Earnings call transcript: Norconsult Q2 2025 sees revenue rise, stable outlook

Norconsult reported its second-quarter 2025 earnings, revealing a net revenue increase to SEK 2,468 million, up from SEK 2,400 million in the same period last year. The company also showed a slight improvement in its adjusted EBITA margin, reaching 11.2%. Following the earnings announcement, Norconsult’s stock saw a modest rise of 1.55%, closing at NOK 42.05. According to InvestingPro analysis, the company appears slightly undervalued, with a P/E ratio of 19.65 and impressive revenue growth of 11.83% over the last twelve months.

Key Takeaways

• Norconsult’s Q2 net revenue rose to SEK 2,468 million, marking a year-over-year growth.
• The company’s adjusted EBITA margin improved to 11.2%.
• Stock price increased by 1.55% post-earnings announcement.
• Strong project wins in broadcasting, rail, and renewable energy sectors.
• Stable market outlook with continued focus on efficiency and cost management.

Company Performance

Norconsult demonstrated solid performance in Q2 2025, with net revenue increasing to SEK 2,468 million from SEK 2,400 million a year earlier. The company achieved organic growth of 6%, adjusted for calendar effects. Despite a slight decline in profit after tax to SEK 114 million from SEK 138 million, the company’s strategic focus on complex infrastructure projects and innovation appears to be paying off.

Financial Highlights

• Revenue: SEK 2,468 million, up from SEK 2,400 million in Q2 2024
• Adjusted EBITA: NOK 152 million
• Adjusted EBITA Margin: 11.2%, up from 11%
• Profit After Tax: SEK 114 million, down from SEK 138 million

Outlook & Guidance

Norconsult maintains a stable market outlook, with a continued emphasis on efficiency and cost management. The company foresees potential challenges in export-oriented industries due to international political situations but remains optimistic about its long-term billing ratio target of 74%.

Executive Commentary

CEO Egel noted, "We continue to see a stable market," highlighting the company’s resilience and adaptability. CFO Dag Flabbe emphasized, "Our long-term target is still 74% [billing ratio] on average," indicating a focus on maintaining operational efficiency. Egel also remarked on the company’s swift problem-solving capabilities, stating, "When we have an issue, we deal with it and are able to improve fairly fast."

Risks and Challenges

• Export-oriented industry challenges due to geopolitical tensions.
• Potential pricing pressures in competitive markets.
• Recruitment strategies to maintain a skilled workforce amid industry growth.
• Calendar effects impacting financial reporting.
• Integration challenges following recent acquisitions.

Q&A

During the earnings call, analysts inquired about Norconsult’s M&A strategy and recent acquisitions, expressing interest in how these could enhance growth. There were also questions regarding pricing pressures and recruitment strategies, which the company addressed by emphasizing its focus on efficiency and competitive positioning.

Full transcript - Norconsult ASA (NORCO) Q2 2025:

Egel, CEO, Norconsult: The CEO of the company, and I will share today’s presentation with our CFO, Tag Flabbe. In the second quarter, Nordconsult continues to show solid growth and stable profitability. We had a solid market during the quarter, And we’ve had several important wins, out of which you see the largest one on the front page, which is the Norwegian Broadcasting Corporation’s new Head Office and Media House in Oslo. For those of you who are new to Norconsult, we’d like to just briefly give you an overview of the company. We are Norway’s largest and the leading Nordic engineering and architecture company.

We have six reporting segments. The two largest are the Norwegian Head Office and Norway regions, while the others cover the rest of the Nordics. We have roughly half of our customers in the public sector, half in the private sector. And we have our business fairly evenly spread between buildings and architecture, infrastructure and finally energy and industry. We have shown a stable growth and profitability over time.

And we currently have approximately 6,600 employees and 140 offices, mainly in the Nordic region. During the second quarter, we had net revenues increasing to 2,468,000,000.000. We had an organic growth of 6% adjusted for calendar effects. Calendar effects is important in our business, because we charge according to the time worked. And in the second quarter this year, we had Easter, while in the second quarter last year, we had in the second quarter last year, we had Easter sorry, during the first quarter.

