Multiconsult Asa Unsp/Adr

Hello and welcome to this presentation of Multikonsult Group's second quarter results and also my first quarter presentation as a new CEO in Multikonsult. I will do this together with my CFO, Ove Haukberg, and I will start with some introduction from my side. First, sharing my first impression as a new CEO. Having now spent two and a half months, I've been warmly welcomed by the staff, and I really see engaged and highly skilled people, so it's really exciting to learn about our organization and how we are well positioned within a lot of areas. I'm impressed by our Ability to collaborate both internally and also with our partners and clients and also how we are able to deliver large and complex projects to our clients in a good way. I noticed we have a very good order backlog. We have a healthy sales pipeline and we have a lot of framework agreements. So good on the market side. One of the things I was curious about when I entered this new role was how we are positioned within digital and AI. Of course, this will be crucial in the coming years, how our strategy and competencies within this area. I have to say I'm positively surprised by how the organization has built up competency. We have structured our data. We have started to apply AI both internally but also in customer projects. And we are well positioned to have discussions with our clients and partners on how to apply AI in projects in the future. Building on this strong foundation, my ambition is that we shall be the preferred consulting company for our clients, and we shall drive growth and profitability to meet our targets. Moving to the highlights for the second quarter. We had good sales across all business areas. And with energy, industry, and defense as the key drivers. We had the revenue growth of 7.8% with an organic growth of 0.7%. And an EBITDA of 108.2 million NOX, giving a margin of 7.8% compared to 4.8% last year, with the comparison being Asa Unsp Asa Unsp Asa Unsp Asa Unsp Asa Unsp Asa Unsp remains stable, and we have a healthy pipeline of opportunities. The sales in the quarter was good. We had increased sales year on year. We continue to experience a trend where frame agreements are seen as a preferred contract model for our clients. And in this quarter alone, we secured three framework agreements, new framework agreements with the Norwegian Defense Estates Agency. having now in total 26 framework agreements with the Nordic state defense agencies. And this is not reported in our backlog nor in the order intake until the call-off is made. A couple of sales worth mentioning this quarter is the Multiconsult Norway frame agreement and initial call-off with Kemring Nobel-Techne project, and also the Helsingborg Hospital. Both of these awards is a recognition of our experience and competencies and references within this area. We have also entered into frame agreements for Öland and Rygge Airbases. As communicated during previous quarters, our goal is to improve our EBITDA in line with our 10% target. We are not there yet and we are aligning the organization to the market, improving our processes and strengthening cost control. This is an area where me and my management team will focus strongly together with the organization. Some example that have effect during the second quarter is a reduction in number of employees from Multikonsult Norway with 35 employees from quarter one to quarter two. And also our other OPEX being down 6 million from second quarter last year, even given our revenue has increased 7.8%. Moving to our people and organization, we have a 3.1% growth in employees year on year, but it's worth mentioning that this is coming from our acquisitions. From spring 2028 we will co-locate to our new office campus in Skøyen where we will have Alab, Link and Multikonsult together in a cost effective and very attractive campus close to our current headquarters. We continue to win awards for our great contributions to customer projects, and this quarter we won awards for Essløv Distillery Transformation and Førde Upper Secondary School. We also arranged a competition for selecting the Asa Unsp-Adr Asa Unsp-Adr Asa Unsp-Adr Asa Unsp-Adr

