“Multiconsult delivered a strong third quarter EBIT. I am very satisfied with the strong improvements and continued profitability this year. We are ahead of the plan for this turnaround thanks to solid dedication and efforts across our organisation and strong customer relations. Focus on core business, sales and project execution, and significantly reduced operating expenses partially resulting from the nextLEVEL improvement programme have been key factors for our recent improvements. I am very grateful to our employees for joining in on this important and necessary improvement journey” says Grethe Bergly, CEO of Multiconsult ASA.
Third quarter 2020
Net operating revenues increased by 3.9% to NOK 748.5 million (NOK 720.4 million). The increase in net operating revenues is exclusively organic and driven by higher billing ratio and improved project execution compared to the same quarter in 2019.
Operating expenses consist mainly of employee benefit expenses and other operating expenses. Operating expenses decreased by 7.4% to NOK 600.4 million (NOK 648.3 million). Other operating expenses decreased by 24.7% to NOK 79.4 million (NOK 105.5 million), partly an effect from the nextLEVEL improvement programme, together with the impact of reduced costs on general expenditures such as travel and certain other expenses due to Covid-19.
EBITDA was NOK 148.1 million (NOK 72.1 million), an increase of 105.5% compared to the same period last year. The EBITDA margin for the quarter was 19.8% (10.0%). EBIT reported was NOK 68.1 million and includes a one-off restructuring cost of NOK 30.0 million.
EBIT ex. restructuring cost was NOK 98.1 million (NOK 21.0 million), reflecting an EBIT margin of 13.1% (2.9%). The restructuring of NOK 30 million is a right-of-use assets impairment loss. The impairment relates to a review of Multiconsult’s office rental portfolio and is part of the previously announced restructuring costs in the nextLEVEL improvement programme.
Net operating revenues increased by 6.4% to NOK 2 694 million (NOK 2 531 million) and is exclusively organic driven. The increase in net operating revenues was driven by improved billing ratio, higher billing rates and improved project performance compared to the same period in 2019. There was a calendar effect of two more working days increasing net operating revenues by approximately NOK 28.3 million compared to the same period last year.
Operating expenses decreased by 2.8% to NOK 2 226 million (NOK 2 290 million). Other operating expenses decreased by 16.3%, a reduction of NOK 58.0 million due to lower travel, office and general cost reductions in most areas. The cost reduction on other operating expenses is partly a nextLEVEL effect as well as cost reduction related to Covid-19.
EBITDA was NOK 468.2 million (NOK 241.8 million), an increase of 93.7% compared to the same period last year. The EBITDA margin for the period was 17.4% (9.6%). EBIT reported was NOK 288.1 million and includes a one-off restructuring cost of NOK 30.0 million. The comparable 2019 EBIT figure includes one-off charges of NOK 30.2 million.
The EBIT ex. restructuring cost was NOK 318.1 million (NOK 127.8 million), reflecting an EBIT margin of 11.8% (5.1%). The restructuring of NOK 30 million is as a right-of-use assets impairment loss. The impairment relates to a review of Multiconsult’s office portfolio and is part of the previously announced restructuring costs in the nextLEVEL improvement programme. The comparable 2019 EBIT figure includes one-off charges of NOK 30.2 million.
Multiconsult is still in the turnaround process that started in the first half of 2019, where the focus has been on the core business, sales and project execution. The nextLEVEL programme is on track, and the order backlog provides a good foundation, supported by frame agreements generated from a broad customer base.
While Multiconsult has so far registered limited negative impact of the Covid-19 situation, the pandemic continues to create uncertainty for our industry going forwards. Subject to the above mentioned Covid-19 uncertainties, the market outlook for Multiconsult’s services remains good across most business areas. There are however more uncertainties within Buildings & Properties (including architecture) and in our international Energy business.
With a solid market position, high competence and technology, as well as leading solutions for our customers, Multiconsult believes it is well placed to handle the challenges of the current uncertainties facing the economy and our industry.