Earnings call transcript: Norconsult Q1 2025 sees 12% revenue growth

Norconsult ASA reported a robust financial performance for the first quarter of 2025, with a 12% increase in net revenues, reaching NOK 2.6 billion. Despite this growth, the company’s stock experienced a decline of 3.38% on the day of the earnings release. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score of 3.07, suggesting solid fundamentals despite market reactions. The decline in stock price reflects investor concerns over certain operational challenges and market conditions.

Key Takeaways

• Norconsult’s net revenues increased by 12% to NOK 2.6 billion.
• The company’s order book grew to NOK 7 billion, indicating strong future demand.
• Stock price fell 3.38% following the earnings release, closing at NOK 45.7.
• Temporary layoffs and efficiency measures were implemented in Norway.

Company Performance

Norconsult demonstrated strong financial performance in Q1 2025, with significant revenue growth and improved profitability. The company’s strategic focus on infrastructure and renewable energy projects contributed to its robust performance. However, the subdued private buildings and architecture segment posed challenges.

Financial Highlights

• Revenue: NOK 2.6 billion, up 12% year-over-year
• Adjusted EBITA: SEK 335 million, compared to SEK 227 million last year
• EBITA margin: 12.7%
• Profit after tax: SEK 257 million, up from SEK 103 million

Market Reaction

Following the earnings announcement, Norconsult’s stock price decreased by 3.38%, closing at NOK 45.7. This decline is attributed to investor concerns over temporary layoffs in Norway and market uncertainties, despite the company’s positive revenue growth and order book expansion. Based on InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. The company trades at an EV/EBITDA multiple of 21.66x and maintains a healthy balance sheet with more cash than debt. For comprehensive valuation insights and detailed financial metrics, investors can access the full Pro Research Report on InvestingPro.

Outlook & Guidance

Norconsult remains optimistic about future growth, focusing on larger mergers and acquisitions and improving its billing ratio. The company expects a stable overall market but remains cautious due to geopolitical factors. Signs of optimism in the private buildings and architecture market offer potential growth opportunities.

Executive Commentary

CEO Egl Hogne emphasized the company’s purpose to improve everyday life and its ambitions for growth through organic means and acquisitions. Hogne also highlighted optimism in the private market for buildings and architecture, despite current challenges.

Risks and Challenges

• Geopolitical uncertainties could impact market stability and growth.
• Subdued private buildings and architecture segment may limit revenue potential.
• Competitive pressures in certain market segments could affect profitability.
• Temporary layoffs and efficiency measures may impact employee morale.
• Variations in geographical market development, with Denmark showing the strongest growth.

Q&A

During the earnings call, analysts focused on Norconsult’s billing ratio challenges, M&A strategy, and temporary layoff impacts. The company addressed market optimism and its project pipeline, providing clarity on its strategic direction and future growth prospects.

Full transcript - Norconsult ASA (NORCO) Q1 2025:

Egl Hogne, CEO, Nordconsult: Good morning, everyone, and welcome to today’s presentation of Nordconsult’s First Quarter Results. My name is Egl Hogne, I’m the CEO of the company, and I will present the quarter together with our CFO, Dag Fladmi. After the presentation, we will take questions. We will start with the auditorium and then we will move on to those of you who are following us online. Please enter questions along the presentation in the chat and then we will answer them after the presentation.

As usual, I start my presentation by reminding you about some of the basic facts about NorConsult. Our purpose is every day to improve everyday life and as one of the largest design and engineering companies in the Nordic region, this is our main mission. We have six business areas: the Norway Head Office and regions Sweden Denmark Renewable Energy and finally, Digital and Technogarden. A bit more than half of our revenues are from public customers, the rest from private. And at the end of the first quarter, we had 6,600 employees spread around 140 offices, mostly in the Nordic region.

At the bottom of the slide, you will see how our revenues and margins have developed over the last seven years. And as you can see, we continue to have a rolling twelve month EBITDA margin of 10% also after the first quarter. In terms of the financial highlights of the first quarter, we report moderate growth and profitability. Our net revenues increased by 12% to a bit more than NOK 2,600,000,000.0, which adjusted for calendar effects represents a 5% organic growth. One of the characteristics of the quarter this year is that the calendar effect is quite big, because this year, Easter fell in April rather than March, and that means that there is a positive calendar effect from, on average, three more working days in the first quarter this year compared to the previous year.

