Multiconsult Asa Unsp/Adr

Good morning and welcome to the presentation of the results of the first quarter 2026 for Multikonsult. My name is Grete Bergli. I am the CEO and with me today is also our CFO, Ove Hautberg. Before I dive into the figures, just a brief reminder of who Multikonsult is. We are an engineering and architect firm with a history going back more than 100 years. We report in three segments, Multikonsult Norway that contains our engineering business, Architecture that contains our four architect subsidiaries, Link in Norway, Sweden, and Denmark, and Alab in Norway. The segment International contains Multikonsul Polska and our Swedish engineering subsidiary ITERIO. In the market we operate in four business areas and all the subsidiaries and segments work across these four business areas. Historically, the split between private and public clients have been 50-50. And over the last few years, we have delivered a profitable growth based on a robust business model and a diversified, strong professional environment. Looking at the figures for the quarter, we had a good start of the year with a 5.5% growth of which 4.4% was organic and excluding calendar days, the revenue growth in the period was 8.4%. The billing rates increased compared to 2025. The EBITDA of 160.5 million represents a margin of 10% and adjusted for calendar effect, the EBITDA percentage is 12.4. We still have a challenge with cost increasing more than revenue, but it is a positive development as far as the gap over the last quarter has been reduced. The sales in the quarter was good, And our ambition and commitment to strengthen profit remains firm, and we work along the axis of the organization, effective business support, and cost control. Ove will go in more detail when it comes to the figures later on. The sales and order intake, the sales in the quarter has been good with increased sales year over year and largely unchanged market condition reflecting a stable underlying activity level. The trend on increased defense-related opportunities continues. And over a period now, we have seen that frame agreements is increasing as a preferred contract model. And the level of frame agreements is record high for us as a company. Please note that the volume of frame agreements is not included in the reported figures as framework agreements are not included in the reported order intake or backlog until a call-offs are made. The sales on our largest frame agreements have increased more than 200% since 2022. And it doubled from 2024 to 2025. And we expect the level of 2025 to continue into 2026. In relative terms, this represents at least a 1 billion NOC to be added to the reported order backlog. The portfolio on large projects remains stable and maintains good activity through 2026. We have a 4.5% growth in number of employees. As a company, we have strong beliefs in employer share ownership as a motivating factor. And in this quarter, we have issued 6,600 shares to new employees. And a further strengthening of employee ownership program was approved by the general meeting with the introduction of a profit sharing model. On organization, it's worth mentioning the certification of ISO 27001, which is information security and in line with what we see as a very high focus area and requirements from our clients. And it is always great to see how projects we participate in win awards, and also the significance that our projects have in our society. Here, represented by the unveiled foundation stone ceremony by our Prime Minister, Jonas Gahr Støre. And with that, Tove, I hand it over to you.

