251 | 5 435 | 517 | 269 | - | - | 9 473 |
| EBIT | 37 763 | 10 717 | (2 288) | 1 574 | (1 230) | - | 46 536 |
| Associates and joint ventures | 107 | - | (252) | (242) | 15 683 | - | 15 296 |
| Receivables 1) | 288 112 | 205 791 | 28 959 | 97 593 | 1 836 | (5 572) | 616 719 |
| Number of employees | 825 | 756 | 106 | 341 | 116 | - | 2 144 |
1) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
2) Multiconsult ASA acquired LINK arkitektur AS on 15 September 2015 and consolidated as of 1 September 2015.
| YTD 2016 Amounts in TNOK |
Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|
| External revenues | 1 079 051 | 758 517 | 71 170 | 268 226 | 4 840 | - 2 181 805 | |
| Internal revenues | 8 836 | - | 24 579 | 13 763 | 4 527 | (51 705) | - |
| Total operating revenues | 1 087 887 | 758 517 | 95 749 | 281 989 | 9 367 | (51 705) 2 181 804 | |
| Net operating revenues | 882 939 | 710 160 | 66 240 | 252 805 | 7 025 | - 1 919 170 | |
| Operating expenses | 762 609 | 649 716 | 59 965 | 243 452 | 7 635 | - 1 723 378 | |
| EBITDA | 120 330 | 60 444 | 6 275 | 9 352 | (610) | - | 195 792 |
| Depreciation, amortisation, impairment | 9 348 | 18 571 | 1 312 | 3 186 | - | - | 32 416 |
| EBIT | 110 983 | 41 874 | 4 964 | 6 167 | (610) | - | 163 377 |
| Associates and joint ventures | 335 | - | 3 708 | - | - | - | 4 043 |
| Receivables 1) | 314 505 | 233 360 | 39 765 | 98 820 | 2 218 | (7 222) | 681 446 |
| Number of employees | 881 | 792 | 124 | 343 | 121 | - | 2 261 |
1) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
| YTD 2015 Amounts in TNOK |
Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur3) |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|
| External revenues | 993 833 | 714 634 | 52 516 | 34 030 | 14 776 | - | 1 809 788 |
| Internal revenues | 4 461 | - | 11 435 | 1 118 | 3 411 | (20 425) | - |
| Total operating revenues | 998 294 | 714 634 | 63 951 | 35 148 | 18 186 | (20 425) | 1 809 788 |
| Net operating revenues | 832 056 | 668 958 | 48 630 | 32 118 | 16 492 | - | 1 598 254 |
| Operating expenses 1) | 684 273 | 601 714 | 50 952 | 30 275 | 69 519 | - | 1 436 733 |
| EBITDA | 147 783 | 67 244 | (2 321) | 1 843 | (53 026) | - | 161 522 |
| Depreciation, amortisation, impairment | 9 572 | 16 242 | 1 181 | 269 | - | - | 27 264 |
| EBIT | 138 211 | 51 002 | (3 503) | 1 574 | (53 026) | - | 134 258 |
| Associates and joint ventures | 3 096 | - | 1 128 | (242) | 15 683 | - | 19 666 |
| Receivables 2) | 288 112 | 205 791 | 28 959 | 97 593 | 1 836 | (5 572) | 616 719 |
| Number of employees | 825 | 756 | 106 | 341 | 116 | - | 2 144 |
1) IPO expenses of NOK 50.6 million recorded as not allocated operating expenses
2) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
3) Multiconsult ASA acquired LINK arkitektur AS on 15 September 2015 and consolidated as of 1 September 2015.