Our adjusted EBITA ended at SEK $335,000,000, up from SEK $227,000,000. The EBITA margin was 12.7%, while when we adjust for the calendar effect, the underlying EBITDA margin was at 8.5% compared to 9.6% same quarter last year. One of the very important and positive developments was that our order book increased to 7,000,000,000 compared to NOK 6,400,000,000.0 at the end of last year. This NOK 600,000,000 increase represents both a considerable effort on our side to win new orders, but also some improvement in the overall market. During the quarter, we also adjusted manning and cost in two of our business areas in Norway regions and the Technogarden, where we saw some weaknesses at the end of last year.

In Norway regions, these measures will mainly take effect from April year, while in Technogarden we already saw a significant improvement at the end of the first quarter. When it comes to people and organization, I already mentioned that we ended the quarter at 6,600 employees, that is compared to 6,300 one year ago. An important reason for the increase during this quarter is the integration of 115 new colleagues from the Swedish company, Sigma Civil, which was an acquisition we completed during the first quarter. We also celebrated outstanding projects and team performances with our NOR Consult award event during the first quarter. And we extended our collaboration with Engineers Without Borders, which is an organization supporting societies in developing countries with building essential infrastructure.

We also renewed our partnership with MOUT Norway, which is an organization supporting mental health, in particular amongst youth. I would also like to mention that Nordconsult’s commitment to diversity, quality and inclusion continues as before, because we believe this is fundamental to have a strong business performance. And one of the examples, which we had a nice event on during the first quarter was a panel debate and event relating to the International Women’s Day. When it comes to the market in the first quarter this year, it was rather stable overall. We saw an activity level remaining subdued in the private part of buildings and architecture, but we do see indications of growing optimism and I’ll revert to that in the outlook section.

The public part of buildings and architecture was stable. There is one particularly growing segment, which is the defense spending, with a large number of projects, both small and larger projects. And this is the case in all of the Nordic countries where we operate. I would also like to mention that from a geographical point of view, we see that the Danish market is probably where we have the strongest positive development when it comes to buildings and architecture for the time being. Infrastructure, which includes transportation, water and environment, remains stable and very much in line with the long term public spending plans in the Nordic countries.

Energy continues to be the most positive segment. We are mainly operating in renewable energy, and it is, in particular, hydropower, which is showing the most positive development. But there are also wind projects, which are of interest and where we keep on winning a fair share of those projects. When it comes to traditional or other types of industry, there are big differences between the segments. We have seen some segments in green industry weakening, while there are other segments, including the defense industry, which are growing.

I’d like to show you some examples of projects, which we have won during the first quarter. And the first example is the largest single project, which has entered into our order book, and that is the E6 Highway close to Lillehammer between the two places of and This is going to be a 23 kilometer highway, including both a twin tube tunnel and a large bridge. This is a project which has been in the planning for actually approximately five years. So it was a major win for us when we finally won this together with the Norwegian construction company, Aifgirpen during the first quarter. Another project in the area of infrastructure is a road which constitutes the main access into the southeastern Norwegian city of Saarpsburg between Hofsloen and Dondern.

This is a project where Norconsult has all of the different technical disciplines, and it includes the upgrading of significant areas around the road as well. Then we have a project, which Nordic Office of Architecture, which is a fully owned subsidiary Norconsult, has won together with Norconsult and certain other companies for the design and engineering of the new cultural building or block in the northern city of I hope that you are able to recognize the profile of some of mountains around from the facade of this building. This is going to be a landmark building in which we think is going to create a lot of pride in the local community. Finally, we have a significant project in Northern Sweden, where we are working to support Boliden at their Rensaer plant, where Norconsult will be providing mechanical, electrical, plumbing, HVAC process and piping design for the plant in Rheinscheil. And with that, I would like to give the word to our CFO, Doug Flaube.