Thank you, Grete. And good morning. Then we have a closer look at the numbers for Q1 2026. The EBITDA for the quarter ends at 160.5 million. That is a margin of 10%. And the EBITDA adjusted is 160.9 million. And that is including the effects of Sotra Link. The bridge down right illustrates the change from Q1 2025 and started to the left on that bridge we saw that the reported EBITDA was 190.4 million and then we had legal costs and write-downs on Sotralink on 9 million and the EBITDA adjusted last year was 199.4. And going then further to the right on this, the net operating revenues increased by 5.5%, and that is explained by the increased capacity. Growth in permanent employees on 4.5%, or to 4,220 T. And the corresponding growth in FTEs is even stronger, 5.6%. We also had improved billing rates, that is part of other revenue effects, and also a negative calendar effect, 43.1 million, that is due to two fewer calendar days compared to last year. And we also had a small negative effect on billing ratio, 0.3 percentage points, but as Grete mentioned, reducing the gap compared to the gap in the previous two quarters. The organic growth, 4.4%, and M&A activity on top of that, a growth of 4%, and that is adding up to the underlying growth of 8.4%. The operating expenses we can see has an increase, 7 million or 4.5%, and also the employee benefits increased by 106 million, a 9.6 cost increase, but the increase is 4% of FTEs, which means that the underlying cost increase is in line with ordinary salary adjustments. This brings us back to the EBITDA on 160.5 in the quarter. We have got quite a lot of questions on the Sotra Link project. All information is provided in our stock exchange announcements given in the market the last few weeks. We also confirmed that the net project write-downs landed well below 1% of net operating revenue also for this quarter in line with last year. Then showing the results per quarter. Q and columns is in the dark blue color. And the results in the quarters is characterized by the numbers of available working days. Growth in net operating revenue from Q1 last year to Q1 this year, 5.5%. We see that top left. And also the rolling toll amounts is positive by 3.6%. The changing billing ratio from Q1 last year to Q1 this year, minus 0.3 percentage point, that's shown top right, and as commented, the gap compared to the gap last quarter has been reduced. Then the growth in permanent fixed employees, 4.5%, as shown in the graph down right. And in combination with other revenue effects, change in employee benefit and other operating expenses, that gives us the EBITDA margin of 10%. In this graph done right, we also have illustrated the one-time effect per quarter in 2025 of write-downs and lead costs on Sotralink. We also see the one-time settlement from a client in Q3 2024 and the reinforced share ownership program in Q4 2023. Then, for the first time, we have provided the information per segment in this presentation, and starting with segment Norway. And this contains the previous segments region also and region Norway, including Multiconsult Norge, the four V&O companies, SitePartner, Lifetech, and Multiconsult UK. And in this segment, we see improved performance compared to the same quarter last year. Net operating revenue has increased by 9.1%, the bidding rates are improved, and the capacity, the number of FDEs has increased caused by the inclusion of E-anova and organic growth. The positive effects are somewhat offset by the negative calendar effect that is 38.7 million in this segment. And also the Q1 numbers last year included the legal cost of the Sotra Link project, 9 million as commented on the first slide. Then moving on to architecture, the three Link companies and A-Lab, and the performance in this segment is mixed. Although we see signs of improvement in the Scandinavian architecture market, there has been a challenging start of the year in many of our geographies in this segment, whereas other parts are performing better. In Q1, we have been in the process of adapting the organization to the market, causing a reduction in number of FTEs compared to Q4-25, and there are 12.5 FTEs as temporary layoffs at the end of Q1. Primarily driven by a lower billing ratio, the EBITDA ended at 9 million, a reduction of 5.4 percentage points compared to last year. And the calendar effect in this segment is negative by 3.8 million. Then, international. Also, as Grete mentioned, this represents multi-consult Polska and Eteri over Swedish engineering business. Net operating revenue is in line with Q1 last year. There are signs of improvement in the Swedish engineering market, whereas the Polish market still sees competitive pressure affecting pricing. Increased employee benefit cost and other cost weakens the EBITDA margin by 1.7 percentage points compared to last year. And the current effect in this segment slightly negative of 0.5 million. And then, as always, the slide you are waiting for, the financial position. Starting to the left, we had a positive cash at 37 million at the start of the year. And then we have a cash flow from operation positive by 136 million. Then we also see the IFRS 16 effect. The change in working capital negative by 11 million, but that is due to improved invoicing activity and consecutive payments from customers. Bear in mind that the numbers last year was minus 224. Also on investment activities, negative on 15 million, that is investment in software and computer equipment. And also then cash flow from financing, negative by 15 million, and that is interest on loan. And then also including the IFRS 16 effects, we have a positive cash at the end of the quarter by 126 million. Also to the right, our net interest-bearing debt, 697 million, a gearing ratio of 1.87, still well within our financial targets. Then the last page from me, this is the free cash flow slide. And the definition of free cash flow here is cash flow from operating activities minus cash flow used in investments but excluding acquisitions. And in the dark blue bar, we can see cash flow from operating activities positive by 180 million. And cash used in investment activity is minus 16, shown in the green line, giving us a net positive cash flow of 164. And the last 12 months, free cash flow on 371, and that is the light blue line. And the change from Q1 last year is mainly related to the change in working capital. And then Greta, I'm handing back to you.

