FOURTH QUARTER 2017 RESULTS Christian Nrgaard Madsen, CEO | Anne - - PowerPoint PPT Presentation

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FOURTH QUARTER 2017 RESULTS Christian Nrgaard Madsen, CEO | Anne - - PowerPoint PPT Presentation

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multiconsult.no multiconsult.no FOURTH QUARTER 2017 RESULTS Christian Nrgaard Madsen, CEO | Anne Harris, CFO multiconsult.no multiconsult.no DISCLAIMER This presentation includes forward-looking statements which are based on our current

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FOURTH QUARTER 2017 RESULTS

Christian Nørgaard Madsen, CEO | Anne Harris, CFO

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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

  • ccur 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 forward- looking 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.

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INTRODUCTION AND HIGHLIGHTS

Christian Nørgaard Madsen, CEO

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Highlights

  • Marginally negative EBIT in fourth quarter due to challenging project

execution

  • Earnings positively impacted by improved results from LINK arkitektur
  • Fourth quarter and full year revenue growth, driven by acquisitions
  • Comprehensive integration and onboarding of Hjellnes group on track
  • Stable order backlog at NOK 2.1 billion
  • Profitability improvement program launched
  • Proposed dividend for 2017 of NOK 1.50 per share

Drammen hospital | ill. LINK arkitektur

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  • 4Q 2017
  • Net operating revenues up 21.1% y-o-y to NOK 830.2 million
  • EBIT of NOK - 2.7 million
  • FY 2017
  • Net operating revenues up 14.3% y-o-y to NOK 2 977.6 million
  • Organic growth 4.0%
  • Driven by acquisitions and net recruitment
  • Impacted by a lower billing ratio and one less working day

compared to last year

  • EBIT of NOK 118 million, 4.0% margin
  • Impacted by increased manning expenses, ERP,

M&A and integration

New Alverheim School | Ill.: ZOA Architectural Animation & Visualization.

Financial summary 4Q and FY 2017

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Summary of acquisitions in 2017

Iterio AB 75 Stockholm Hjellnes group 250 Oslo Prosjektforum AS 11 Sarpsborg VVSPLAN AS 3 Mo i Rana Rambøll Ålesund 9 Ålesund Bomek Consulting AS 12 Bodø

Company Employees Geography

Storseisundet bridge, Atlantic Ocean Road. Photo by Alireza Shakeria

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Key ongoing projects 4Q 2017

  • Campus Ås

The Follo Line - Ski station| Photo: Multiconsult

  • InterCity Fredrikstad - Sarpsborg
  • The Follo Line
  • New Airbase Ørland
  • Tønsberg Hospital
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Order intake 4Q 2017

Key order intake

  • Northern Lights CCS
  • Drammen Hospital
  • InterCity Fredrikstad - Sarpsborg
  • Campus Ås
  • The Follo Line

250 50 100 150 350 200 300 400 450 500 Buildings & Properties Transportation Oil & Gas Industry Renewable Energy Water & Environment

Highlights

  • Order intake NOK 1 026.9 million, up 8.4 % y-o-y
  • Continued strong tender pipeline

MNOK

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Order backlog development and backlog per business area

  • Order backlog up 19.8 % y-o-y to

NOK 2 147.7 million

  • Call-offs on frame agreements not

included before signing ─ Fornebubanen, Oslo kommune ─ BaneNOR

1 200 1 600 2 200 200 400 800 600 1 000 1 400 1 800 2 000

2Q 2016 2Q 2017 3Q 2015 4Q 2015 3Q 2017 1Q 2016 3Q 2016 4Q 2016 1Q 2017 4Q 2017 4Q 2017 Industry Transport Oil & Gas Water & Environment Renewable Energy Buildings & Property

