Bouvet ASA

Yes, then I have the pleasure of welcoming you to the introduction of the first quarter of 2025. Welcome to all of you who come here. Welcome to those of you who are on stream. We follow the old tradition here, so I will tell you a little about the highlights of the quarter, and then Steffen will tell you a little more about the numbers. And then we run the presentation, and then we take questions until the end. And then we have a small microphone, so everyone gets questions and answers afterwards. Since it is a new year, 2025, you have probably noticed that we have made some adjustments and changes in the presentation. So that's what we're going to share with you now. The highlights for this quarter, and this is something we also wrote about in the report, are solid results, a good quarter for BOE, in a somewhat tougher market. And I will come back to where we see that. And then there is a quarter where we also win things. We have won the framework agreement with the State Railways. Among other things, the first quarter is also the quarter where we run our internal competence sharing arrangement, which we call Bové One. We call it the spring's most beautiful adventure, and we did that in March. All regions gathered all the people in Bove, and then we shared a lot of competence and had a good social life as well. So that was a little about those highlights. As for the results, we increase our operating revenues by 5.8%, so we end up with around 1 billion and 75 million kroner. And then the operating revenues end up at 155.2 million kroner. This gives us an EBIT margin of 14.4%. And we have to remember that compared to last year, it is an increase from 13.3. So, summarized, result-wise, Very good. The number of employees, we end the quarter with 2,347 employees in BOV. And that's an increase of 1.3%. I'll tell you a little more about that later. So these results are the results we are happy with, proud of. So to all BOV'ers who are here, thank you very much for good work and effort. And to all BOV'ers who are on the stream, Thank you very much. Great effort. Very good. Now I'm going to tell you a little bit about what we do and a little bit more about the operations. First about the number of employees. As I said, we end the quarter with 2,347 employees in BOV. That is down 13 people from the fourth quarter of 2024. That is up 31 employees in the last 12 months. And then there is up 1.5% from the first quarter of 2024, the same period as last year. There is a clear background for this development. First of all, and this is important, we have a very low turnover and a stable turnover. We have had this for many months. over many quarters. And then there is reduced recruitment activity in some areas. And that recruitment activity has its origin in the way we evaluate the market opportunities here and now, the recruitment activity is adapted to those opportunities. And as we wrote about in the report, this is, as we see, good results, but in a somewhat tougher market. And this is what we refer to as a somewhat tougher market. So some reduced demand in certain sectors, and some increased competition. Now I will say a little later about where we see that we see reduced demand. Moving on to our sectors. Oil, gas and renewable energy, starting with the largest, is relatively stable. Development at a little over 3.5%. What drives this positive development is activity with Equinor, activity with Aker BP and Able. we have two sectors that in absolute values increase the most, and that is energy supply and the public sector. In energy supply, this has been a sector that we have developed well in and had high activity over many quarters, and it has grown all the time. This is due to the activity, especially on Statnet, and companies like Skagerakke and Energi. We also see a very positive development in the public sector. This is an interesting dimension, because it is also the sector that we see in some parts of the public sector that we see reduced demand. But the increase here comes from significantly increased activity within the defence sector. So defence is a part of the cake diagram here of public and defence. So there it is especially defence that in all essence draws the positive development. And then I have, for earlier reasons here, talked about some new customers we got last year, and new assignments we got, which was UD and NAV, and they also contribute something to the increase we see in public. But, as I said, in parts of the public sector, we also see the issuance of some processes, some reduced demand, and that is some of the background that we commented on in the report. The service levels are increasing relatively a lot, and that is nice. This is from customers that I have brought up earlier, such as Innovation Norway and Røde Kors, and Viking Rescue Service, which is developing that. That was the sectors. Then I will say a little more about our customer mix. And you who have followed us, you have seen that in many quarters we have had a development where we have increased the turnover of the most important customers. And we also see that this quarter. So now we see, so I comment on it for you to the left. So now it's all 68% that comes from our ten largest customers, and that's up. from the same period last year, from 66%. We see this as a very positive development. This makes, and I have previously talked about this in these presentations, that we see a fundamental trend in the market, that the company connects to strategic partnerships, long-term partnerships, and for us, we are part of this. This means that we work closer with the customer, we learn more about the customer, closer cooperation, we get more trust, and we take more responsibility. And our customers have ambitious digitalization ambitions. And then we get this development. This is a development we have prioritized and embraced for many years. And has been the reason for much of the