Thank you, Karsten. Good morning. We will start this section with a repetition for most of you, but this is Multiconsult. And for you that haven't heard it before, a brief introduction. So we operate in three segments. That is Norway with Multiconsult Norge. We have the four V&O companies side partner, Multiconsult UK. We have architecture with a link in Norway, Sweden, and Denmark, and ALAB in Norway. And we also have international, and that is ITERIO, over Swedish engineering operation, and also Multiconsult in Poland. We have four business areas, that is building and property, mobility and transportation. We have energy and industry, and then water and environment. And at the end of 2025, our customer base was 44% private and 56% in the public sector. And we have more than 4,000 highly skilled employees that deliver more than 15,500 projects going on every year. And after the turnaround in 2019, we have consistently delivered high EBITDA year on year. And the growth has been more than 10% going back to early 2000s, from 2002. And our targets, as Carson mentioned, is to have 10% annual EBITDA. Then, please be prepared for the most busy slide today. We will go through the second quarter in some detail. EBITDA for the quarter, as Karsten has mentioned, 102.8 million with a margin of 7.1, an adjusted margin of 6.1%, including this ultra-link effect. And as you see on the table top right, there is a positive development in most figures this quarter. You see the green numbers. The bridge down right illustrates the change from Q2 2025. And we'll go through that starting from left. So the reported EBITDA last year, 67.4 million. And we had legal costs and write-ons from the Sotralink project last year, 4.7 million. And adjusted EBITDA came in at 72.2 million. The growth in net operating revenues, 7.8%, that is explained by increased capacity, so growth in permanent employees, 3.2%, and the number of FDEs has grown 2.9%. And we also have improved billing rates, that is part of the other revenue effect. The positive calendar, highly visible, 49.7 million. Two more working days compared to last year. And the negative effect in bidding ratio is 1.3 percentage points. Organic growth, also as mentioned by Carson, 0.7%, but an M&A activity, then mostly from Villanova, 3.6%, and adding up to an underlying growth of 4.3%. But caused by the improvement measures implemented, other operating expenses is slightly below the level for Q225, adjusted for settlement of legal costs from Sotralink project. And in these cost lines, we have included 5.2 million in order to achieve the long-term improvement. And this is then besides internal overs and inefficiencies in this number. employer benefit increased by 85 million, 7.6%, and that it's a cost increase on 4% per FTE that is in line with ordinary salary adjustments. And then to the right, this brings us to the EBITDA of 93.3 million for the quarter, and the margin effect on SOTRA, 14.9, gives this the solid number of 108.2. So we made it through the whole bridge. A short reminder on the Sotera Link effect that we have sent messages on during this quarter. The payment received April 30th from Sotera Link Construction has reduced trade receivables by 80.8 million, including VAT. Improved net operating revenues with 3.6 million in internal process costs. And reduced other operating expenses by 12 million due to legal expenses. And improved financial income with 26.4 million. So this quarter, a small cost of 0.7 million, but totals on the earnings before tax, 41.3 million for this quarter. And besides, there's a positive upside in these numbers. So the court ruling, March 26 this year, also orders Sultra Link Constructions to pay us 84.2 million in damages, plus statutory default interest, and another 15.7 million in legal and internal costs. And these amounts are appealed and subject to court decisions scheduled May 27. And then you have full control on the Sultra effects. So earnings per share quarter 3.23, an increase from last year that it was 1.45. Okay, first half this year. Every day, 268.8 million, a margin of 8.6, and adjusted margin on 8.1. And the bridge, again, illustrates the change from last year, and we explain most of this for Q2, but some few comments on this. Asa Unsp Asa Unsp Asa Unsp Asa Unsp Asa Unsp And also, caused by these improvement measures, other operating expenses also for the first half demonstrates improvement from first half last year of 6 million, besides the Sutra-Rinke effect. And also, one of costs to make these improvements, 9.3 million for the first half. And of course, there will be internal inefficiencies on top of that. employee benefit 4.2% per FTE, again, in line with ordinary salary adjustments, and earnings per share has increased to 7.22 compared to 6.32 last year. And for those of you that follow us closely, we also confirm that the net project write-downs landed well below 1% this first also. Then going through the numbers per quarter. And the second quarter is in dark blue. And as you know, this is highly characterized by the number of available working days. So you see illustrated top left, the growth in net operating revenue, 7.8. The revolving 12 is 5.8. Top right, the changing billing ratio, minus 1.3. And top, sorry, down right, also the change in permanent fixed employees. by 3.1%. An increase primarily related to the acquisition of IANOVA in December last year. This is partly offset by these improvement measures. So in combination, illustrated then to the left down, we have other revenue effects, changes in employee benefit and other operating expenses, and an EBITDA of 7.1. You also see the different colors, illustrated one time effect per quarter this year and last year, right down on Sotralink. And this one time settlement from a client in 2024 and also the reinforced share ownership program in 2023. Okay, then we have some comments per segment. And we start with Norway. And as I introduced, we have the earlier region, Oslo, and the region Norway here, including Multiconcert Norge, the four V&O companies, SitePartner, Lifetech, and Multiconcert UK. In this segment, we see strong growth in net operating revenues, 12.8%, caused by increased capacity from Crucial and Villanova, higher billing rates, and a positive calendar, 41.4 million. Profitability has increased, supported by the Lothar Link effects, 15 million. Improvement measures are ongoing, adjusting the capacity to the market, with a reduction in number of employees by 35 this quarter. The improvements are also affecting the organization structure, and there is strong cost control positively influencing other operating expenses. The one-off effects are estimated to be 2 million in this quarter. Also in this segment, we confirm our strong market position, especially within defense and industry, demonstrated in the order backlog and complemented by framework agreements. But you see delayed project starts putting pressure on the billing ratio. Moving to architecture, and the four companies within our architecture segment are well positioned for the emerging market trends. Corrected for the negative currency effect of 4.7 million, net operating revenues are in line with Q2 last year. Improvement measures have been implemented, causing the number of FTEs to be reduced by 28 since last year, and the effects of the improvement measures will increase in the second half this year. There are nine FTEs temporary layoffs at the end of the second quarter. The bidding ratio also demonstrates an improvement from the full-year figures last year. An improvement is 1.9 percentage points since Q1 this year. Reported EBITDA includes one-off effects over 1.6 million, and the Callum effect is positive by 7 million. Then our last segment, international. Multiconsult Polska and Interio over Swedish engineering business. We see the Swedish community development and infrastructure market entering a period of gradual recovery, although we expect growth to vary across sectors. The medium-term infrastructure outlook for the Polish market is strong, but we see short-term recovery to be constrained by award timing and public sector acceptance cycles. Primarily caused by a negative currency effect of 8.2 million, net operating revenues see a decrease on 6.3 this segment. And the EBITDA numbers are also affected by lower billing ratios caused by the market conditions and portfolio mixture. And then what you have been waiting for, the financial position. Starting to the left, the positive cash, 37 million at the beginning of the year. Then we have positive cash from operation, 253 million. Also positive IFRS effect, 108. And then we have a change in networking capital. This is due to seasonal fluctuations. But we continuously have high focus on invoicing on this. We have used 34 million in investments. A major part of that is in our new HR platform. Asa Unsp-Adr Asa Unsp-Adr Also illustrated to the right, the financial position is still strong. Net interest rate debt 788. The gearing ratio is 1.91. That is well within all financial targets. We should normally be between 1 and 2. And in situations like this, where we have M&A activity, it could be up to 3. Then the last page from me, the free cash flow. In the dark blue bar, we see cash flow from operating activities that is positive 136. And cash used for investments is 19, is in the green line. Net positive effect is 117. So then that gives us the free cash flow over the last 12 months, positive 388 as we see on top. Then, Karsten, I hand it back to you.