Dag Fladmi, CFO, Nordconsult: Thank you, Egel. First quarter had a moderate revenue growth, and our net revenue ended at SEK 2,600,000,000.0, up from SEK 2.4 That’s a 12% increase. And as Egel mentioned, this quarter has a substantial positive calendar effect of SEK 122,000,000. Our organic growth was 5%, excluding the calendar effects. The growth is driven through higher FTEs and also increased billing rates.

The increase in billing rates is also affected by lower index regulations than the same period last year, 2024, because the inflation has come down. When it comes to billing ratio that ended 71.5, down from 72.1, mainly due to a continued weak building and architecture market on the private side affecting Norway region the most. We are not satisfied with the billing ratio, hence we have taken measures to do temporary layoffs by effect with effect from March people in Norway region. EBITA ended at three thirty five million, up from two twenty seven. And that’s a margin of 12.7%, but the underlying margin is 8.5%, down from 9.6%.

And the main explanation for the decline is lower billing ratio, but also more vacation in the beginning of the year, where we typically had two so called bridge days in the January. Profit after tax $257,000,000, up from 103,000,000 and last year included 77,000,000 of cost for the gift shares. Before we go into the segments, a short overview over the EBITA contributors in the quarter. And as you see from the graph on the right side, Technogarden and Digital, as well as Sweden and Denmark contribute positively, while Norway head office and also renewable energy has a decreasing EBITA adjusted for the calendar effect. Then moving into the segments.

And as always, we will start with Norway Head Office. Net revenue ended at SEK802 million, up from SEK716. We had an organic growth in head office of 4%, driven by increased FTEs and also increased billing rates. The increase in billing rates is slightly lower in these segments, as the index regulation is slightly lower because of large infrastructure projects, which is typically indexed by CPI regulations. And as inflation has come down, that is also lower than 2024.

EBITA ended at 123,000,000, up from 84 with an underlying margin of 9.7% compared with SEK11.8 million the same quarter last year. The main reason for the lower profitability is lower slightly lower billing ratio, but also more vacation days in the beginning of the year. And it’s also slightly affected by a lower index regulation. Norway region ended with a net revenue of $788,000,000, up from $690,000,000. Organic growth was 7% due to increased FTEs and also increased billing rates.

The EBITA was 107,000,000, up from 56,000,000, including a calendar effect of 52,000,000. Hence, the EBITA margin was 7.5, down from 8.1. And as mentioned from Eglen in the beginning of the presentation, we are not satisfied with the development with the billing ratio and profitability in Norway region. Hence, we did a temporary layoff of 25 people, with effect March. Then, moving to Sweden.

And in Sweden, we had a net revenue of $463,000,000, up from $394,000,000. That’s a 17% increase, which also includes Sigma Civil for two months. The organic growth was 8%, driven by higher number of FTEs and also slightly increased billing rates. Billing ratio was stable in Sweden. When it comes to the EBITDA, 40,000,000 in the quarter, up from 37,000,000.

That’s a slightly decline in profitability from 9.3 to 8.3. That is also due to a dilution from the Sigma Severn, which reported zero in the quarter for the two first months from February to March, and also some integration costs of approximately SEK 3,000,000 related to that acquisition. Denmark had an organic growth of 8%, EBITA at SEK 17,000,000, up from SEK 13 and the profitability more or less in line with last year. Then into Renewable Energy. And in Renewable Energy, the largest division hydropower and transmission continued strongly with 11% organic growth, driven by increased FTEs and also increased billing rates and continued high stable billing ratio.

On wind and solar, the billing ratio was slightly lower and also we had some fewer FTEs in other segments, which leads to an organic growth of 3% in this segment. When it comes to EBITA, 43,000,000, up from SEK 36,000,000, still a strong margin of SEK 14 point 8 compared to 18.1% the same quarter last year. Hydropower and transmission continue with strong operational performance. And finally, on segments: Digital and Technogarden, where we have a total revenue of SEK288 million, down from SEK317 a 9% decrease mainly due to reduced FTEs and also slightly lower volume in Technogarden. We have increased the profitability in digital due to the measures we’ve done in 2024.