That resulted in calendar effects of approximately SEK140 million. And this was the direct reason for why our adjusted EBITA ended at NOK 152,000,000. If you add the calendar effect on top of that, it was a better EBITA compared to last year. And this we also see in our margin, which adjusted for the calendar effect was 11.2% this year compared to 11% last year. The main event during the second quarter was the announcement of our acquisition of the Osiakopsten Group, and I will revert to that later.

But that was a major strategic development due to the strong competence of the Osiakopsten Group, particular infrastructure and complex construction projects. Our order book continued to increase to NOK 7,100,000,000.0. And we have a solid starting point for the second half of this year. For the first half, we saw again an increase in net revenues to 5,100,000,000.0, and our adjusted EBITA was approximately the same as last year at SEK $487,000,000. There was a small negative calendar effect and adjusting for this, which was SEK 20,000,000, our adjusted EBITDA was slightly higher than last year.

All in all, the EBITA margin adjusted for the calendar effects was 9.9%, which aligns very well with our communicated financial target of 10%. On the people and organization side, we had a stable number of employees from the first quarter, 6,600, while the number of full time equivalents increased by 4.5% compared to the same quarter last year. In Norconsult, approximately half of the company is owned by our employees. And every year, we have a share program for the employees. And again, we had a record participation in this employee share program, as 66% of our employees participated and bought shares.

This is significantly higher than at other comparable companies, something we are proud of and something which we believe align the interests between employees and shareholders. During the second quarter, we also had our Sustainability Week, which is our largest conference, digital conference, where we invite both customers and other partners. We had approximately 60 webinars during the week, approximately 6,700 viewings. And I think in total now in retrospect, have passed approximately 10,000. The market has been quite stable.

All in all, it has been maybe slightly more positive than in the first quarter, but there are no major developments. The private buildings and architecture market continues to be slow, but with indications of slightly growing optimism. Public projects, including the defense sector, is stable. Defense is growing, and this is then partly compensating for the somewhat weaker private sector. Infrastructure continues to be stable, very much aligned with the long term public spending plans in all of the Nordic countries.

Energy and Industry is still one of our strongest markets, in particular the energy market for power production and power distribution. In Industry, there are differences between different industries. Some are quite strong, others are a bit weaker. And most recently, we’ve seen that the weaker segments have been mostly in the green industry sector and some export industries. I’d then like to give you some examples of recent project wins.

And let me start by talking a little bit more about the Norwegian Broadcasting Corporation, NRKs, new head office, which we are very proud to have won both on the architectural side and the engineering side. On the architectural side, we competed against, I think, have I to say all of the leading Scandinavian architects. And we won this design competition. And the construction of the building was awarded to Hent, which is a part of the Sentia company. And when they won the award, they awarded most of the engineering disciplines to Norconsult.

This is a major project where the design work has already started and it will continue for several years. I would also like to add a comment about in general the architectural business, because the architectural business has been quite challenging. What we are seeing now is that in Denmark, for example, our architects are very much catching speed. We are hiring architects and we are growing. And in Norway, in the Nordic Office of Architecture, which is the name of the architectural business where most of our architects are working in Norway, they have also started hiring freshly educated architects, which is a positive and happy development in this part of the industry.

Another important win was the planning and zoning for the extension of Biban in Bergen. This is a light rail development in Bergen going to Sandviken. We’ve done a lot of work for Biban in the past and we are very thankful for the continued confidence from our customer to continue to develop this. Fine, another important win both architectural side and the engineering side is the new university hospital in North Norway, where the Oskar Hospital for Mental Health and Substance Abuse is going through a major renovation and expansion. And this is again a project where we are benefiting from working together with our architectural colleagues in Nordic Office of Architecture, as well as the Nordconsult engineers and also Nordconsult architects.

