Bouvet ASA

Yes, then I will be allowed to welcome you to the fourth quarter's presentation in BOV. My name is Per Gunnar Tronsli, and together with me I have Steffen Garder, CFO. I will tell you a little about what we have done in this quarter, and then Steffen will go a little deeper into the numbers. Welcome. I'm very happy that so many of you have come to Sørkedalsveien. And welcome to all of you who are on stream and follow us from there. The way we do this, we do it the usual way. We tell and present, and then we take questions in the end. And then we have microphones, so those who are both at home and in the hall get the questions. Then. Let's get into it. 2024, we wrote that in the quarterly report, is historically one of the strongest years for BOV. In the quarterly report, we increased our operating revenues by 5.8% to just over 1 billion, 1.26 billion. We are proud of that. And then we increased the operating results with 11.8 to just under 119 million kroner. And that gives an EBIT margin of 11.6 in the quarter. In total this year, we reached a terrible close to 4 billion, so we came in at 3,921,000,000, and that is a growth of 11.2%. And then there was the operating results This year it increased by 20.5% and we came in at an average of 490 million kroner. That gave us a strong year. Very strong. An EBIT margin of 12.5. We also had a good year last year. That was at 11.5. So it was one percentage point up on the EBIT margin for the year in total. And then we have the number of employees, and the whole of 2024 is a year that we have had relatively low growth in the net number of new employees. 49 per year. We had a decline in the quarter, in the fourth quarter, which I will talk a little more about. But the basis for understanding the number of employees and the development there is that historically we have had a very low turnover in the entire business, and we have had a stable low turnover throughout the year. So that development is based on reduced recruitment. active, gas and brake. We are trying to adapt to be at the forefront of a development we see, and the organization has also managed to adapt. So it is a function of active control of operational operations in all regions. But I will say a little more about that later. And then, due to the development of the company and financial position, the board has decided to propose to the General Assembly an exchange rate per share of 3 kroner. And then for payment in the first half of 2025. Last year, at the same time, the same quarter last year, we talked a bit about artificial intelligence. And then we were hit by a... Artificial intelligence and generative AI had hit everyone's lips. And everyone was concerned about that. And we have continued to work a lot with this. What we are working with now, and will continue to work a lot with in the future, a large field and affects a lot of large parts of our business and the way we work. And now it's about taking these advantages out in customer projects in the way we deliver. At the same time, how we use Generative KI to improve our operational business. It is about learning to use AI in our development projects and in our advisory tasks, and how we benefit from this in our own business, in how we write offers and how we process reports and documents by using these tools. This requires a lot of competence, and we work with that a lot with our customers. There is an enormous demand from the customer side for competence in the area. We also work with our own competence. When we work with customer intelligence and generative AI, it is important to rely entirely on the technology alone. is not enough, so this is about getting used to working in good collaboration between technology and people. We do that, and we also work a lot with what is about the direction of use, safe use, safe use, and use in relation to what we have the opportunity for, both in customer agreements, with safe data treatment and secure data treatment around the use of technology. This will be crucial for our entire business. And what we see ahead of us this year, will be a strong focus in our business, as well as in many other competence businesses. Let's take a look at the trends. Again, those of you who have followed us, you have experienced that in certain periods, we have had a continuous shift, for example, towards the private sector. But those who have been involved in our subsequent quarterly presentations have seen how we have, over several quarters now, strengthened ourselves within what we call public-owned companies. In our quarterly report, we talked about two completely fundamental steps in our entire social development. We talked about energy supply and electrification, and we talked about security and defence. And these two main features are underlying to the development we have seen here now in the growth in public ownership companies. And then you can imagine where that growth comes from. It naturally lies in how we build out and strengthen our network supply and electrification through, among other things, state networks. and what happens within defence and security. And one of our biggest customers is just defence. So that is what underpins this development. So we have a growth of more than 10% in the public sector, and a 2% growth in the private sector. This will probably turn the other way as well. In our sectors, I will come back to talk more specifically about customers. I will just draw up exactly the changes that have happened now in this quarter. And then I have to highlight what is happening within energy supply, and there you will see that we have had a rise of 2 percent points in relative proportion. And then we have a positive development also within what is public administration and defence. In reality, there is a lot of defence that drives this positive development. And then oil and gas are stable in relation to a relative share compared to previous quarters. Then you can comment on the fact that a few quarters ago, you have also seen how the relative percentage of renewable oil and gas has been reduced. It has been up over 44% and now it is down around 40%. We use these opportunities not only to present figures, but also to tell what all these more than 2,300 employees in Bovee actually use their time on, every single day, in order to build an even better future society. So we have picked out