And in Tecnogarden, this quarter has lower profitability, but we have taken measures to improve that. A few words on the cash flow and cash flow from operation follows seasonality. In this quarter, we have cash flow from operation of minus 53,000,000 due to increased working capital. And one of the largest explanation is reduced liability on the withholding tax related to the gift shares we distributed last year, which had a positive effect in quarter four. That is amounting to around SEK160 million.

In addition to that, we had some increase in working capital due to growth. Cash flow from investment activities minus SEK 58,000,000, slightly up from SEK 46,000,000, slightly higher CapEx and that is partly mitigated by lower payments to M and A compared with the same quarter last year. And cash flow from financing activities more or less in line with last year of 102 in minus. Our balance sheet is strong. We have cash and cash equivalents of SEK 1,400,000,000.0 at the end of the quarter compared with SEK 1,600,000,000.0 at year end.

And remind you that we have paid out SEK 160,000,000 in the withholding tax, which was included in the year end balance. We don’t have any interest bearing debt, hence our leverage ratio is minus 1.39 and our working capital at the end of the quarter is 127 compared with year end, which is negative by three zero eight. And if you compare this with the same quarter last year, that was plus 14. And as I mentioned, the increase is mainly due to growth. And finally, from my side, the order book ended at SEK 7,000,000,000 due to good order intake in the quarter, representing a good mix of smaller, medium and also larger projects.

The order book includes two major infrastructure projects, Storaverotru and also an extension of an existing project, a railway project in Inmos. These two are examples of good prospects for continued medium growth and long term growth. And by that, Tegen, I leave the word to you to give you us more insight about our position in the airport market.

Egl Hogne, CEO, Nordconsult: Right. And the airport market is a market where our subsidiary, Nordic Office Architecture, has a particularly strong position. And I left the previous slide on a little bit longer on purpose because one of their other new wins is the new football arena in Bode, where the famous Norwegian football team, Bode Glymp, which has done very well in the Europe League, will have a new stadium. But Nordic, as we call it, is also a global leader in airport design. And on this picture, you probably recognize the newer part of the Gardemund Airport, the Oslo Airport, which is an award winning airport.

It continues to win awards both for its designs and its functionality. And Nordic Office of Architecture people started their work in airports more than 35 ago. And it was the airport in Oslo which was the real breakthrough in their international reputation for the reasons which I mentioned. And since then they have won and executed airport projects around the world with approximately 40 airport projects completed now in total during this period. The airport market was significantly subdued during the pandemic.

And during that period, profitability and activity clearly dropped, but what we are seeing now is that this is increasing nicely again. Airports are very large and complex projects. From a design point of view, they are all expected to be landmark projects. They shape society in terms of how they look and they are expected to both reflect the leading state of the art design as well as the local society and nature where they are located. But in addition to that, airports are extremely complex from a logistical point of view, with during peak times enormous numbers of passengers passing through the airports with their luggage, and of course people expect the luggage to be there when they arrive.

So airports require a very strong cooperation between architects and engineers to be successful, and this was one of the main reasons why NorConsult acquired Nordic some years ago. We worked together at the Gardermoen Airport, which is now more than thirty years ago, but finally we then became part of the same company eight years ago. I have a video which I would like to show to you, which shows some of the both historical and current projects which Nordic Office of Architecture has conducted. Many of them have been together with Nordconsult, but some has also been with other partners. So with that, I’d like to So those were some of the examples of the excellent architecture of Nordic office of architecture.

Then I’d like to round it all off with our outlook comments. We continue to expect our overall market to be stable, but there is continued uncertainty relating to the international political situation. And I say that not because NorConsult is particularly exposed to tariffs or the geopolitical uncertainty, but tariffs and geopolitical factors may affect the total economy and of course if there would be a recession in the economy, that is something which would also impact NorConsult. That being said, we continue to see signs of optimism in the private market for buildings and architecture. I’ve already mentioned that from a geographical point of view, we see the strongest tendencies in Denmark.

However, what we do see is a larger number of projects coming up in all of the Nordic markets. However, several other projects are not so big and some of them are still in a very early phase. But when we look at the first quarter this year, we see that we have written more offers And as you have seen, we have also increased our order book more compared to what we did a year ago at this point in time. Infrastructure continues to be characterized by stable demand. And when it comes to energy and industry, we continue to see roughly the same picture as I described during the first quarter, with a very strong market in energy, with differences between the various segments in other types of industry.