The final project example I want to show you is the North Sea offshore wind development on the Norwegian part. This is called Solea Nusse 2, where we are working for the joint venture Ventir. Here we have won a major front end engineering and design study for the onshore grid infrastructure together with the environmental impact assessments. This is a strategically important project for Norway. It’s the first major wind development offshore.

And we are looking forward to developing this together with Venti. And with that, I would like to give the word to our CFO, Doug Flabbe, who will take you through

Dag Flabbe, CFO, Norconsult: Thank you, Egel. We will start with Q2 figures of course. Net revenue in first quarter ended at SEK 2.47 up from SEK 2,400,000,000.0 the same quarter last year. As Egel mentioned in the beginning of the presentation, this quarter has substantially calendar effects as we had three less working days amounting to minus SEK 141,000,000. Adjusted for that, our net revenue growth was 9% in the quarter and organic growth 6% driven by increased billing rates and also increased FTEs.

Our billing ratio at the end of the quarter 74.7%, up from 74.6%. And the of the improvement is Norway region. EBITA 152,000,000 compared to SEK $263,000,000 the same quarter last year. And adjusted for the calendar effect, we have an EBITA margin of 11.2%, up from 11.1110%. The improvement is mainly due to Norway region, but also Norway head office.

Profit after tax SEK114 million compared to SEK138 million last year and last year included one off cost of the gift share, so SEK 87,000,000 pre tax, while this year has a really strong negative calendar effect. A quick look at first half, where we have minor calendar effect just minus SEK 20,000,000 net revenue at SEK 5,100,000,000.0, which is up from SEK 4.76. Increase of net revenue 8%, while organic growth is 8% driven by increased FTEs and also increased billing ratio billing rates. The billing ratio at 73% slightly down from last year. And as we see as we saw from the Q2 figures, the improvement is now coming in quarter two.

EBITA €487,000,000 compared to $490,000,000 And adjusted EBITA margin adjusted for the calendar effect is 9.9%, slightly down from 10.3%. And that is mainly due to a soft quarter in first quarter. As we have seen, the second quarter is improving, mainly as we see effects from measures we have taken in previous in selected business areas in previous quarters. In first half, we also have a negative EBITDA effect of the integration of Sigma Seville of amounting to 9,000,000. The integration plan is going as planned and we will come back to more details later in the presentation.

Profit after tax, SEK $371,000,000 compared to SEK $242,000,000 and last year included cost for gift shares of SEK 167,000,000. EPS SEK 1.23 versus SEK 0.85. And now back to second quarter figures again. And before we deep dive into the segments, a short look at the contributors where I mentioned that Norway region is contributing EBITA the most, but also Norway Head Office and also Renewable Energy is positive contribution adjusted for calendar effects. Sweden, Denmark and Technogarden and Digital are slightly behind last year.

Moving into the segments, starting with to the left Norway Head Office, where we had a net revenue in the quarter of SEK735 million compared to €740,000,000 The organic growth is 6% driven by increased FTEs and billing rates. The calendar effect is negative with €54,000,000 this quarter. EBITA, 69,000,000 compared to SEK 109,000,000 the same quarter last year, where we have the adjusted EBITA margin in second quarter now at 15.5%, up from 14.8%. And that is mainly due to increased revenue, but also continued high billing ratio and good performance in project execution. Looking at first half figures for Norway region, we have an organic growth of 5%, adjusted EBITA margin of 12.6% versus 13.3% same period last year, and that is mainly due to a soft first quarter.

Norway region net revenue SEK $714,000,000, up from SEK $7.00 6,000,000. The organic growth in the quarter is 9%, driven by increased FTEs, increased billing rate, but also increased billing ratio. And the billing ratio is now for first time in several quarters higher than last year. And that is due to the measures we have taken the previous quarters. That also is positive to the EBITA and the underlying EBITA margin, which ended at 14.4%, up from 12.5%.