MNOK

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Organisation

  • Integration and onboarding of the Hjellnes group on track
  • Stable organisation - group employee turnover at 6.0 % (6.4%)
  • Share purchase programme for employees
  • 23 % of employees participated in the programme
  • New regional director of Mid-Norway business unit Jan Anders Syltern
  • Merger of South and South-West business units in Norway
  • Strengthen operations and management
  • Improve efficiency, marketing and sales efforts in Rogaland and Agder
  • New business unit Energy established with acting

EVP Dr. Jörgen Hasselström

  • Ensuring achievement of 3-2-1 strategy ambitions
  • Focusing on growth in renewable energy internationally

Håhammeren bridge and walking trail | Photo: Jo Gaute Fornes

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FINANCIAL REVIEW

Anne Harris, CFO

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  • NOK 830.2 million
  • Growth from

acquisitions

  • Write-downs
  • Billing rates increased

in Norway

  • Billing ratio at 68.4 %

down by 0.6 ppt y-o-y

  • NOK -2.7 million
  • Opex increase due to

headcount from acquisitions

  • Up 21.6% y-o-y to

2 851 employees

  • Organic growth 5.9 %
  • Tighter resource

management 200 400 600 800 1 000 1Q 2017 4Q 2015 3Q 2017 3Q 2016 1Q 2016 2Q 2016 4Q 2016 2Q 2017 4Q 2017 Net Operating Revenues 40 20 80 60 100 1Q 2017 1Q 2016 4Q 2015 2Q 2016 3Q 2016 4Q 2016 2Q 2017 3Q 2017 4Q 2017 EBIT, underlying 64% 66% 68% 70% 72% 4Q 2017 3Q 2016 1Q 2016 4Q 2015 2Q 2016 4Q 2016 1Q 2017 3Q 2017 2Q 2017 2Q 2014 1Q 2014 3Q 2014 4Q 2014 Billing ratio 2 000 2 200 2 400 2 600 2 800 3 000 1Q 2016 3Q 2017 2Q 2016 4Q 2015 2Q 2017 3Q 2016 4Q 2016 1Q 2017 4Q 2017 21.6% Number of employees

Financial highlights 4Q 2017

MNOK MNOK

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Financial highlights FY 2017

  • Net operating revenue up 14.4 % to NOK 2 977.6

million ‒ Organic growth 4.0% ‒ Billing ratio at 68.4% ‒ 1 less working day calendar effect

  • Operating expenses

– Higher employee benefit expenses due to M&A – ERP system, M&A and integration

  • EBIT of NOK 118.0, margin of 4.0%

500 1 000 1 500 2 000 2 500 3 000 100 200 300 400 500 600 FY 2015 FY 2016 FY 2017 Net Operating Revenues EBIT, underlying

MNOK

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EBIT Bridge Y-O-Y

MNOK

100 400 200 300 500 600 EBIT FY 2016 Increased capacity Employment benefit expenses Billing ratio Other effects Calendar effects EBIT FY 2017 Other opex

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Segments FY 2017

International

FY 2017 FY 2016 Change

EBIT MNOK 17.3 11.1 55 % EBIT margin % 9.7 % 11.5 % 1.8 pp Billing ratio 71.5 % 65.6 % 5.9 pp Number of employees 216 130 66 % Greater Oslo Area

FY 2017 FY 2016 Change

EBIT MNOK 64.6 125.1 48 % EBIT margin % 4.9 % 10.5 % 5.6 pp Billing ratio 67.0 % 70.0 % 3 pp Number of employees 1 179 879 34 % Regions Norway

FY 2017 FY 2016 Change

EBIT MNOK 13.0 37.3 65 % EBIT margin % 1.3 % 3.9 % 2.6 pp Billing ratio 67.3 % 68.4 % 1.1 pp Number of employees 841 793 6 % LINK arkitektur

FY 2017 FY 2016 Change

EBIT MNOK 25.5 9.9 >100 % EBIT margin % 5.2 % 2.9 % 2.3 pp Billing ratio 72.4 % 71.4 % 1.0 pp Number of employees 475 420 13 %