Thank you, Ove. Looking at the split between the markets and our business areas, we see the same trends as during the last quarters, that we have a slightly decline in building and properties, but that is more than compensated by an increase in mobility and transportation and also energy and industry. When it comes to our strategy, I have spent some time gaining insight into how we can achieve growth in our selected growth areas. And I also went more into our detailed plans on how to execute on our strategy. My reflection so far is that our target growth is Asa Unsp-Adr Asa Unsp-Adr Asa Unsp-Adr We have a unique position in the defense-related projects, and we will continue to pursue opportunities inside and outside of Norway. With the close collaboration between NATO countries, similar type of projects are now being invested in in several countries, for instance, submarines and their submarine bases. So to sum up the second quarter, we had good sales across business areas, including new more frame agreements, which is not showing in the order intake or backlog. We are on course and following plans and implementing measures for driving our profitability to a higher level. The market outlook. The market overall looks and remains stable with defense, infrastructure, energy, and industry continue to support demand. We have a healthy pipeline, a strong market position, and many framework agreements, especially within defense. So here is our financial calendar, next delivering our Q3 results on 3rd of November. And then we open up for questions.

Thank you, and my name is Simon Mortensen from D&B Carnegie. Thank you for a good presentation. I have a few questions. You're new to this company, but over the last year you have been communicating that the price growth hasn't been at par with cost pressure, and in this quarter there's a lot of variations. We look at the calendar adjusted revenues being up 0.7% year on year. Well, at the same time, we have employment costs going up 4%, clearly showing that this is continuing to pressure margins. This seems to be accelerating or decelerating the revenue growth. It was higher in the beginning of the year and is now even lower. How long do you see this trend going on? What steps and measurements do you think you can do in the near term and a bit in the longer term to compensate for that kind of margin pressure situation which has occurred? And also in that light, how do you look at the order backlog being down 13.5% year on year?