Looking at first half for Norway region, we have an organic growth of 8% and also now due to the performance in second quarter a better underlying EBITA margin of 11% compared with 10.4 Moving to Sweden to the left. Net revenue $4.64 in the quarter compared with $3.98. It’s negative calendar effects, so minus 12,000,000 in the quarter. And adjusted for that, we have a growth of 20%. Sigma Severe is included from February with SEK 23,000,000.

The organic growth in Sweden is 6% and that is driven by higher number of employees and also increased billing ratio. EBIT ended at three million in the quarter compared with 20 and adjusted for the calendar effects, we have EBITA margin of 3.2, which is down from 5.1. And as I mentioned in first half results, Sigma Sibrill is now integrated in the company, but that has also affected the quarter two slightly negative with SEK 6,000,000. We are seeing positive development on billing ratio from the integration, but it will take some time before we get up to satisfactory level of performance. Ege will come more back to details on integration plan at the end of the presentation.

Denmark, organic growth of 7%, driven by higher billing rates and also increased FTEs. The calendar effects is minus 6,000,000 adjusted EBITA margin 6.2%, slightly below second quarter last year. We have invested in senior recruitment in this quarter and also year to date. This quarter affects negatively by SEK 3,000,000, while the first half is around SEK 6,000,000. And the investment is to secure long term growth.

Then Renewable Energy. And Renewable Energy has an organic growth this quarter with 7%. However, strong organic growth in hydropower and transmission amounting approximately 17% organic growth. So that market is strong. This is partly offset by lower revenue in the international operations.

EBITA at €24,000,000 down from 36 And adjusted for the calendar effect, we have a strong EBITA margin of 17.8%, slightly up from 17.5% last year. And the maintained solid margin is due to a continued high billing ratio and also increased rates. Finally on segments, Digital and Technogarden, the total revenue declined by 11%. That is mainly due to lower volume in Sweden and also less FTEs in both digital and Technogarden. Adjusted EBITA €6,000,000 down from 10 slightly lower.

We have improved profitability in digital due to the measures we did in 2024. And however, Technogarden is performing under expectation. We have done some measures and we will continue to take measures to improve profitability. Now into cash flow and focus on this slide is cash flow from operation, where we have in this quarter SEK $395,000,000 in terms of cash flow from operation versus SEK $5.00 1,000,000 same quarter last year. The second quarter twenty twenty four was affected by a positive cutoff effect as payment, which were due first quarter had was in a bank holiday and then we received that payment in second quarter in 2024.

That is approximately 80,000,000. We also have some increased working capital due to seasonal changes. Cash flow from investment activities more or less at same level as last year, while cash flow from financing activities is minus SEK $610,000,000, increasing from SEK $454,000,000 mainly due to increased dividend payment in second quarter. Few words on the balance sheet. Our balance sheet is strong.

This is June. Cash and cash equivalents of 1,200,000,000.0. We have a leverage of minus 1.33 excluding the IFRS and net working capital slightly above zero with 33,000,000. In third quarter, the balance sheet will be affected by the acquisition of Osir Kopsen, where we also will have external debts. Eger will come slightly back to that later when he talk about integration process of Osir Kops.

And finally, from my side, a few words about the order book, which increased to SEK 7,100,000,000.0, up from SEK 7,000,000,000 in quarter one. The order intake in second quarter has been a good mix of smaller and medium and also larger projects with in the different market areas. We have also won several important framework contracts where two of them are on this picture, which secure us for the revenue growth going forward. And with Artegil, I leave the word to you to talk about give some more flavor on how we work with integration.

Egel, CEO, Norconsult: Thank you very much, Dag. And I would like to tell you a little bit more about how we integrate our acquisitions, because we have recently made one in Sweden and one in Norway, and they are so far progressing well. First, a few words about our Swedish acquisition of Sigmar Civil. This is a company working mostly in the Construction and Infrastructure segment with approximately 100 employees. When we acquired it, it was a company where we knew that it was a turnaround case, but we also knew that they had strong competence in the company in the form of the engineers and the fundamental operations.