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Operating revenues by business area FY 2017

Multiconsult group % of

total FY 2017 MNOK

47.9 % Buildings & Properties Significant contribution

1 615.5

Transportation Strong contribution 23.2 %

782.6

Renewable Energy Good contribution 12.8 %

433.1

Water & Environment As expected 6.9 %

233.0

Industry As expected 6.1 %

204.3

Oil & Gas As expected 3.2 %

106.8 3 375.4

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Cash flows FY 2017

  • Solid cash flow from operations
  • Change in working capital driven by

– Increased trade receivables due to increased production

  • Investments

– Acquisition of Iterio AB and the Hjellnes group – Ordinary asset replacement

  • Financing

– Increased debt due to acquisitions – Dividend payment

50 100 150 200 250 300 Cash beginning

  • f the year

CF from

  • perations

Change in working capital CF to investments CF from financing Cash YTD Currency

NOK MILLION

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Maintaining good profitability Revenue growth International expansion One Multiconsult (One group)

  • aarhus arkitekterne, Iterio, Hjellnes group

have contributed significantly

  • Fairly positive market outlook
  • We are according to plan both in Sweden and in

Renewable Energy, however the major transactions are still ahead

  • Our profitability is not satisfactory
  • Billing rates are still under pressure
  • Billing ratio is not meeting target
  • Significant progress in integrating the new

companies into the Multiconsult group

  • Need to work continuously on building a

common culture

Performance compared to strategic ambitions

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Competitiveness

Pressure on profitability continues due to tough competition in the industry

Income

Hourly rates and billing ratios are under pressure

Cost

Operating costs and labour costs continue to rise

Billing ratio Hourly rates Wage cost

64 66 68 70 72 74 3Q 2016 1Q 2016 4Q 2014 1Q 2014 2Q 2014 3Q 2014 4Q 2015 2Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017

Profitability has been challenging

2013 2014 2015 2016 2017 +1% 2013 2014 2015 2016 2017 +10%

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Group target: 2018 EBIT margin to minimum 6%

Improving operations for Greater Oslo & Regions Norway Sales

  • Further develop

strategic sales team

  • Key account

management program

  • Prioritised tendering
  • Stricter pricing criteria

Billing ratio

  • Increased sale
  • Aligned procedures
  • Reduce internal

activity

  • No integration of new

acquisitions in Norway

Project execution

  • Continue already

established programs

  • Improve client

communication

  • Benefit from improved

transportation market

Efficiency gains

  • Release synergies from

new ERP system

  • Fully integrate existing

acquisitions

  • Further focus on cost

reduction

  • Manning control
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Improving EBIT margin towards 2020

2017 4 % 8 % 12 % 2018 2020 2019 10 % 6 %

  • Acquisitions of new business not highly

integrated

  • Further increase in billing rates
  • Benefits from a significantly better strategic

position in Norway

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Vikingtidsmuseet – best BIM-Idea 2017 | Ill: AART architects

Outlook

  • Outlook remains fairly positive
  • Continued strong competition and price pressure on large projects
  • Market rates have increased in Norway, regional variation
  • Increased employee cost in Norway not fully reflected in billing rates
  • Stronger combination of professional capability and stable order backlog
  • Active and systematic implementation of the 3-2-1 GO strategy
  • Growth focus on Sweden and Renewable Energy
  • Consolidation and integration of the Hjellnes group in Norway
  • Intensified focus on improving profitability
  • Profitability program initiated
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FINANCIAL CALENDAR Annual report 2017 12 Apr 2018 Annual General Meeting 3 May 2018 1Q 2018 results: 23 May 2018 2Q 2018 results 23 Aug 2018 3Q 2018 results 8 Nov 2018

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Q&A

FOURTH QUARTER 2017 RESULTS | Christian Nørgaard Madsen, CEO Anne Harris, CFO

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