A challenge for the industrial market is that there have been delays taking place during the first quarter. This is something which has affected Norconsult’s project. It has also affected competitors’ projects. We are hoping that there will be stability in the frame conditions going forward, which we think are maybe the most important factor to allow industrial companies to trigger the investments which they have been planning for quite some time. We have mentioned that in the first quarter, we have taken certain measures to improve underlying profitability and maintain our efficiency.

To the extent that will be necessary, we will continue to take similar types of measures, but we have no immediate plans for any further measures as we speak right now. And I think with that, we would like to open up for questions, and we will start with questions in the auditorium and then we will move on to questions from those of you following us online. So who would like to go first? Magnus.

Magnus Rasmussen, Analyst, SEB: Thank you. Magnus Rasmussen, SEB. Three questions, if I may. Firstly, there’s a small change in the wording on the outlook for the Buildings and Architecture segment. I think it’s changed from small signs of improvement to signs of optimism.

I’m just wondering whether that’s a positive change. Secondly, on the Sweden segment, you’ve had very strong improvements year on year over the past couple of quarters. We don’t really see that this quarter, more of a flat development, also sort of looking besides Sigma Seville. Does that mean that you sort of have taken out the easy wins, can we expect more improvements in in Sweden going forward? And also the FTE count in Sweden increases more than the number of employees or FTEs acquired in Sigma Seville, especially if only two thirds of that’s counted.

So I’m just wondering whether there’s been some significant recruitment in Sweden beyond Sigma as well. Okay.

Egl Hogne, CEO, Nordconsult: Shall I start? You started by asking questions about the little text here on signs of optimism, whether it is a little bit more positive than the slightly text last quarter. I think it’s fair to say that it is slightly more positive this time, but I would like to underline slightly because it is not so that we see a fundamental change, but it is a little bit better now compared to what we saw at the end of the fourth quarter. Your second question was relating to Sweden. You like to comment upon that, Dirk?

Dag Fladmi, CFO, Nordconsult: Yeah. You’re right in Sigma, Severe is diluting the margins, approximately 0.5% points. In addition, we have the integration cost of 3,000,000. But your question was have we taken out the improvement opportunities in Sweden? I will say no.

Our target is still to be on, you can say, 10% in all countries, but this will vary from quarter to quarter. When it comes to even if the billing ratio was quite stable, we saw some stops in larger infrastructure projects, which affected slightly also the infrastructure department in Sweden, but that was temporary because some of them stopped. I can maybe also answer the FTE question. The count when we do the counting of FTEs is not the average, so it’s the end of month, meaning that you include the full 115 in the quarter. Yes, we do recruitment in addition to that, because we feel that we have a position to recruit and we would like to grow further in Sweden.

Egl Hogne, CEO, Nordconsult: Yes, we have a position to recruit and I would like to say that we are very happy with the popularity we experience in Sweden relative to candidates. We get a lot of applications from qualified candidates and that is and has been and we expect to continue to be a very important model growth for our business in Sweden.

Magnus Rasmussen, Analyst, SEB: Thank you.

Egl Hogne, CEO, Nordconsult: Martina?

Martina, Analyst, Nordea: Martina from Nordea. I think you answered my first question. It’s just like the end of employee count, does that include the 25 that you are taking measure on this quarter?

Dag Fladmi, CFO, Nordconsult: No, they are not excluded because they

Martina, Analyst, Nordea: Okay, so that’s next quarter.

Ben, Analyst, ABG: Next quarter.

Martina, Analyst, Nordea: Okay, perfect. And if you can just say any comments around the development and the run rate and the billing ratio and what you expect going into the next quarters? And also, like, a little bit on how that measure will affect the overall billing ratio?

Ben, Analyst, ABG: Yeah? Would you like to Yeah.

Dag Fladmi, CFO, Nordconsult: We have taken some measures in Norway regions with the temporary layoffs. We expect that to improve the billing ratio going forward. So that is one measure. We have a positive order intake and a good order book. So hopefully, that will also develop the, you can say, the billing ratio positively.