development we have in Bove. Then we have the split between public and private. And in the last few quarters, we have been very happy that we have also had a strong increase in the public sector. Around pandemic times, we had a strong increase in the private sector, and in the later quarters, we have had an increase in the public sector. In the report, we write about two fundamental trends that drive a lot of the development and that are underlying to the development in Bove. One is the development around electrification and power supply in our societies, and the other is defense and security. And the development we see here is specifically linked to exactly those trends. So then we talk about electrification, the type of customers like Statnet, and we talk about the development of new services within the defence sector, so the type of NATO and defence. So that is what drives that development. And then we have a lot to do with what we work with, and then it becomes less of a burden for new customers. So our main activity is on customers we had in the same period last year, and then there are single new customers. And just this quarter we see revenue from a customer we are very happy to work with, and which we will probably talk more about another time, and that is Lerøy Seafood in Bergen. We will tell you more about that later. I would like to highlight some of the things we work with. The customers we work with and the suppliers we work with. I would like to talk about a customer, Statnet, that we have been so lucky to work with for many years. Most people should at least know about the mission of Statnet, which is to ensure the power supply to the Norwegian society by building, operating and maintaining the power grid. in Norway. And then they are going to apply this to the electrification of society and the value creation for the customers of Statenet and for society as a whole. And then it is so that in the world we enter, the power system becomes increasingly more complex. There will be larger and faster variations, and the intake of renewable energy and more flexibility in consumption will make it more difficult to balance. So the answer to that is automatic balancing. That is, away from the manual control rooms and manual processes to balance the network, and into more digitalization. And I am very happy that no one in this room, nor in society as a whole, marked Tuesday, March 4. Tuesday to March 4th was a big day in the Norwegian and Nordic power networks. We went from manual balancing to automatic balancing. There are many in Bovee who are happy that it went well, and there are many in Statnet, and in society as a whole, who are very happy that we still had light in Perra, and we did. These are solutions Bovee has been so lucky to get to work together with Statnet, as I said, for many years, forward towards this date. And then it's not just balancing in Norway, but this is also connected to the other Nordic power networks, and that is part of European cooperation around energy exchange. So there will be new Olympic dates after this as well. But it was a big day. And this is the future of the power grid. This is about advanced algorithms, more digitalization. It's about artificial intelligence and new control solutions. which will increasingly play a major role in our power supply network. So we are very happy that we have been able to work with Statnet on this, and we hope that in many years to come we will also be able to take the next steps. That was Statnet. Last quarter, I had the pleasure of telling you about what we are working on for NATO, which was the command and control system for air capacities in NATO in Northern Europe. And it was a lot about drone activity, surveillance, and the use of that kind of technology. This time, I am happy to be able to tell you about NORCIS. NORCIS is Command and Control for the Norwegian Defence Forces. This is a command and control system that is used by the Norwegian Defence Forces for cooperation in military operations. This command and control system gives support and control to those plan and carry out military operations. And we know that, and we have read and heard a little about it from Ukraine, that this is increasingly about close coordination between air, sea and land forces, and here NORCIS plays a central role in Norwegian defence. In Nordskis, we have worked together with the Defence Force to develop this. It is about many things, but in order. Four things. It is about understanding the situation. You have seen the Second World War and the maps and so on. It is about understanding the operating room, understanding the positions of your own forces and enemy forces, and understanding the room to act in. Then it's about planning and implementation from tactical to strategic, and execution of those plans, and coordination of resources. Then it's about communication between units. Then it's about reporting and analysis. Understand what happened, understand how you can learn from this, and take that with us in new operations. In the situation that Europe is in, these are central functions in an effective defence. It is a lot about how we can coordinate the various branches of defence. It is also a lot about how we communicate with other NATO partners. And then something big has happened in Norway, in defence planning. It is that we have become a receiving country of allied forces. Now we are a receiving country and a transit country. This means that these types of solutions play an increasingly important role in working together. So we have been so lucky to have the Norwegian Defence Force to develop this since back in 2011. And the pictures that we can tell about here also tells us that we have a big agenda ahead of us. So it's incredibly exciting. Then we have a completely different domain and a completely different technology. But this is the court administration. And the court administration is an administrative