We had a low acquisition price in this case, as it was a turnaround case, But we had the opportunity to integrate all of the four sorry, the five offices into existing locations where Norconsult already offices. At this stage, all of the Sigma civil teams are fully integrated into our operations. We have put in place actions to improve the billing ratio. And after the acquisition in February, we’ve seen a steady improvement in the billing ratio since the month of April. Administrative functions have been streamlined.

There has been demanding taking place there, because there were overlapping functions. And these costs have not been separated out. But when we look at the negative effects presented by our CFO, the SEK6 million in the second quarter, the SEK9 million in total over the first half, approximately half of that is one time cost associated with restructuring. The other half is associated with a somewhat lower billing ratio at the start of the integration. All in all, we are progressing well on track.

And three of the five Sigma Civil offices have now been relocated into the Nordconsult offices. We see the cost synergies. And when we look at the total number of Sigma Civil employees, two thirds of them have been integrated into existing NorConsult office space, meaning that we have not had to rent further space. The remaining one third, we will have to rent some more space, but all in all, we expect to see considerable synergies here. Then on to our largest acquisition this year and actually the largest Norconsult has done historically.

For those of you who know the construction industry in Norway intimately, you will be very familiar with the Osiakopsen name. It is a company with approximately ninety years of experience, mainly with advanced and complex structures and in particular infrastructure. They are very similar to some of the departments we have in Norconsult, where we have assembled a very strong expertise over time, actually fairly similar to the one we see in Osiakopsen. One of the features of the company is that they have experienced quite stable growth at approximately 5% per year and a consistent profitability with an EBITA margin at approximately 20% or actually consistently above 20% for the last decade. This is higher than the average on Norconsult, but it is actually very similar to those parts of Norconsult, which are similar to Osiakopsen, because this is a business in a particularly high expertise area, where the value of that expertise catches high margins with customers.

And this is then in particular for large roads, bridges, rail and metro projects, where the complexity is particularly high. Osiakopsen has two thirty employees in Trondheim and Oslo, close to where Norconsult has its offices. We believe that Osse Akobsen will further strengthen our market leadership. It will increase our ability to deliver large and complex infrastructure projects. We have cooperated historically on a number of projects, because we see that the combination of also Akopsten and Orkonsult is particularly relevant for the most advanced projects.

And this has been highly appreciated by our customers in the past, and we believe it will continue to be even more appreciated as we now will be completely integrated. In terms of some transaction highlights, we have now closed the transaction. It was closed on the August 6, following the approval from the Norwegian competition authorities. The enterprise value was SEK 1,430,000,000.00, which represents a multiplier of SEK 13,900,000.0 to our adjusted sorry, compared to the adjusted EBITDA of 2024. The final equity purchase price was approximately 1,500,000,000.0 and it was paid with 80% cash and 20% of shares, resulting in the issuance of a bit more than 7,000,000 Norkansalt shares to the former Osiakopsen shareholders.

The financial impact is that our net debt to EBITDA ratio, including the IFRS 16 leasing commitments, is approximately at one, meaning that it is far below our long term debt target ceiling. Pretax cost synergies, we estimate to NOK 25,000,000. They will not be fully phased in before 2028 due to some existing leasing commitments of Osiakopsten, which expire in 2027. Yeah, I skipped that one. The financials will be included from this month, August.

And in terms of the seasonality, you should expect it is very similar to Norconsult, meaning that also the calendar effects are quite similar. We have now set up joint management teams, which are working on the integration plan and synergies. It is important for us to do this in full cooperation with our new colleagues from Osiakopsen to make sure that they are well integrated in the best possible way. The estimated integration costs are NOK 10,000,000, which we estimate half to come this year sorry, next year and half in 2027. We will give a further update on in terms of targets and what will happen at our Capital Markets Day on the November 5 this year.

That is the same date as our third quarter presentation. And with that, I’d like to give some final comments relating to the outlook. When it comes to the outlook, the main message is mainly boring, but we continue to see a stable market. There is uncertainty linked to the international political situation, but that is impacting a fairly small part of our business, mainly the export oriented industries, which may be affected by tariffs. We continue to see signs of optimism in the more private market for Buildings and Architecture.