We are not satisfied with 71.5. And as Egel mentioned, if we feel it’s necessary, we will do further measures. Great.

Martina, Analyst, Nordea: Thank you.

Egl Hogne, CEO, Nordconsult: Yes, Ben?

Ben, Analyst, ABG: Thank

Jenny Pedersen, Analyst, Carnegie: you. Benkton, ABG. Three questions, if I may. Maybe back to Martina’s questions on the billing ratio. Maybe you can elaborate a little bit about the bridge year over year, what has impacted the billing ratio drop year over compared to last quarter same quarter last year?

Second question would be on the competitive picture. Do you see any price pressures, increased competition somewhere in some pockets? And the final question would be on the M and A. You have 1% growth from M and A this quarter. Historically, it has been 3%.

So you obviously the M and A growth is lower now than compared to its history. Is it due to tougher competition, fewer candidates, higher price demands, etcetera?

Egl Hogne, CEO, Nordconsult: Do you want to start with the billing ratio?

Ben, Analyst, ABG: Then I can

Dag Fladmi, CFO, Nordconsult: Yeah. On the billing ratio, the bridge year over year is mainly, I will say, in Norway region, the drop due to the weak market we had the last year in private building and architecture. On the other segments, it’s no major changes really.

Egl Hogne, CEO, Nordconsult: Then when it comes to competitive price pressure, we see that in some segments there is quite some competition. There is some price pressure. There is always, but there has been a little bit more, I would say, this quarter than maybe what it was the year before. When it comes to M and A, we spend quite a bit of time analyzing and working on M and A opportunities. NorConsult has a size today, which means that we need to focus on slightly larger M and A projects than what we have done previously.

So instead of going after very small acquisitions, we are looking now at somewhat larger acquisitions. That naturally means that this will be a little bit more chunky. So you might see quarters where there is not so much happening, and then there might be quarters where there is more happening. So this is of a high focus to us. We are ambitious when it comes to growth, both organically and when it comes acquisitions, but you might expect to see a little bit more of a lumpy development going forward.

Dag Fladmi, CFO, Nordconsult: And also since the three acquisitions we did last year was kind of small bolt ons, they they don’t really you can’t see them really in the figures for the growth.

Chris Osslin, Investor Relations, Nordconsult: Yeah. Sorry. Jenny? Jenny Pedersen, Deme Carnegie. I was wondering if it’s possible to quantify how much improvement do you expect in the billing ratio for the segments where you’re doing layoffs next quarter or temporary layoffs, sorry.

Dag Fladmi, CFO, Nordconsult: I don’t think we will guide on it. We will I think we will see gradually improvement. It’s not a big bang. So this will develop gradually gradually during the year.

Chris Osslin, Investor Relations, Nordconsult: Okay. And then I also have a question on the the outlook here for the building and architecture segment because I think this wording is something you’ve said for the past five quarters that you’re seeing some signs of optimism. So I was wondering, are you surprised about how long it’s taken to materialize into actual demand?

Egl Hogne, CEO, Nordconsult: Well, we are surprised that we have not yet seen any interest rate cuts in Norway, as I think most analysts are as well. We expected to see that maybe, you know, a year ago, and then it has dragged on. We have seen, as I mentioned, that interest rate cuts in Denmark have had an impact, and there the market has, in fact, changed. It hasn’t really changed that much in Sweden, which is maybe the larger surprise because they did interest rate cuts at the same time as Denmark. However, a previous question was whether this comment here is now a little bit more positive compared to what it has been previously.

And I replied yes to that question because we have seen an increase in our order book and we have seen an increase in the numbers of offers written and also total number of assignments coming into our order book, which has increased somewhat. So yes, it is moving slow. This is a little bit frustrating, but it is moving in the right direction.

Ben, Analyst, ABG: Thank you.

Magnus Rasmussen, Analyst, SEB: One more question from me. Magnus Rasmussen, SEB. My understanding is that increased number of vacation days early this year because of the bridge days in January does not affect the billing ratio. Is that correct? So the lower billing ratio is driven by other reasons.