some customers and deliveries that we would like to talk about. We thought it would be good to start at the top with Stortinget. Stortinget is a customer that we have had here before. We got a new contract there earlier in 2023. And it is a customer we work with a lot on what we call strategic advisory. But we are also a company that works within IT and digitalization, so it is strategic advisory within the IT and digitalization domain. So IT-strategy, project management, project support, assistance in architecture, inquiries, that's what we do at Stortinget. And Stortinget, A little different from some of our other customers, often we work with the same strategic advisory, but we also have realization elements around that we develop technology, while Stortinget is a customer where we work exclusively within the strategic area. So there we get the opportunity to provide good advisors in Bove, who work towards Stortinget's own employees in their own strategic work. In the fourth quarter, we got a new agreement. Very proud and happy about that, so that means that we will be working with Storting for several years to come, together with some other actors in the area. That was Stortinget, and then we often talk here about the fact that the Defence Ministry is an important customer of ours, but another customer that is not subject to the Defence Ministry is NATO. And NATO is a customer of ours that we have been so lucky to work with since 2011. And then we work with a system called NEXIS. In the military language, it is called command and control systems. And this NEXIS is command and control systems for airborne NATO capacities. That is an incredibly exciting domain. This is about understanding the situation and coordinating air capacities in NATO. A large part of what this system works with is the unmanned part, the drone capacities in NATO. This is a lot about information collection and recognition. The system we work with is about everything from the operational to the tactical, to implement and plan these tasks and collection of information. It was actually about, if anyone read the newspaper today, Aftenposten, there was a defence study put forward now, and then this defence drone capacity was just mentioned. This system, it is we who are so lucky to be allowed to develop together with NATO. And then we have a number of cooperating nations under NATO that we work together with on this. And then it is run and managed, or run by NATO, and they have their unity for that business on Kolsås. And then it's exciting to be allowed to work with something like that. What we know is that there are great ambitions here. This has then rolled out to a number of NATO nations, and much of what we are working with now is just about expanding functionality, and not least making it even more accessible for deployment. and rolling out in other contexts. Sweden is the last nation to get involved in this, and we have other partners, so there will probably be new nations involved in this. An exciting domain. Then we have what happens on our pedestal. Offshore Norway owns and manages a solution called Collaborate. And Collaborate is a platform that deals with all and collection of information from all our businesses in the Nord Stream. Um, This means that what goes through this solution, and this is a solution that all operators and partners on the base must relate to, and then all reporting of production that happens on the base goes through the solution. This also means that it is the basis for all distribution of income costs. There are complex value chains in this. This happens in the background of this solution. All reporting of drilling activity on Norwegian soil is reported through this solution, so that the authorities can follow up on the follow-up of this with submitted licenses. Lawful reporting of all gas production in Norway and that goes to Europe. That is the basis for a lot, among other things tax accounting, and all economic reporting, and all reporting that goes from Nordsjøen to what is called the Sockeldirektorat, where they get information that they use in the implementation of budget and revised budget for the Norwegian state. So this is a completely central solution. In the fourth quarter, we renewed this agreement for a new six years. and with the possibility of further extensions. An exciting solution, an exciting theme, a domain, a data platform for large, socially-critical data streams. And then we have a customer that we have had up here before, that we work a lot with. We have been so lucky to have worked with him since Ban Nord in 2005, so he is one of our real customers that we have worked with for a long time. Baned Nord is responsible for the management, operation and development of all rail infrastructure in Norway. And at the top of that infrastructure, there is a service provider that drives trains. In that infrastructure, there is a lot. There is physical infrastructure, there is a signal system and so on. We work with those systems. which are in many different areas, but train implementation in Norway, what those who drive the trains and those who sit in the control rooms use for train implementation, we make those solutions. All long-term planning is route planning in Norway. It's about route planning and setting up new trains. And that is covered by the solutions we work with. The fact that we as travelers get information about when the trains arrive and when they have sunk, that flows through the solutions we make. And when Banet Nord makes an infrastructure available, there are many service providers that run the trains. All the energy savings in relation to how much they will pay for energy consumption. The solutions used in Norway and a number of other European countries are developed by the Bovet team. What is great about Bane Nord is that we have a large team here, which is under our leadership in cooperation with Bane Nord's development department. We also have the leadership of a number of teams consisting of a number of other suppliers. So a good customer, that we appreciate working with. Every year, we carry out employee surveys. We also carry out more frequent surveys in projects and so on. But once a year, we carry out our large employee survey. We did the employee survey this year in the fourth quarter. And we are very happy. It is a high response rate, so we are close to 