And I mentioned previously that our architects are seeing some increased demand, but here there is still a difference between the public and private sectors. So there is no bonanza for the architects working in the private sector, while the public sector is at a good level, partly compensating for the private parts. Infrastructure is stable. And when it comes to energy, we continue to see a good demand in renewable energy, mainly hydropower. It’s a little bit slow in wind and in solar, but transmission is also strong across all of our Nordic markets.

I talked a bit about the industry markets, where we do see some variability between the sectors. When we had our first quarter presentation, we talked about taking proactive measures where we see weaknesses in our business. All in all, our business is doing well, but as our CFO explained, there are parts of it where we see improvement needs. And there, we continue to take action to make sure all parts of our consult are doing well on a sustainable basis. And with that, we would like to open up for questions.

We will start with questions here in the auditorium in Oslo, and then we continue with questions received online. And the first question comes from Simon in DNB Carnegie.

Simon, Analyst, DNB Carnegie: Thank you for the opportunity and congratulations with the good billing ratio this quarter. Naturally, I can start with this trade on. A competitor of yours was out with the Q2 results yesterday with some market comments about price pressure and cost pressure not necessarily matching. What is your take on those kind of statements about the Norwegian market at the moment?

Egel, CEO, Norconsult: At our first quarter presentation, we talked about the index adjustments this year being smaller than last year, meaning that our ability to adjust prices for multi year contracts was a bit less this year on average compared to last year. That is still valid and that has some impact on overall pricing. But when it comes to the pricing for new projects, we do not see a particular prices, so we do not recognize the same impact, which you referred to.

Simon, Analyst, DNB Carnegie: Thank you. And in terms of recruitment hiring of students in Q3, typically a big quarter on that. Your competitor again said they were holding a bit back. What is your approach in this Q3 result Q3?

Egel, CEO, Norconsult: This week, we are receiving approximately 200 new employees in our Norwegian operations. We will recruit plenty of new students, but we expect to recruit somewhat less than what we did last year.

Simon, Analyst, DNB Carnegie: Final question in this round. Also have ups in the transaction was done clearly at higher multiples than what has been in former M and As. And we’ve seen the last M and A deals going through has been a bit higher for a competitor as well. Is this price pressure upwards on M and A deals in the market? How do you assess the do the rationale about the least last valuations, especially on the multiple side in M and A and what you see in things that is moving in the market at the moment?

Egel, CEO, Norconsult: The pricing of M and A is completely dependent on the quality company and the situation the company is in. Sigma Civil was probably our cheapest acquisition ever. Osea Kupson in terms of multiplier was probably the most expensive. So they represent in many ways the full range of possibilities. And I don’t think I can say I’m aware of any company having the same consistency in terms of margins as Osaka Upson.

So that was a record high multiplier, which I don’t think I expect to see again. But what do you say, Doug?

Dag Flabbe, CFO, Norconsult: No, no, no. But I will say in general, the multiples has not changed in the market. So it depends on the company. Of course, smaller companies should have far less multiple. But in general, there is no change to our what we see.

Magnus Rasmussen, Analyst, SEB: Magnus, Rasmussen, SEB. Your closest competitor also yesterday were saying that they see some cost pressure on IT, for example. I see that your other OpEx is up just around 3%. Can you comment on how you’ve been able to keep costs that low and whether that will continue going forward?

Dag Flabbe, CFO, Norconsult: Yes. We work with cost efficiency all the time. Of course, it’s a balance when you have people as resources. IT cost is increasing. However, we also have some benefits when grow.

The other costs could be volatile, because it’s not straight twelve months cost level. So it could go up and down. But in general, are extremely focused on cost development. But it is a pressure on costs, because especially personnel costs and the salaries.

Magnus Rasmussen, Analyst, SEB: And for the Osia Jakobsen transaction, can you say something about transaction costs and also what we should expect in terms of increased amortization after the transaction?