Dag Fladmi, CFO, Nordconsult: That’s correct.

Ben, Analyst, ABG: Thank you.

Chris Osslin, Investor Relations, Nordconsult: Last quarter, you were talking about that there’s more smaller projects than megaprojects. Is this the same picture you’re seeing now, or has there been any change to this view?

Egl Hogne, CEO, Nordconsult: The general tendency is correct, small to medium rather than very large. But we do have one very large project, which we presented here, which is the E6 project close to Lilhammer. During this quarterly presentation, we have not spent time on the NRK Building because it did not enter or it was not won during the quarter, but that is also a very large project, but that will be part of the second quarter when the quarantine period is finished. One more question here in the auditorium. Thanks.

Jenny Pedersen, Analyst, Carnegie: Out of curiosity, is Easter better to have it in the first quarter or the second quarter for Norconsult’s business?

Egl Hogne, CEO, Nordconsult: Wow. Yeah. That’s an interesting question. What did you say?

Dag Fladmi, CFO, Nordconsult: What should we say on that? I think it’s neutral. Yeah.

Egl Hogne, CEO, Nordconsult: It it it is fairly neutral. Some sometimes it can have a little bit of an impact if it is exactly at the end of the month or not, but but that’s not really an issue this year, so due to some invoicing patterns and so on. Yeah. Unless there are more questions in auditorium, I think we then move on to the questions we have received online.

Ben, Analyst, ABG: We will. You’re listening to Chris Osslin. I work with Investor Relations in Nurtkonsert. We have answered some of the questions that we have received, but I’ll summarize three from Jesper Stugumon in Hommingspanken. The first question relates to our utilization.

What’s required from Nur Consult to lift utilization? Is this largely market driven or is it based on internal processes? The second question relates to the FTE adjustments in Norway region. What’s the expected cost reductions associated with this in Q2? And will this be reported as a non recurring item in the Q2 presentation?

And thirdly, on further efficiency measures, is this mostly related to overheads or is this related to billing ratio on consultants?

Egl Hogne, CEO, Nordconsult: Okay. Maybe I can start on how to lift the utilization and then Doug you do the FTE adjustments and cost. When it comes to lifting the utilization and how we do that, this is a very active discussion we continue to have almost on a weekly basis in the company because we are matching our capacity to what we are receiving in terms of orders and frame agreements and so on. And we continually have to evaluate our capacity relative to what we think is coming in. During the quarter, we have decided to make some adjustments in the Norwegian regions due to the fact that we perceived some of the necessary capacity adjustments to be necessary to make because we saw that we have too much capacity in some areas, one of those was in terms of local architects.

However, we expect to see both improvements going forward when it comes to the orders, which we have received in our increased order book. And we will see some improvements relating to the de manning, some temporary layoffs, some permanent layoffs, which has been executed. So it is a combination of both. But as I mentioned previously, we will continue to work on making sure our capacity is in line with the demand. And then, Doug, will you Yes.

Dag Fladmi, CFO, Nordconsult: On the temporary layoffs, the cost effect in quarter two will be approximately SEK 4,000,000. And remind you that these are temporary layoffs, so so and that is, for time being, for six months, so we get the refund from from the government. So that’s why it’s 4,000,000. Reported as a non recurring item? No, this will be reported as ordinary stuff.

So we will not have a

Egl Hogne, CEO, Nordconsult: non recurring item on this. And And I believe the final question was whether efficiency measures were only relating to overhead or demanding and how it will impact. We mentioned previously that we have done some demanding and some cost reduction. This is mostly on the overhead side, both the cost reductions and the yes, well, demanding is a combination actually. In Technogarden, it is on the overhead side.

In regions Norway, it is on the consultancy side. I hope that answered the question.

Ben, Analyst, ABG: I hope so too. Thank you, Eger. I think that completes our online questions. Okay.

Egl Hogne, CEO, Nordconsult: I then ask if there are any more questions from the auditorium. Doesn’t seem to be any more questions. Then I would like to thank everyone for following our first quarter presentation. Looking forward to see you again after the second quarter. Thank you.

Ben, Analyst, ABG: Thank you.

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