Norconsult Stock

Good morning, everyone, and welcome to today's presentation of Norconsult's First Quarter Results. My name is Egil Hogna, I'm the CEO of the company, and I'm joined today by our CFO, Dag Fladby. After the presentation, we will take questions. We will start with questions from our audience here in the auditorium, and then we will move to questions from those of you following us by video link.

Norconsult is Norway's largest design and engineering company and one of the leading players in the Nordic region. We have approximately 7,200 employees divided by 140 offices. And we have a local strategy, but using our entire network in order to serve our customers.

We are well diversified with an exposure spread on 1/3 Buildings & Architecture, 1/3 Infrastructure and 1/3 Energy & Industry. More than half of our revenues are derived from public customers, while a bit less than half is from private customers. Every year, we have about 35,000 projects and 15,000 customers. And over time, this has secured a steady growth and stable margins.

In the first quarter of this year, we delivered a 14% net revenue increase to a bit more than NOK 3 billion. Adjusting for calendar effects, the organic growth was 7%. And in our business, it is necessary to adjust for calendar effects when you evaluate the underlying results because our costs during the quarter are constant, while the number of billable days is different depending on the calendar and depending on when vacations and holidays occur.

Our adjusted EBITA for the quarter was NOK 331 million. But when you add the calendar effect, it was NOK 397 million comparable to NOK 335 million. And that gives also an adjusted EBITA margin of 12.9% when you take into account the calendar effect.

Our order book remained approximately constant at NOK 7.6 billion. It is important to note that the very large win we had during the first quarter of the joint Arna-Stanghelle project is not included in this figure. That is classified as a frame agreement, but it is exclusive to Norconsult, and it is a very important foundation for our Infrastructure demand for a number of years to come and more about that project later on.

When it comes to people and organization, the number of employees increased by a bit more than 9% to, as I mentioned, approximately 7,200 compared to 6,583 1 year ago. An important organizational change happened in Denmark, where Jes Hansen took over as EVP for our Danish operations coming from Sweco in Denmark.

During the quarter, we also held for the fifth consecutive year, our Norconsult Awards where we celebrated our projects and the achievements of our staff in delivering outstanding projects and team performance to our customers. Norconsult Norway was also named a Career Company this year. It's the first time this award is used in Norway, and we were then nominated a Career Company like we have been for a number of years in Sweden, where this award has been handed out before.

Our emission reduction targets were also improved by the science-based target initiative, which verifies that we have both ambitious and well-planned targets for emission reductions over the coming years. In the first quarter of this year, markets were fairly stable. Buildings & Architecture remained a bit subdued in the private sector, but the public sector investments offset the somewhat weaker private market. So the overall activity was stable in that segment. The Infrastructure demand was good and stable, underpinned by the long-term public spending plans in the Nordic countries.

Energy & Industry was doing well. In particular, in energy, we are experiencing very strong demand, particularly when it comes to hydropower and power lines. And for industry, it was a bit more varied, but we have some particularly strong subsegments, out of which data centers and the defense industry are the most important ones.

When it comes to mergers and acquisitions, we are now almost completely integrated with the Aas-Jakobsen Group purchase. The main integration took place on the 1st of May, and we expect all of the training activities to be completed by the second quarter this year. We are very happy to have the Aas-Jakobsen Group well integrated into our operations and the cooperation with the Aas-Jakobsen Group team was one of the important reasons why we won the Arna-Stanghelle project.

Metier was also integrated during the first quarter, but Metier will continue as an independent company. They have contributed, in particular, very strong project management capability, which has enabled Norconsult to have a truly multidisciplinary expertise across all parts of building projects.

Smaller bolt-on acquisitions continue. During the quarter, we have acquired a 50% stake in Concrete Structures AS, which is a specialist in structural engineering of concrete and floating structures. This is a joint venture together with Aker Solutions , where we will cooperate on concrete structures going forward.