| Year 2015 Amounts in TNOK |
Greater Oslo Area |
Regions Norway |
Inter national |
LINK arkitektur3) |
Not allocated |
Elimi nations |
Total |
|---|---|---|---|---|---|---|---|
| External revenues | 1 366 755 | 973 803 | 68 632 | 127 165 | 18 345 | - | 2 554 701 |
| Internal revenues | 7 192 | 84 | 24 191 | 6 759 | 5 396 | (43 622) | - |
| Total operating revenues | 1 373 947 | 973 887 | 92 823 | 133 924 | 23 741 | (43 622) | 2 554 701 |
| Net operating revenues | 1 132 735 | 909 456 | 66 994 | 117 490 | 20 993 | - | 2 247 668 |
| Operating expenses 1) | 943 985 | 831 710 | 70 291 | 114 975 | 74 005 | - | 2 034 966 |
| EBITDA | 188 751 | 77 746 | (3 297) | 2 515 | (53 012) | - | 212 702 |
| Depreciation, amortisation, impairment | 12 789 | 22 319 | 1 677 | 830 | - | - | 37 616 |
| EBIT | 175 962 | 55 427 | (4 975) | 1 685 | (53 012) | - | 175 086 |
| Associates and joint ventures | (63) | - | 2 764 | 2 561 | 15 683 | - | 20 945 |
| Receivables 2) | 294 568 | 207 572 | 36 976 | 99 990 | 3 428 | (8 190) | 634 344 |
| Number of employees | 833 | 756 | 108 | 330 | 120 | - | 2 147 |
1) IPO expenses of NOK 50.7 million recorded as not allocated operating expenses
2) Receivables includes accounts receivables (before provision for loss) and accrued revenues.
3) Multiconsult ASA acquired LINK arkitektur AS on 15 September 2015 and consolidated as of 1 September 2015.
| Amounts in TNOK | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 |
|---|---|---|---|---|---|
| Buildings & Properties | 189 996 | 163 307 | 655 126 | 569 180 | 789 564 |
| Renewable Energy | 96 779 | 95 629 | 330 152 | 308 893 | 427 938 |
| Industry | 52 385 | 35 507 | 169 168 | 100 658 | 145 660 |
| Environment & Natural resources | 18 389 | 18 340 | 55 093 | 58 023 | 84 117 |
| Oil & Gas | 26 622 | 38 137 | 84 700 | 145 425 | 184 279 |
| Transportation & Infrastructure | 176 762 | 167 929 | 619 339 | 593 579 | 795 978 |
| LINK arkitektur 1) | 70 944 | 34 030 | 268 226 | 34 030 | 127 165 |
| Total | 631 876 | 552 878 | 2 181 805 | 1 809 788 | 2 554 701 |
1) Multiconsult ASA acquired LINK arkitektur AS on 15 September 2015 and consolidated as of 1 September 2015.
Refer to the section Segments in the first part of this report for further discussions.
The group's net operating revenues are affected by the number of working days within each reporting period while employee expenses are recognised for full calendar days. The number of working days in a month is affected by public holidays and vacations. The timing of public holidays' (e.g. Easter) during quarters and whether they fall on weekends or weekdays impacts revenues. Generally, the company's employees are granted leave during Easter and Christmas. The summer holidays primarily impact the month of July and the third quarter. Note 6: Significant events and transactions The Annual General Meeting on 26 April 2016 resolved payment of ordinary dividends related to the 2015 financial year of NOK 76.1 million (NOK 2.9 per share) that was paid to the shareholders registered on 26 April 2016. The Company acquired 100% of the shares in Akvator AS on 1 June 2016. See note 12 for further information. Akvator AS was merged with Multiconsult ASA with effect from 1 October 2016. Note 7: Related party transactions See note 22 to the consolidated financial statements for 2015 for a description of related parties and related parties transactions in 2015. Stiftelsen Multiconsult had an ownership share of 20.5% at 31 December 2015 and 30 September 2016. The company's assessment is that Stiftelsen Multiconsult has significant influence. Note 8: Own shares In 2015 Multiconsult ASA introduced a share purchase program for its employees. Through the share purchase program the company offers its employees shares in Multiconsult with a discount of 20%. Shares purchased through the program will be subject to a two-year lock-up period. Number of treasury shares: Holding of shares 31 December 2015 18 067 Sold to employees year to date 2016 15 309 Holding of treasury shares 30 September 2016 2 758 The holding of own shares are recorded with purchase price at NOK 0.3 million as an equity transaction.
For the periods presented there are no dilutive effects on the profits or number of shares. Basic and diluted earnings per share are consequently the same.
| Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 | |
|---|---|---|---|---|---|
| Profit for the period (in TNOK) | 24 324 | 48 120 | 123 260 | 117 659 | 150 109 |
| Weighted average no shares (excl own shares) before split | 2 624 644 | 2 623 382 | 2 624 198 | 2 624 407 | 2 618 659 |
| Weighted average no shares (excl own shares) after split | 26 246 442 | 26 233 820 | 26 241 979 | 26 244 017 | 26 186 588 |
| Earnings per share before split (NOK) | 9.3 | 18.3 | 47.0 | 44.8 | 57.3 |
| Earnings per share after split 1:10 (NOK) | 0.93 | 1.83 | 4.70 | 4.48 | 5.73 |
The Annual General Meeting held on 16 April 2015 resolved a 1:10 split of the shares. The split occurred after the balance sheet date but before the financial statements were authorised for issue, and consequently the per share calculations for the first quarter 2015 and prior periods are based on the new number of shares.