Thank you, Ove. Looking at the market structure, the gross revenue in the four business areas follows the same trend as we've seen in the last quarters, and development in line with the market situation. High activity in energy and industry, stable in the other three business areas, and the distribution between the business area remains fairly stable. In recent presentations, we have often highlighted examples of projects that we have won that support our strategic ambition. This time, I want to dive a bit more detailed into the strategic ambition of urban transformation. Urban transformation is complex and represents an area where our multidisciplinary excellence really proves its value. With Multikonsult Norway, Link and Alav working together, we develop new services. One great example of how synergies between engineering and architecture disciplines create new services and market opportunities is the work ALAB and Multiconsult is doing to develop a solution for Banen Nord to assist them in designing rail services on users' terms. Bjørvika in Oslo is a good example on how shared digital models can play a major role in area development. For more than 20 years, Oslo City Council and Via Nova have used a common 3D model to bring together map, data, planning information, property details, technical infrastructure and building models in one platform. enabling new developments to be assessed against what is already in place, enabling up-to-date view of reality, which again reduces errors, improves efficiency and support better decision making. The solution is now being applied on other urban projects and including Lilleakerbyen in Oslo. So the first quarter in brief, good start of the year. We remain focused on profitability measurements. There's a good sales in a highly competitive market. We maintain a solid market position and order backlog. And the leading position in defense-related engineering and architectural services was strengthened. Then, if we go to the outlook, the overall market remains unchanged with several new opportunities in the pipeline. There is continued uncertainty regarding the timing and investment decisions. Defense, energy, industry, and infrastructure remain the key drivers. and building and property market is expected to remain challenging. But leaving the first quarter, we maintain a strong market position, a solid order backlog, entering the remainder of 2026. As this is my last quarterly presentation as CEO of Multiconsult, I want to take the opportunity to express my gratitude for the trust given to me and a big thank you to all the people who have supported me on the way. Few leaders are given the opportunity to be part of the improvement journey that we have had since 2019 and that I have had the privilege to lead. It's been a team effort and the strength and the courage of the executive team has played a major role in the same way as the support from our previous chair, Bård Mikkelsen, and our current chair, Rikard Appelgren, and the rest of the board. And I have enjoyed the perspective and dialogue with investors which have contributed to the development of Multiconsult. But we must never forget that Multiconsult is above all built by people. People driven by professional curiosity, strong sense of responsibility, and the will to succeed together. On this foundation, the group is well prepared for the next phase, and I'm confident that Karsten Warlow has the qualities needed to lead the organization and deliver the group's targets and ambitions. So from me, a big thank you. Good luck to Karsten and some of you then. We will see you again in August. That completes the presentation and we open up for questions.

We have Magnus Rasmussen, SEB. You show a slight increase in the EBITDA year-over-year adjusted for calendar this quarter for the first time in a while. Can we expect improvements to accelerate in the coming quarters towards your margin target in 2027?

What we have communicated is that our target is to remain stable in 2026 and also then make the adjustments that we need to make sure that we are fit when we leave 2026 to continue into 2027 with the profitability targets that we have set.

I don't know if you want to... No, but as you mentioned during the presentation, we are working on adapting the organization to the market to have a more efficient support organization and also look at cost in general. And we have already communicated some changes on that. I think the last communication was today on changing the setup in Multiconsult Norway. So this is continuing in line with the plan.

Thank you. She has three questions. Can you give some more color on the progress for reaching 10% EBITDA margin target? And what are the specific levels to get there? Question two, competition and pressure on margins. How have you seen that involve over the last year? Number three, can you give any quantification of the total unbooked volume sitting inside framework agreements that is not reported in the backlog?

I'll start with the last one, and the answer is no. But I did indicate, given if you go back with the volume we have, you could add a billion. So that's in that area, actually. When it comes to, what was the first question? That was over, you remember.

There's some more color on the progress for reaching 10% margin.

Yes, yes. Yes, we are working on that in all of our business. We mentioned architecture with adoption of this down there. We have 10 less FTEs during this quarter, and it's continuing. And the same goes for the rest of the organization. And as I said, it's already communicated some changes in that. So we are working in line with what we have said on that now for the last three quarters.

Good. And the last one was competition and pressure on margin. And how have you seen that over the last year?

I think we communicated in all the quarterly reports now that there are pockets of the markets where competition is high. And I think that's one of the areas we've seen is within building and property. The advantage we have is that we do not necessarily have to compete in the most margin pressured areas. We are also seeing that there are maybe less competition in smaller projects, so that we are now trying to address different market segments to avoid the head-on competition.

Yeah, thank you. Jeppe Bordset, Arctic. Billing rates, tax, salary adjustment, discourse. To what extent is it sustainable in the current competition environment and how should we think about the pricing power going forward?

Do you want to do that one? At least in Norway, we are seeing that salaries have increased higher maybe than the situation on competition should really allow for. And we need to see how we adjust our employer... the mix of the employees that we have. But we are also a part of the society that we live in and that's why this has been challenging for a while and when then you get cost increase higher than that. So I think we are just really following the development and we are looking at how we can adjust our organization in line with the projects that are available.

And this quarter we have framework agreements that has regulations starting of the year. And as we have communicated before, the normal adjustments are first of July in line with the salary increase the last year. So those mechanisms are still in place, but the pricing always depends on the market.

Thank you. Jeppe Bortseth again came with another question here now. The billing ratio has declined year over year for five consecutive quarters. What are the key drivers behind this trend and how are you addressing it?

I might say see it a bit different. So the billing ratio two quarters ago had a difference compared to the last year of 1.1. Q4 0.8 and this quarter 0.3. So basically we are getting closer and closer to the previous year and that is also showing that the improvement measures continuing are giving us some level on this. That is also the plan going forward.

Let's complete the questions.

Any questions in the room? No? Then we say thank you all for coming here, for those who are sitting in the room with us, and thank you to all of you who are listening in. Have a nice day.

Thank you.