body that will take care of and support the Norwegian court system and ensure that it meets the expectations of The court administration works in Trondheim, with about 160 employees, and they deliver services to the entire country. In all courts in Norway, there are around 2,000 people working. Here, together with the court administration, we have worked on something that is quite exciting and that is absolutely in time. What we have done is to work with the exploration of artificial intelligence, generative artificial intelligence, for how this can be used as a work tool in a safe way. Many probably think that this is a technology project. It is not. It is written in the text here as well. But this is very much about artificial intelligence and how it affects work processes and how it can be used in a safe and secure way. And then you have to work with a lot of guidelines, competence development, organization development, and not least, we can think of the considerations that must be taken into account around personal health challenges in exactly this domain. So here we have worked with that. We have been able to contribute with process management, design competence, technological competence, project management in this research project. And then we have learned a lot together with the Board of Directors in relation to which applications are functional and safe and good, and also a little about what we should not use it for. This case shows a lot of what we work with other customers on, namely to explore and find the good and safe uses. This is not technology. This is about organization, personal safety, safety and competence. The fourth customer I would like to talk about is the Directorate for Higher Education and Competence. The Board of Directors is a governing body that governs higher vocational education and competence policy. In the spring, there are a lot of 10th graders and people who are looking for higher education, who are in an exciting time, and that is, what am I going to use the rest of my life for? Which way of education should I choose? There is a lot of information here, but this is one of the social tasks for this directorate. They work with to provide tools and guidance on how to help people to seek higher education. There is a lot of information at utdanning.no. What we have had the opportunity to work with this directorate with, is the use of generative AI again, to build something like, in this picture, karriereveilederen.no, I encourage everyone to go in and try. It's never too late. And here we use generative artificial intelligence to create good advice for people who are looking for higher education. And then I have been in and tried it myself and used the solution. And then you put in what you are interested in, which subject you would like to work with, what you are interested in in your spare time, what you are interested in in general. And then that information is connected to what is called OpenAI GPT model, which is used against the data sources that the directorate has. So that's a nice solution. What is also a bit exciting about this is that this tells us that generative artificial intelligence allows us to develop solutions in a completely different way. If we had done this with traditional technology, a fairly large program code would have been developed, and we avoid that in this case. So exciting and a good solution. Then I would like to talk about what kind of agenda there is at Bove. We have a vision that many know, and it is close to our hearts. We are building the society of the future together with our customers. And then I have talked about some customers here, and then you know a good number of other customers that we have talked about earlier. And then you know that we work with very socially critical services for these customers. And it is extremely important for these customers And we can just take, for example, the first two I mentioned, which are about power supply and power supply throughout Norway. We are talking about defence and command and control. This, everything above the sky is important to us, these customers, that is quality and safety in everything we do. And the geopolitical situation has also reminded us that safety is not something we can take for granted, we have to build it. So for that reason, quality and safety in Bovee is at the highest level. And as a company, we have carried out annual revisions and we have worked on certifications in four very critical areas for the deliveries we are in. And then I will just talk very briefly about that. ISO 9001 is about our delivery processes. And in the end it is about what we deliver to our customers is built on good quality. So there is our entire business certified on ISO 9001. Then there is something called ISO 45001. Those of you who know our ambition are talking about how the most important thing in Bovee is the employees in Bovee. It is those who create value for the customer. 45,001 is about the working environment. It is about the employer we are going to be and how people are going to get a good development and that Bovee is going to be a good employer. This is important. ISO 14001 is about the environment and our conscious work around it. And finally, very important and central to our customers, ISO 27001 is about information security. Information security is something that is on the top of our customers' list. And when we are out working as consultants with them, it is how we act, how we handle information, and how we handle information in our own systems that is extremely important. So this is important for us. This sets an important agenda in Bove. And we work with this every single day. And that means that we will continue to develop a quality company like Bove. So that was what I was going to say about what we have worked with this quarter. And then I think I will give the floor to Steffen, who will say a little more about our numbers.

