Bouvet ASA

I would like to welcome you to the third quarter presentation in Bove. Welcome to those of you who have finally come here. And welcome to those of you who are on the stream. It's been a long time. Last time we had a physical gathering. Now we are back to the fourth quarter. 2019, which was presented in February 2020. That was the last time we had it physically. So this we have put forward. My name is Per Gunnar, Per Gunnar Tronsli. Together with me I have Trude, Trude Hole, who is the financial director. So I'm going to tell you a little bit about the quarter. what we have been doing, how this has gone, and then Trude will tell a little more about the numbers. And the way we were going to do this is that, since we have a mixed setup with physical location and we have the stream, we thought we would run the presentation, and then we take questions and answers, after Trude and I are done. Because then those who are on the stream will also get questions and answers. And then we have some microphones, so we can send it around if any of you have questions. Good. Then we go to the third quarter. We are very, very pleased with the quarter we have behind us. We have achieved a solid growth in operating revenues of 12.5%, and we have also grown operating revenues. We are also very happy that so many people have come to Bovee and want to be a part of this. Since the second quarter, we have had 85 new employees. And from a 12-month perspective, for those of you who have followed us, you have seen an even increase in the pace of how employees flow to Bove. And right back in Q4, when we presented, that pace has only been increasing. And then we had a fantastic third quarter in relation to the increase in the number of employees. I would also like to say something else about these numbers. We are very proud of the increase in profitability and operating revenues. What we compare is the third quarter of 2020. The third quarter of 2020, we all know, was a very, very special quarter. We had gone down in the pace of how many people started to live there. And everyone knows how the situation was in relation to social activities and joint activities that cost money. Among other things, we usually have independence tours in the third quarter. That was nothing of the third quarter 2020. And then comes the third quarter 2021, which we are talking about here. And then we are fantastically proud to be able to tell that When we delivered Q3 2020, which was historically special, we had an EBIT margin of 10.6. And when we now report Q3 2021, it is unchanged at 10.6. And now some costs have come back. In addition, we have had many more colleagues. And everyone who knows about in-fasing in assignments and so on knows that it tends to require a lot. So we are just very proud that we deliver the same profitability. So those were the highlights from the third quarter. Our vision has followed us for several years. It is about moving forward and building the future society. And we have done that this quarter as well. We have supported our customers. in many areas. We have assisted our customers who work in the energy sector in the shift in the energy transformation that they are involved in to be more renewable. We have assisted our customers in energy and electricity supply in relation to the network expansion that we have seen. I will come back to that later. We have assisted our customers in the public sector and defence. in the public sector, in terms of building even better services for all of us. We have contributed in health, to support people in all phases of life. We have contributed in transport, to build even smarter transport solutions. In short, we have done a lot that is about building the future of society in this quarter. Our long-term goals, they have also been with us for a long time. For us, the most important thing is to work to build the world's best workplace. It's about having a workplace that people come to, where people want to be, where people want to develop. Where people can work together, share competence, and in this way get the development everyone wants. And to be part of a competence journey with the important and good customers with us. And when we talk about the world's best workplace, I just have to say Even though there are not so many employees in the group, many of you may follow us. Thank you very much for the effort you have made, for the results and the value we have contributed to this quarter. And then we have our customers. They are important. They build long-term customer relations. We care about those customers and we prioritize them. We want long-term customer relations. Later in the presentation, we will go into how we have delivered more and more to our customers. We also have building a successful business. It is about long-term and responsibility. It's about supporting customers in the development of society. It's about developing and working for a working environment that includes and is diverse. It's about building a successful business so that we also develop ourselves and make money. And that is what we do, and that is what makes us able to invest in people and customers, build new skills, and become even better at what we are good at. So that is the whole idea, simple, but also demanding and exciting. No, I forgot that. The confirmation. We got a fantastic confirmation this quarter, where there is an analysis of attractive employers. And to work for being the environment that people see us as, and that people want to be part of on a trip, that is the core, and it is fundamentally important for us. And in this third quarter, this survey that places Bovee together with Household names such as Microsoft, Google, Aker Solutions and Finn, we are very proud of. We believe this is about the work that is done by each BOE every day. It is also about having a workplace that people are proud of. As a company and as colleagues in BOE, we are very proud of this. Then we will move on to what is the quarter. When it comes to the split between public-owned companies and private-owned companies, we have seen through the whole pandemic, we have seen a gradual shift to public. And we have seen, and that is quite natural, the public sector has invested heavily through the pandemic, and we have received many assignments that are about supporting those businesses in building new digital services to support exactly what comes out of the pandemic. We see it with the Oslo municipality, we see it in the municipal sector, we see it in relation to taxes. There