90%. I would always want 100%, but we are close to a 90% response rate. And we are at a high... happy for high employee satisfaction. It is important for us to work for a working environment where people enjoy learning and development. If I were to draw something out that I am especially happy for, it is what is discussed in the survey as loyalty, and it is really about whether people want to be in Boe and enjoy Boe, and are going to be in Boe. And that is at a very high level. So we are happy about that. Now it should be said that we are not doing these measurements to be able to tell you about this. This is not the primary goal. The primary goal is to have an agenda that all the time is about that we should develop ourselves in the right and good way for the people of Bove. That's the most important thing. That's what BOE is. It's really just a gathering of very good people. So the fact that we have a lot of focus on this is really the most important thing. And then our course business. It has had fantastic speed in 2024. We had a record year in the course business in 2023. It has continued, so the development in 2024 is on the same level. In those locations, you who are here physically, this is in the course business. So here it flows through, in the years behind us, we are over 7,000 people who have been involved here on the course. We have held, as it says, 566 courses, and 29% of these, a third of them, are courses where companies come in with several of their employees and have what we call a corporate course here. This is a course that deals with We are an IT and digitalization company, but that means that we work a lot with organizational development, organizational change, change management, team management, all the way to the more technological subjects. All of this is part of the course compendium at Bove. It is important for us, it is important for our customers to come. Here you have the opportunity, if you are going on a course, and I would recommend here, here you have course holders who come from real life, who work in assignments with exciting customers and in large social projects, then they come in here and run some days with courses and share their latest experiences. In addition, it is our course business. I talked about the fact that there is a great demand for artificial intelligence. It is artificial intelligence, data platform. It is down here, the breakfast seminars. We arrange everything through the course business. So in the year behind us, we have had almost 3,500 people involved in everything we have done with breakfast seminars and such activities. A nice sharing arena. That's important to us. A little more about our sectors and which customers we work with. Oil and gas and renewable, relatively stable. However, even though we see a 5% there, it is clear that it is a large sector, so in absolute values, this represents a significant development. The customers we work with there, Equinor is large, it is our largest customer. In addition, we have customers whose ID has increased activity, which are Aker, Aker BP and Gasco. Energy supply, it has been in many quarters now, we have been able to talk about increased activity there. And there we work with suppliers, or with businesses in many parts of the value chain. I have mentioned Statnet, they build the national network and international connections. and the strengthening of the national power grid. In addition, we also work with those who deliver in the Norwegian market, service providers in the Norwegian market, such as Elvia, Å-Energi and Skagerak. This quarter, we have had the most activity and development in companies such as Å and Skagerak. Public administration and defence, a moderate growth of 3.4%, but a lot of it is about defence. It should be said that the public sector has had, and we have seen that when we look out the window and see how it goes with different competitors, we have seen that the public sector has been talked about as having been a lot of decline. And for some customers, we have seen the same. So it's not like we're unmoved by it. We are absolutely moved by it, but what compensates is the increased activity we see within especially defense and security. And then the service providers. The biggest customers there are Innovation Norway, and Norske Kirke, and so on. They are the ones we have the most activity on there. And Viking, not least Viking. The customer we have had the longest in Bove. Our customer mix, now it is like this, that 67% comes from the 10 largest customers in Boe, and the 20 largest, that makes up 76%. I have said many times that this is what we are very happy about. There are several reasons for that. The only reason is that it makes We as a company, and we as advisors and developers and so on, we learn to know the domains of the customer. We learn to know the customer. This means that it is easier for us to take on more tasks, and we get more trust, and we take on more responsibility with the customers. So that is a very positive thing. Then I would like to say something else, that the ten largest customers also take on an essential responsibility in relation to the fact that we want to strengthen IT competence in Norway. And these customers, there we have the opportunity to deliver teams, combined teams of multidisciplinary character. And then we have the opportunity to bring in new graduates into these team deliveries. So our collaboration with these customers, I mean, it's good for the customers, it's good for, and it's good for BOV. We get to work as a BOV team. but it is also good for the development and construction of competence in the Norwegian IT market. So that's what these customers do. I just want to emphasize them a little, because they really take a social responsibility for that. So when you have a lot to do with those customers, it becomes a little bit of the rest. We are very comfortable with that, so sometimes we take some steps, and this quarter it is especially Innovation Norway that has developed to become a large Bovee customer, which we work and deliver from both Oslo and Rogaland. Then we have closeness to our customers. If I were to comment on the last year, now I come to the number of employees. The first perspective is if you look at where we have had the greatest development in the year behind us. This is a year where we have had a slower pace in our