Then I'd like to give you some typical project examples of what we have won during the quarter. The first one is a complete replacement of the existing Tussa hydropower plant in Western Norway. This is a fairly typical hydropower investment these days, increasing the installed power capacity from 60 to 150 megawatts, which is essentially in order to compensate for the variability of wind and solar in both the Norwegian and the European energy system. Construction will start this year and is expected to continue for another approximately 3 years.

Another important win was the renewal of the frame agreement for BYGST or Bygningsstyrelsen in Denmark. They are managing public buildings in Denmark, and we won the frame agreement for the Jutland part. This is an important foundation for our building demand in Denmark going forward, both on the engineering and the architecture side.

Then another bridge example, the Alversund bridge. Also in the western parts of Norway. Needs to be replaced because it has exceeded its technical service life. And this 200-meter steel arch bridge will become another beautiful bridge on the Western Coast of Norway.

Then on to the most important win during this quarter, the joint project, Arna-Stanghelle. This is a project with an exclusive frame agreement up to NOK 2.2 billion. It is the largest engineering contract, which has been awarded ever in Norway and the largest which Norconsult has won. This project started with the first call-offs in the month of April this year. But as I mentioned previously, as it is a frame agreement, it is not included in our order book.

It is the largest tunneling project ever in Norway, and it is one of the largest ever done in Europe. It consists of approximately 80 kilometers of integrated road and rail tunnels, making it a real mega project. It also includes 2 new railway stations, evacuation tunnels, junction ramps and cross-cut tunnels. It has a number of innovations, including how to dispose of waste rock in a very efficient manner. It is a project which has come about both for efficiency and speed reasons, but the most important reason is the safety on the Western Coast -- on the western parts of Norway because this is a landslide prone area where the new tunneling system will be much safer for everyone using this road and rail system.

One of the important reasons why we won this project was our technological and digital expertise. And this project will be another pioneering project when it comes to using a fully digitalized environment using also artificial intelligence in order to increase the efficiency, productivity and quality of this project. It will have a common data environment for all of the data flows in this project. And having this common data environment enables efficient data sharing during all parts of the project, all phases, including the operations and maintenance after the project is finished.

A number of tools will be used in this common data environment using artificial intelligence in order to make sure we develop the project in the most efficient way to the benefit of our customers, Bane NOR and Statens vegvesen for this project. We will use artificial intelligence to improve the data flows and to make sure that we have the best solutions during the entire project.

Artificial intelligence does not only mean that we change our work processes and how we work. It also creates demand for our traditional services. Data centers are essential in order to be able to have an increased use of artificial intelligence because this requires a very high data processing capacity. And when we look at Europe, the bottleneck in the grid is redirecting data center investments to the north, not only Norway, but to all of the Nordic countries. And we see already a very high activity, and we expect more activity in the years to come associated with this. Another benefit is that the cold climate in the North enables very efficient cooling, which is important to have the lowest possible operating costs for these data centers.

In terms of demand for Norconsult, we deliver grid connection, substations and electrical engineering. We do permitting and environmental impact studies. We do the site civil water cooling, district heating operations. We plan the access infrastructure, and we also do the owners' engineer project and program management. This is an area with important operations and actual demand for us all ready. But during the coming years, the expectation is that this demand might actually increase by approximately 10x compared to the already connected capacity at the end of 2024. Exactly how much will be realized in the end depends on a number of factors, including, of course, the access to power. But this is a very important growth area for Norconsult going forward. And we have a large activity with existing customers, all ready.

And with that, I would like to give the word to our CFO, Dag Fladby, who will tell you more about the financial numbers. Thank you.

Thank you, Egil. Net revenue in first quarter ended at NOK 3 billion, up from NOK 2.6 billion the same quarter last year. The total growth was 14% and organic growth adjusted for the negative calendar effect of minus NOK 66 million was 7% in the quarter. The growth was driven by a higher number of employees, increased average billing rates and also improved billing ratios. The billing ratio continued to improve and ended at 72.7%, up from 71.5%.