have been many new orders that were to be implemented. All this has required increased activity. What we see in the third quarter now is a shift back. So what grows most with us now is the private sector this quarter. Nevertheless, we are very happy with the balance we have. Good balance. This will shift back and forth. We have always been 50-50, plus minus. But now we see a slight change to the private sector. If we look at the industries we are engaged in, we are very happy with the industry we have. It gives us more legs to stand on. It gives us more learning that we can take. with us, between industries, and it also gives good development opportunities for the people in Bove. This means that you can be in projects in one sector and one industry, and learn new things and new domains. In this way, it is important. The division we have in the industry is relatively unchanged, apart from the fact that we see that oil and energy is developing faster than the other industries, so it has taken a relatively large share. This is about the energy transformation. We have, among other things, one very large customer, which is Equinor. They are in the middle of a shift, where they go from being a more traditional energy company connected to oil and gas, to becoming a large energy company with a broad renewable portfolio. All of this is about digitalization. So that is the background for the development we see in the oil and gas sector. We usually bring with us some of the things that have happened on the supply side and project side in the quarter. And those who were with us in the second quarter, I think it was, we talked about Statnet's mission to build, to contribute to a better energy collaboration in the north and in Europe. And then we talked about a research cable that was placed from Sørlandet over to Schleswig-Holstein, which connects Germany and Norway. Now, on the 1st of October, NOSI Link went into production. It is a collaboration project between Statnet and National Grid in the UK, which is about improving energy collaboration across the North Sea. The whole point here is that when it's windy in Great Britain, we get energy from the UK. Then we don't have to use the water. When the wind conditions are calm in the UK, we sell power from Norway. It was tested. Important. Important for Norway and important for cooperation with the UK. Langkabel, 720 kilometers under the sea, a great project. Here we have a team that works with the digitalization solution that controls these connections. I'll get back to that later, but that's a very small part of what we do at Statnet. Here we work with the market systems and what balances the network. I'll get back to that later. Another customer project pointed out that there is a growth in the private sector. Jotun, we all have a close relationship to. Many have given up during the pandemic. And this is about all these mixing machines that are out in all businesses. They have some recipes in them. And the distribution of these recipes will be streamlined. So it's about having a team, a multidisciplinary team, from advisors to designers to UX-ers to system developers, that sits closely together with the customer and together with Jotun, we develop a solution for this in the future. Again, this underpins our idea of closeness to the customer. A little about our sectors. I mentioned oil and gas and the growth in oil and gas. It is about energy transformation. I wrote a little about the word of the head of the company when you are going to build windmills and so on. Digitalization solutions are crucial to create profitability. That is why digitalization is so important in this shift. It is about market systems in addition. Publicly, some down. In that, we talk about the defence. We talk about the directorate for civil readiness, the work directorate, and so on. And then we have energy supply. And the growth of energy supply has developed in the last few quarters. I talked about these sea cables, and as I said, they are a small part of it. As we hear about the expansion of battery factories and so on, and we get more energy sources that go into the network, balancing and market systems become more complex. And that is a lot of what we work with. So this is about the entire value chain in the energy transformation that we work with. And that has so far started. The expected pace of the expansion and the increased complexity of the network is only increasing. Then we have information and communication. The biggest customers there are two examples. It is Cognite. Cognite is an accurate company. It is a data platform. It is a data platform for the industry to exploit and take value from the data that is created. Here we are in collaboration with Cognite, so out in customer implementations, we bring in the data sources and then we put value increase at the top of Cognite's solutions. Another example is Easy. Easy, which everyone knows from home chargers and electric cars. There we make the charger solution, the digitization element in it. And that's not just home chargers. They go into the industry and make chargers for the industry. They talk about the electrification of colors, for example. That's chargers for the industry. So that's what we work with there. A lot of exciting things. Then we have talked about that our customers, the biggest customers, they buy more. We are happy about this. This is about several things. It is about having customers where digitization is crucial for the development of the business. That is one condition. Then it is about us is deep within the businesses and crucial for them to succeed. It is about delivering more of the multidisciplinary competence that we have at Bovee, so the customer buys more of Bovee to cover more competence areas. That is the background for us to grow most on the customers we have. That's what we want, it makes us get more important tasks, we get more responsibility, and we get closer to the core business with the customers. So it's a very positive development that we work hard for. Naturally, if we prioritize the customers we have, there won't be that many new customers. But there are some new customers. An example is a customer who has come up among the largest in the public sector, is the former rural man's apparatus. What was it called again, Trude, do you remember? Statsforvalteren, fellestjenester, det er en av de nye kundene som har kommet der. We believe in the closeness of the customer. And that is how Bové has always developed. We have been close to the customers, we