recruitment work. At the same time, when we look at 2024 under 1, I would like to emphasize that especially where we have seen good activity in recruitment, it is especially Rogaland, the north, the south and Aksjøs, Buskerud and the inland, where the activity in recruitment has been the largest. We can see the development here. In 2024, we had a net growth of 49 in the number of employees. As you can see from the graph to the right, in the long run backwards, it is low. A couple of things about that. I said that we have low turnover, so this year we have historically low turnover. So it's not that people stop living, but what we had in December, in the last quarter, we had a decline in 2009. It's a small gap compared to the last month, where we had some that ended, but still 29 down. That's what I have to say about that. But yes, that's what I was going to say. When we look around us, we see that some of our competitors have had a significant decline in the number of employees. We have the growth of the 49, and we have had a very conscious relationship. We are talking about gas and brakes. We have adapted our speed so that we adapt recruitment in relation to the amount of work we have every day. So that is actually the background for that development. And then we will talk a little about speech.

Let's talk first about the fourth quarter and then about the whole of 2024. As you can see, the fourth quarter ended in isolation, with 1 billion and 26 million in revenue, an increase of 56 million kroner, or 5.8% compared to the same period last year. This is a strong increase, despite one less working day. If you count the working days, in practice, we see that there were probably many that were a bit earlier. So I know that some of you have commented that it is up to two working days. So in practice, it is probably closer to that than 1. For the quarter, the end of the operating result ... ... towards the same period last year, there was an increase of 13 million. It gives a drift margin of 11.6%, up 0.6 points to Q4 2023. If we look at the year under 1, we had a revenue of 3,921,000,000 kroner, an increase of 396 million kroner, or 11.2% to Q4 2023. Also for the year under 1, there was one working day less than 2023. The operating income for 2024 was 490.4 million kroner, up 83 million kroner, a total of 20.5 percent compared to 2023. The annual income ended at 383.4 million kroner, which gives the result per share of 3.69 kroner. And as mentioned earlier, an exchange rate of 3 kroner per share against 2.60 kroner was proposed at the same time last year. Netto Kontantstrøm from the company was for the year 865.1 million kroner, a significant increase compared to last year, which can mainly be explained by a calendar effect. We'll get back to that later. The operating revenues increased in the quarter by 5.8 percent compared to the same quarter last year. If we break that down, we see that the growth comes from our own consultants, where the turnover increased by 8.3 percent and gave operating revenues of 927.8 million kroner in the quarter. The turnover from our own consultants reached 90 percent of the turnover in the quarter. The turnover from sub-consultants has dropped from 11.6% to 84.1 million kroner. The relative share of the turnover from sub-consultants continues to fall and has reached about 8% of the turnover in the quarter. This is in line with our strategy, where we primarily want to develop the company with permanent employees. Existing revenues, also a return in the quarter of 22.3%, and give revenues of 14 million kroner. The decline is mainly due to lower license revenues. Let's look at the drivers. The graph in the lower right corner shows the drivers behind the increase in turnover for self-employed employees. The biggest effect you see is that the growth in the hourly rate has increased by 5.7 percent, which gave an increase in the salary revenue of 47.9 million kroner. After that, the number of employees increased by 2.5 percent compared to the fourth quarter of 2023. This means that 57 more employees in the last 12 months have increased their turnover by 20.7 million kroner. This is a good follow-up question. After BOV's services, the rate of invoicing has increased by 1.5% and that gives 14.5 million kroner in increased turnover. And then there is this one workday that I already mentioned. It has a negative effect of 13.3 million kroner. Moving on, let's have a look at the operating revenue, EBIT. As mentioned, the operating revenue was 118.9 million kroner per quarter, an increase of 11.8. Total operating costs, including deductions, were 907.1 million kroner per quarter, up 5.1%. The biggest increase was the staff costs, with an increase of 7.9% to 713.4 million kroner. This is an increase that follows the fact that we have become more employees, and also a general wage increase. The increase in the average annual wage for Bovee has been 4.5% over the last 12 months. The extra employee allowance in the quarter is 12.1 million kroner, combined with 13.2 million kroner in the fourth quarter 2023. And then we have done the same analysis, that we have set up a bridge down there, but then what effect it has on the operating results. And you see the same, that it is the hourly rate that has the greatest effect, contributes to 6 million, the number of employees, the increase there with 6 million, and then it is the rate of invoicing that contributes to the bottom line with 11 million kroner. The opposite effect is that this one working day is smaller, which brings the operating income down by 10 million kroner. Finally, the cash flow. The cash flow from the operating income in the fourth quarter was 551.3 million kroner, compared to a cash flow of 389 million kroner in the fourth quarter in 2023. The cash flow is strongly positively affected. of short-term demands being reduced by a total of 237 million kroner. This can be explained by the fact that the last working day in the fourth quarter of 2023 was a Sunday, so all the payments were postponed to the next quarter. In the last 12 months, the cash flow from operations has been 865.1 million kroner, and when it comes to cash flow from investments, it is negative with 12.1 million kroner, of which 4.9 million kroner is repurchase of shares in Sesam, our company. That's what I was going to say about the numbers, so I'll get back to you.