Dag Flabbe, CFO, Norconsult: I can start with the amortization. The PPA is not ready yet, so it’s a little bit early. But in general amortization is 10% or less of the purchase price. But it depends to be seen when we have done the purchase price allocation. We have just owned it for fourteen days, so it’s a little bit early.

In terms of transaction cost, we haven’t guided on that, but that will be limited.

Magnus Rasmussen, Analyst, SEB: Thank you.

Analyst: One final question for me and that’s on the calendar day effect for the upcoming quarter. I think you put in SEK 11,000,000 in your chart deck with stable days working. Just explain a little bit about the mechanism. I understand that there are difference between areas and regions and geography. What’s driving the SEK 11,000,000 plus and what kind of assumptions needs to take that to be a negative number with stable working days year over year?

Dag Flabbe, CFO, Norconsult: Actually the working days is high level. So we calculate this on hours. So it’s actually slightly more hours in third quarter than it was third quarter last year. And that could be for example half day off in Sweden or whatever it is. So that is basic for the calculation.

So we said that it’s slightly more hours that is a positive effect of approximately SEK11 million.

Egel, CEO, Norconsult: I don’t see any further questions in the auditorium. So then do we have any online? We do. You’re listening to Chris Ossland from NOR Consult. First question from Jesper Sturgemo in Handelsbanken.

Jesper Sturgemo, Analyst, Handelsbanken: Do you expect to implement additional efficiency measures to drive the utilization higher? And could we see a billing ratio north of 75% in H2 and back on the actions already taken?

Egel, CEO, Norconsult: I can confirm that we will continue to take actions some places where we are not happy with the billing ratio and utilization. At the same time, we do not give any guidance in terms of future billing ratio or results. So all in all, I would like to say that we are pretty happy with the overall state of affairs. But in a large company like Nordconsult, there will always be pockets where we need to work more to make sure we have a sufficient order book and a sufficient utilization. So I can say to Jesper that we will continue working on this and then we will see.

But I would like to emphasize that again, I think the second quarter shows that when we have an issue, deal with it and we are able to improve fairly fast and we will continue to do that in the future.

Dag Flabbe, CFO, Norconsult: I would like to add also the seasonality. So it’s very important to look at the historical figures. Quarter three is low on billing ratio since we have new employees coming in. It’s always the lowest quarter and it will also be affected this year. So and also it’s when you look at the history, second quarter is normally higher than the other quarters.

Our long term target is still 74% on average, but we are not there yet, but we have been there for many years. So we are working towards that target.

Jesper Sturgemo, Analyst, Handelsbanken: Second question from Handelsbanken. We have already discussed a bit about Sweden, but like to have some additional flavor on Denmark. Jesper notes that we have a positive architect development in Denmark, still underlying EBITDA contribution lower year on year. Have you increased visibility that projects will pick up at an increased level in H2? Does not seen yet here in Q2.

So, a question about the performance in Denmark, architect especially.

Egel, CEO, Norconsult: Maybe I’ll start and then you continue. Actually, when you look at the information given by our CFO on Denmark, when you compensate for the calendar effect, the early lever penalty or the lever penalty as it’s called and the senior recruitments, the underlying result is actually improving. So we are pleased with the development in Denmark. We see a market situation in Denmark, which I think strong is the right word. So here, personally, expect to continue to see an improving underlying performance.

We will continue to develop the business and some of the costs I mentioned, for example, the senior recruitments and the lever penalties, they are a function of our growth efforts, both organically and in terms of acquisitions. So you may see some of those also in the future, but underlying the business in Denmark is doing very well.

Jesper Sturgemo, Analyst, Handelsbanken: That concludes our online questions.

Egel, CEO, Norconsult: Are there then any more questions in the auditorium? Doesn’t seem like it. Then I would like to thank all of you, both those of you here in Oslo and those of you who followed us online for participating. And we look forward to seeing you again at our third quarter presentation in November. Thank you very much.

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