have grown with the customers, we have developed skills that are adapted to the customers we have in the local markets. And that is how we have grown and developed together with the customers. That has given us a lot of good. We have come close to the customers, we have learned to understand the customers, we have learned to understand the customers' domain. At the same time, it has given us a good starting point to attract our competence throughout the country. When we look at the development we have, you saw what the growth was in the number of employees. If I just comment on that, then it is the largest relative growth. Then I would draw up Rogaland, Bergen and Region Nord as relatively speaking to have the largest growth. And then we are very happy that, I will mention one, and that is Rogaland, which has had over 600 employees in a market that is not as large as Region Øst. So that says a little about the market position of Rogaland in the Stavanger region, Stavanger and Haugesund. And then, This is about people, that we have an environment, a competence environment, and that we have colleagues who attract more and more good people. We are incredibly proud of that. This quarter we have had many new colleagues. And I mentioned that you who have followed us for a few quarters have seen how the pace of how we attract people has only been increasing. This quarter, if you look at the 12-month period behind, was 183. The quarter before was 154 in Q2, Q1 was 109, and Q4 was 99. That's the graph at the bottom left, or to the right for you. It shows how we have been able to attract people, and also keep people. This is the number of employees, in total. So, that was pretty short, what I had thought about how the quarter has been. Then I will give the floor to Trude, and then we will try to make this shift with technology.

I'll take a look at the figures. I'll take a look at the figures. I thought I'd go over the key figures first, and then the operating revenues, and then the operating results before we move on to the content stream. If we look now, the key quarter has a turnover of 583.6 million, which is compared to 518.9 million in the same quarter last year, which is an increase of 12.5%. The turnover total was 61.6 million, which is a turnover margin of 10.6. which is the same period as last year. Despite the fact that we have become more employees, and we are on our way out of the pandemic, the costs have increased. If we then dive into the operating income, they have increased by 12.5% and it is the most important part of our income that comes from our own consultants, which is 14%. They stand for 85.8% of our total turnover. That means that the operating income from consultants has risen to 500.8 million kroner. As far as underage pension is concerned, we also had an increase of 5.2%. That means we had an income of 66.3 million, and now they are 11.4% of our total turnover. Otherwise, we have surplus income of 16.5 million, and this is a very small share of our turnover. It is the largest income for our own employees, so we had an increase of 14% compared to last year. It is interesting to see that compared to the general turnover increase, which was 12.5%, we see that the biggest growth is among our own employees. The positive effect is an increase in the hourly rate of 2.4%. together with last year. And if we look back at Q2, then we have had an increase of 0.6% between Q2 and Q3. And we still have a very good demand for our services. We had an increase in the rate of return of 1.3% per point. And that, together with last year, which was also a very good quarter with a high rate of return, we have had the same number of days in those two quarters. If we dive even further into the changes in the operating income, we can see that the increase we had at 10.9% among employees has given an increase of 46.6 million. The fact that we had an increase of 2.4% in the hourly rate has given an increase of 10.4 million. And the fact that we had an increase in turnover of 1.3% has given an increase in revenue of 7.1 million. To take a look at the income, we look at the results. The operating income was up to 61.1 million, with an increase of 11.5% compared to last year, which was also a strong Q3. There was a operating margin of 10.6% compared to the period last year. The operating costs have increased by 12.6% compared to last year. And we had a general wage increase of 2.9%. This can be attributed to an increase in the hourly rate of 2.4%, where the difference is then less than in Q2. And we have a very high focus on the hourly rate development. One difference is also between the COVID pandemic and the increase in operating costs, and that is a passing effect, so we will look a little closer at that. If we then, hopefully, are on the way out of a COVID-19 pandemic, Then we can see how the cost of development is in the quarter. They have had an increase of 69.6 percent compared to last year, where we were in the middle of the pandemic. The increase has been in travel, courses, recruitment and social gatherings, totaling 19.9 million. Travel is a small part of it, while courses, we have started with a lot of competence development, and it is nice that people gather again. The society opened at the end of the third quarter. We have also increased the recruitment rate, we have become many more employees, so we have a focus on recruitment all the time. The overall operating costs have increased from 24.3% to 24.9 million, compared to last year. If we look at the results of what we saw, that is, the income changes, we see that the most important thing in the quarter is the increase in the number of employees, which we increased by 10.9%, which gives a positive effect of 12.9 million. An increase in the team price, which was 2.4%, gave a positive effect of 8.1 million. An increase in the shareholding with 1.3 percent points gave an increase of 5.5 million, or a positive effect of 5.5 million. Finally, we can look at the operating profit, which was 28.9 million this quarter, which is lower than last year, which was 41.3 million. This quarter, as you can see, is relatively normal if we look back at the period before the pandemic. We can see that the last 12 months have accumulated, and the constant current from operation is 291.3 million, and if we compare that with the result after tax for the same period of 24, it is 249.1 million. Those were the figures, a bit of a deep dive into them. Then I will give the floor to Per Gunnaren, who will tell us a bit about the outlook.