Yes. I will tell you a little about what this looks like, what we are thinking about in the future. We see, and what we see, we still see strong demand after Bove's entire range of services. It should be said that it is a market where in some competitions and announcements we see increased competition. But in the long run, we see that there is good demand after the entire scope of what we have to offer. And in relation to increased competition, it is clear that this happens especially where there is exposure from individual consultants. A lot of our business, as we saw from the previous slides, is about long-term agreements, which we had last year, and which we are currently in the process of delivering. But some increased competition, that is for sure. There has been an enormous activity in relation to the out-of-work offer, and there are many large companies that have been out there to connect long-term partnerships. The entire Bové organization has been determined to win many of these offers. This is a trend that we see in the entire market. Large customers are linked to a smaller number of important collaboration partners. I think we will continue to do that. I talked about AI, artificial intelligence, generative AI. I think we just want to strengthen that, and we think we are working well with that, and are well positioned to take those opportunities. As a reflection of the market, we also believe that we will be able to maintain a low and stable turnover. That is one of the key figures we are most concerned about. Low and stable turnover means that we can build a solid business, and we see that just continue. And then we see that access to particularly experienced skills is good. So in other times it is more difficult to achieve. In the times we have now, we think it will continue to be strong in the future. So we believe that the development we saw in December will not continue. But we see it flattening out for what is in the first quarter. And now we are well into the first quarter. We are writing on the 18th of February. So that... We do not see the December development continue. Nevertheless, we believe that the development will be neutral in the future. We are working with recruitment and with a good starting point in low turnover and long-term customer relations. So that's what we had, and then it's actually just a sales slide at the end here that Steffen has put in, and that is that you can come and visit us at the presentations we have. The annual report is published on the 11th of April, General Assembly on the 7th of May, and then we have the quarterly presentations that we have in front of us in 2025. So with those words, we can thank you for the presentation, and then we can take questions and discussion.

Hi, Marius Heidal, Musta Industries. Now it was a smaller working day, and then it turned out to be two, so I wondered, in the first quarter, The 2nd and 3rd New Year's Day were planned, so are there actually two less working days in Q1?

Q1 is far ahead, to sum up for me. But what I know, no, I don't know. Have you seen it? No, we haven't seen it. But what was said, and that is very true, is that you can count working days for Q4. Let me comment on Q4. And Steffen said that there was a Q4, a Christmas, that was very employee-friendly in relation to... And then quite a lot of demarcation was taken, which probably also affects some of what we see in the Q4 numbers.

Thank you. And then I had a question about Sweden, which we haven't talked about, and there are probably good reasons for that. But I wondered about the general climate for consulting services in Sweden, which of course has been extremely bad, if you see any signs of improvement? Yes. Thank you.

It has been extremely bad. And we can see that. Sometimes I wish we had a much stronger localization in Sweden. Just in the time we have behind us, we have been pretty happy with what we have. And it has also been relatively tough. But the signals we get from the Swedish market, also externally from analyses and from our partners and competitors, they indicate that the Swedish market is improving. At the same time, they say that it is a long-term improvement, so there is no reason to think that it turns quickly. But all the signals indicate that there is a slow improvement. Are there any other questions? Thank you for the meeting, and thank you to all of us. I wish you all a good winter holiday, for those of you who are going on a winter holiday.