Good morning everyone. Let's take a closer look at the figures for the first quarter of 2025. And as you will see on the boards, we have also made some adjustments to the financial boards. So let's start here. In the first quarter, we had operating revenues of 1 billion and 75 million kroner. An increase of 59 million, or 5.8 percent compared to the same period last year. There was no purchase during the period, so the growth is organic. We can focus on the bridge down there. The main reason for the growth is the increased hourly rate, which has gone up by 4%. That explains 37 million of the growth, as you can see in the bridge analysis. In addition, we have had a positive contribution from increased capacity, as a result of more employees, overtime and fewer holidays. A total of 5 million. The Easter fell in the first quarter of 2024. But this year it will be the second quarter. It gives us one extra working day in the quarter, with a positive effect of 15 million. On the negative side, we see that the rate of invoicing has fallen by 1.6 percentage points, which corresponds to a negative effect of 20 million. The staff costs have increased by 31 million in the quarter, as a result of more employees and a general wage increase. All in all, this gives an EBIT of 155 million, an increase of 20 million, or 15% from the same period last year. This is definitely a strong increase, but remember that this is a quarter without Easter. The EBIT margin ended at 14.4%, up 1.1%. The result after the tax was 121 million, which gives a result per share of 1.16 kroner. Here we see the development over time for both the turnover and the EBIT. As mentioned, the turnover increased by 5.8% to 1 billion and 75 million. If we break this down, we see that the main part of the turnover comes from own employees, with a growth of 6.7% to 973 million. The turnover from own consultants is now over 90% of the total. The course business and other turnover continues to grow, up 13% to 15 million in the quarter. The turnover from sub-consultants is, on the other hand, down 4.6% to 87 million. The share from our sub-consultants continues to fall and now accounts for 8% of the quarterly turnover. This is completely in line with our strategy to develop the business with permanent employees. If we look at the lower graph, we see that the EBITDA for Q1 ended at 155 million, with a margin of 14.4. In comparison with the same period last year, there is an increase of 20 million. Underlying growth in operating costs was 4.4%, mainly due to more employees, and a wage growth of 4.5% in the last 12 months. The extra employment allowance is now gone, but it would have had a very small effect in the first quarter of 2024. Let's move on and look at the cash flow. We have made some changes here as well. The cash flow from sales, as you can see up to the left, was in the first quarter at minus 35 million kroner, against plus 64 in the same period last year. For the last two months, the cash flow is 716 million, while the result of this tax is 399 million. The bridge analysis on the right shows some more details. Here we see that we started the year with a bank cut of 834 million. The underlying turnover gave a positive effect of 128 million, and the IFRS 16 effect is at 17 million. On the other hand, increased working capital has amounted to 179 million kroner. This is mainly due to increased customer performance. We do not see this as a risk, as it is due to seasonal variations and the fact that our customers are large and solid. The cash flow from investments is 4 million kroner, where investments in goods and services are minus 3 million kroner. and 8 million is interest income. Contantstrøm from financial activities is minus 63 million, mainly linked to purchase of own shares, and IFRS 16 effects at minus 19 million. So we get at the beginning of the quarter a content retention of 741 million. Finally, let's take a look at the balance sheet. It shows that we have a strong financial situation. We have no long-term interest rates, except for IFRS 16 effects. The equity share is 27.1 percent up from last year, but slightly lower than the same period last year. And our lower liquidity level is at 1.27, on the same level as last year. So, Mene P. Gunnar, I'll put the floor back to you.

Yes, thank you. I will just say a few words about how we see the future. I think it is important to emphasize that from our point of view we see, as I have described the sectors we are engaged in, we see strong demand in the sectors that are the largest and most important for us. And there we have many long-term contracts, so we see very positive on. Then we see that, as I have commented on, that in individual sectors and markets, we see that there is increased competition and some reduced demand. And we also see that reflected in some of the figures that Steffen put forward in the effect it has on the rate of invoicing. The trend that customers want to connect to their partners, it occurs to us every single day, because we work a lot with offers and solutions that are just about this. It's about getting a place at the table with important customers. That development, we just see it continue, and we are happy about it. That means that we as an actor, we have a We have a good position in that. We have a wide range and a great ability for implementation. And we experience that Bovee is a type of company that many want to connect to. So that is a development we are very happy about. Then I have described two cases and two customers who work with research and introduction of AI. We see that this is in an increasing pace. It continues, and we have started with many customers, as I have described with those two. But it is a technology that we see as contributing to increased demand, and it is also a technology that contributes to a much greater output of services from the residents than just technology. It's a lot about organization and security and so on, as I have described. So we see that. And then we are of course very happy that we are a business where we have low turnover. Low and stable turnover, that's good. That's good for us. And that is perhaps also, I like to believe that it has something to do with how we operate. And then it probably also has something to do with the market that we have around us. So that was what we were going to say about both the quarter and what we see in the future. With that, we can ask questions. If anyone has any questions, we can answer them. If this was clear as day, I would like to thank the team and welcome you to the second quarter in a few months.