So we see the same situation. As you saw also in the presentation, we have a price increase that is higher than 0.7. So we are getting closer to a more healthy situation when it comes to the Sorry, the differences between increase in the cost of FTEs and over margins. But you are right. So that's why we put pressure on costs that you see a decline in. So in relative terms, you have more than 8% more effective on operating costs than we were at the same period last year. And also we need to see what we do on the billing ratios and also demonstrated that we have reduced the number of employees both in the segment Norway and especially in architecture. So we need to continue to work on those issues also going forward. But we are aware of the situation that are facing us. And it's always the struggle to have the best possible margins. But we also are well positioned. We are accompanied with the best employees, the best Asa Unsp-Adr Asa Unsp-Adr Well, we see the order backlog to be healthy. You saw the sales increased this quarter. And also, that was also commented in the last quarter, since the framework agreements are now relatively higher than the previous years. Asa Unsp-Adr Asa Unsp-Adr

You also mentioned that you're moving to a new headquarter and stated also this will save some costs. Can you quantify the level and expected impact of that?

No, we will move in in 28 and what we do then is actually that we move out to the other premises that you have in Oslo and centralize that and need to come back with the numbers on that scene. Thank you.

Yes, good morning. Ben Thunossen from ABG.

I just wanted to touch upon the framework agreements because we have seen that going up in the last couple of years. And as you said, it's a preferred way of entering new contracts. The question that I don't have the answer is, is this positive for you or is it negative? Basically, your clients are just securing capacity and you are sitting on the sidelines waiting for these call-offs to happen. And when they don't happen, you end up with a lower billing ratio that you probably planned for.

True. But this is also an opportunity moving into We can really regret that, but defense is a high growth area at the moment. And for us to have the ability to win these framework agreements due to our capabilities and also the knowledge that we have in this sector, we need to see this as a positive thing. And also that we are able to win part of that with quite good margins. So in general, I would say positive. But of course, you can't report it as part of your sales. And that makes questions come like the one we heard from Siemen.

What about the timing of call off? Do you have any visibility here at all? Or is this just wait and see?

It's a combination on that, that we have some visibility on some contracts and others is decided on levels above basically our customers. It's a political situation in that.

I think it's also worth to add that some of the challenges we are having is sometimes that you know the contracts doesn't start it's a delayed start but when you see when we have started there are much more firmer plans on the progress and the plans for so So some challenges has mainly now been with some delayed startup of some of these agreements. But the plans are there and the volume is there. So that's why we are quite confident that this in addition to order backlog makes the situation quite okay.

I just want to dig further into that on delayed, if I may. Is that due to money, political reasons, or lack of capacity on the customer side? That they don't have capacity to push the project through, but they have just secured the capacity?

My understanding is that the two latter. They have the money, but indecision and capacity.

Questions from the webcast.

Magnus Rasmussen, SAB. Over the past couple of quarters before second quarter, it seems like the billing ratio and profitability in segment Norway has stabilized. Why was there a significant decline in second quarter? And should we expect it to continue also in the second half of 2026?

Well, our comment on that, both from Karsten and myself, is that we are adjusting capacity to the volume, basically, to the projects. So that means that we are adjusting up or moving people in line with the projects that we have in that. So I think that will be my answer on that.

What can you say about profitability in Via Nova since the acquisition was closed in December?

Yeah, I would say that is in line with our expectation. It's always a challenge when you buy a smaller company and implement that in a listed group with much tougher requirements on reporting and precision. But besides that, I would say they deliver in line with our expectations.

Can you elaborate on the scale of new defense and healthcare framework agreements and the timing and expected contribution to backlog revenue going forward? And secondly, what billing ratio level do you target and what actions beyond the ongoing profitability program are planned to lift utilization back to a prior year's level?

The two hospitals that came in Sweden, one was 80 million and the other was 130 million that we sent out in June, I think. We reported that. And we have three new framework agreements with the defense this quarter. adding up to more than 4 billion in framework agreements for the total group. We don't set specific targets that we communicate on billing ratios, but we communicated a very solid goal on 10% EBITDA. So that is a combination of all the measures that we do.

And finally, Martin has one more question regarding the billing ratio. Is there any other effects like timing issues affecting the billing ratio, this billing ratio this quarter? For example, some project early startups or new, or is it a mix of effect for recent acquisition bringing the low utilized staff?

Well, we are waiting for a call-off on some framework agreements. There are start-ups on large projects, mobility and transportation, that will increase our billing ratios going forward, and architecture as a combination. So it's many reasons this quarter for this number.

Okay, we'll finalize here from this side, I think.

Okay, then thank you for coming and have a nice day.