For a description of the pension schemes see note 11 to the consolidated financial statements for 2015. Assumptions used in the calculations of the liability related to the defined benefit plan:
| At 30 September 2016 | At 30 June 2016 | At 31 December 2015 | |
|---|---|---|---|
| Discount rate | 2.10% | 2.20% | 2.70% |
| Rate of compensation increase | 1.75% | 2.00% | 2.00% |
| Rate of pension increase | 0.70% | 0.70% | 0.70% |
| Increase of social security base amount (G) | 2.00% | 2.25% | 2.25% |
The group's financial instruments are primarily accounts receivables and other receivables, cash and cash equivalents and accounts payables, for which the book value is a good approximation of fair value. The group's interest bearing liabilities are bank borrowings in the UK subsidiary, amounting to GBP 0.6 million (NOK 6.3 million at 30 September 2016 and NOK 7.3 million at 30 June 2016), bank borrowings in Akvator AS, amounting to NOK 2.5 million and Multiconsult ASA has drawn
at credit facility of NOK 33.1 million. Due to the limited amount, it is assumed that the book value is a good approximation of fair value. The group owns a limited amounts of shares and participations available for sale (NOK 0.5 million), and it is assumed that the book value is a good approximation of fair value. Fair value of derivatives (currency swaps) were recorded with a loss (liability) of NOK 0.3 million at 30 September 2016 (NOK 0.4 million at 30 June 2016).
On 1 June 2016 Multiconsult ASA acquired 100% of the shares in Akvator AS. The shares were acquired for NOK 24.4 million. Akvator AS had net operating revenues of NOK 34 million in 2015 with a profit after tax of NOK 1 million. If the company had been owned 100% from 1 January 2016 it would have had a positive impact on net operating revenue of NOK 15.6 million and EBIT of negative NOK 1.4 million for the Multiconsult group.
| Amounts in TNOK | |
|---|---|
| Assets | 14 847 |
| Liabilities | 11 580 |
| Net identifiable assets and liabilities | 3 267 |
| Excess values: | |
| Goodwill | 21 108 |
| Net assets | 24 375 |
| Cash and cash equivalents | 4 120 |
| Net cash | (20 255) |
The acquisition generated an excess value of NOK 21.1 million. The excess value is allocated to goodwill and is related to the competence of the staff.
Multiconsult use alternative performance measures for periodic and annual financial reporting in order to provide a better understanding of the group's underlying financial performance.
Multiconsult has defind the initial public offering expenses (IPO) in connection with the listing on Oslo Børs in May 2015 as expenses that are excluded from the underlying results.
| Amounts in MNOK (except percentage) | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 | FY 2015 |
|---|---|---|---|---|---|
| Net operating revenues | 554.4 | 486.6 | 1 919.2 | 1 598.3 | 2 247.7 |
| Reported operating expenses | 508.8 | 430.6 | 1 723.4 | 1 436.7 | 2 035.0 |
| Reported EBITDA | 45.6 | 56.0 | 195.8 | 161.5 | 212.7 |
| APMs - IPO expenses | - | - | - | 50.7 | 50.7 |
| EBITDA underlying | 45.6 | 56.0 | 195.8 | 212.2 | 263.4 |
| Depreciation, amortisation and impairments | 11.2 | 9.5 | 32.4 | 27.3 | 37.6 |
| EBIT, underlying | 34.3 | 46.5 | 163.4 | 184.9 | 225.8 |
| EBITDA margin (%), underlying | 8.2% | 11.5% | 10.2% | 13.3% | 11.7% |
| EBIT margin (%), underlying | 6.2% | 9.6% | 8.5% | 11.6% | 10.0% |
Nedre Skøyen vei 2, 0276 Oslo P O Box 265 Skøyen, 0213 Oslo Telephone 21 58 50 00 Fax 21 58 50 01
[email protected] www.multiconsult.no Org no 910 253 158
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