Thanks for having me, Trude. We talked a bit about this initially, but a lot of what drives our activity, and we look at our customers, a big driver is the whole complex that happens around energy transformation. This is about The network development, the energy collaboration with the Nordic countries and with the rest of Europe, and the inclusion of constantly new energy sources. And the increased complexity that this creates in the whole picture, drives a lot of digitalization. And then it is very good to know that those of you who have seen how we are engaged in the two sectors that we talked about, that is a main part of what we do. And we see that has a very increasing activity. And we strongly believe that continues. We I've talked about it before. We deliver more and more of our deliveries. They are about the diversity in BOV. This means that we deliver more and more a team that uses everything from strategic advice, everything from design, design of solutions, everything from UX, everything from system development, test, project and process management. That is the diversity. Not to mention security, platform and so on. That diversity is what our customers are looking for. So a bigger and bigger part of our deliveries is that we deliver It is positive. It is positive for the customer. The customer gets a team that is coordinated. It is positive for Bovere. People like to work together with good colleagues, and we are constantly increasing that. And it is also good, as I said, that it is the customer who asks for this. We were going to say what we have the most requests for, and we got a bit confused, because we actually have a lot of requests for all areas. So, a lot of requests for everything we can deliver. And the last point, which I have mentioned many times, is job number one. And that is to maintain and ensure the development of people. And that people are in a working environment and in a business that takes care of them, the community, and together develops the competence. And of course it's about making sure that the environment is attractive, and that people come to live there. That is job number one. It is a big job. We are in a market where technology development, concept development, method development is going really fast. So we have to invest in competence. We do that. That is the difference. That is our differentiator that makes people both become and come to Bove. Then there is the fight for talent, and therefore this job is important. We have to be competitive and differentiate ourselves, that's why we invest so heavily in this. So that's how we see the world, and how we see Q3. What we were going to do now is also a first exercise, but we were also going to open for questions and answers. And then we have some microphones. The microphones are actually not for the room here. We hear what we say, but it is about those who are on the stream and are sitting at home in offices and on the kitchen table also being able to participate in the question and answer round. So, and then you who are here physically, you are privileged, because it is you who can ask questions. So there is a question. Then it is Jørgen, Jørgen Stenshagen. How is the course business going? It's going well. We usually talk about it. We just didn't bring it in right now. But the story we have shared along the way has been that it has gone from an out-of-the-box fysisk aktivitet til å bli en heldigital. Men det som vi jobber med nå, det er å tilrettelegge den kursvirksomheten for å ta in over seg noen fysiske elementer med det digitale. Så der driver vi også product and service development. But unchanged in terms of economic status. So earn good money, big demand, and there is a lot around method, agile, smooth, Would you say something about Sweden and Sesam? Sesam's focus is to build product, and that is to build product in the sense that we deliver it as a service. The focus is to build up the network of partners and integration partners that use SESAM. And that's going well. We have 10-12 partners on that now. Actors like Cognizant, Cognite, Sicri and others that use SESAM. Tjener penger bygger det som vi kaller monthly recurring revenue. Det er jo det som er KPI'en der i motsetning til det som er i øvrig virksomhet. Positiv utvikling på det. Det er jo det som jeg vil si om det. Sverige. So far this year we have had some low activity. When we look at Q4 and the end of Q3 now, activity has gone up. What has been the shift there has been that we have recruited more within system development and technical services, where we previously had more project management and advisory. So that's a focus there, actually, to build technical services. So that's that. Other questions? Since there are a lot of owners, I have to ask you if you are satisfied with the development there. That's good. It looked a bit strict, so I was a bit unsure. But if there are no more questions, I would like to thank you for the meeting here, and thank you to all of you who have followed us on the stream. It is so good to have such gatherings, and to wish people well home. We haven't done that for a long time. We will see each other again right after the change of year, and we will tell you about Q4. I hope to see you here, and even more. Thank you very much.