Adjusted EBITA was NOK 331 million compared to NOK 335 million the same quarter last year. And the underlying margin was 12.9% compared with 12.7%. The slight improved margin was mainly due to increased billing rates and also improved billing ratios, partly mitigated by lower costs -- higher costs.

The adjusted EBITA in Aas-Jakobsen was lower than last year as billing ratio was also lower. That was partly due to significant work with integration. I will come back to that later in the presentation. Our net finance ended at minus NOK 40 million compared with plus NOK 3 million the same quarter last year. The main reason for the increase is increased interest rates from the loans related to the acquisitions of Aas-Jakobsen and Metier. In addition, we have an unrealized currency loss of minus NOK 11 million in this quarter.

We recognize that it's widespread amongst analysts on this item going forward. Hence, we guide on this one that the net finance, excluding any currency loss or gain, will be approximately minus NOK 20 million in the next quarters.

Profit after tax, NOK 194 million compared to NOK 257 million, with the main explanation is the calendar effects of minus NOK 66 million. The EPS was NOK 0.62 compared to NOK 0.85.

And then we are moving to the segments, and we start with Norway Head Office, as always. The net revenue ended at NOK 939 million, up from NOK 814 million. That is a total growth of 15%, whereby the organic growth was 7%. Aas-Jakobsen and the integration of Aas-Jakobsen Group has now been divided into 2 reporting segments, whereby Aas-Jakobsen Trondheim is reported on Norway region and the remaining part of Aas-Jakobsen is reported at Norway Head Office.

The net revenue from the remaining part of Aas-Jakobsen contributed to NOK 94 million in headquarter. EBITA, NOK 122 million compared with NOK 124 million, which gives an underlying margin of 14.9% compared with 15.2% in the same quarter last year. And as I mentioned, the EBITA in Aas-Jakobsen was negatively affected by lower billing ratio, partly due to significant time used for integration. The integration is estimated to have a revenue loss of approximately NOK 6 million for the total Aas-Jakobsen Group in this quarter.

The win of Arna-Stanghelle will improve the billing ratio going forward for this operation. And as Egil mentioned, the integration continues now into quarter 2 and will be finalized and completed at the end of quarter 2.

Then to Norway region, net revenue of NOK 818 million, up from NOK 788 million. The organic growth was 4%, driven by increased billing ratio and also improved billing rates. The billing ratio continued to improve versus the same quarter last year. EBITA in Norway region ended at NOK 85 million compared to NOK 107 million, which gives an underlying margin of 13% compared to 13.5% in the same quarter last year. The EBITA includes nonrecurring costs for relocation and also adjustment of workforce in total NOK 7 million.

Then to Sweden. Sweden had a net revenue of NOK 487 million compared with NOK 451 million. The organic growth was 7%, driven by increased FTEs and also improved billing ratio. The calendar effect was negative with NOK 15 million in the quarter, and that is linked to an adjustment of summer and winter work hours.

The adjusted EBITA, NOK 36 million compared with NOK 40 million, which leaves us with an underlying margin of 10.1% compared with 8.9% in the same quarter last year. The largest improvement this quarter is within the Infrastructure due to a higher number of FTEs and also increased billing ratios.

Then to Denmark, where our adjusted EBITA is NOK 12 million, down from NOK 17 million the same quarter last year. Adjusted EBITA margin, 6% versus 8.9%. The profitability is below our expectation in Denmark as we also reported in quarter 4. We have done several measures during the quarter, which is starting to give effect. We have also done adjustment on workforce of approximately 20 people, which will start to give effect in quarter 2 and in quarter 3.

Then to Renewable Energy, which continued strong with organic growth of 21%. The drivers behind the growth or the growth is mainly related to hydropower and transmission and other related businesses. EBITA was NOK 50 million, up from NOK 43 million, which leaves us with an underlying margin of 21.1% compared with 19.6%. The main explanation for the strong EBITA margin is continued high billing ratio and also stable high billing rates.

And then finally, on Consulting -- on the segments, we have the Consulting segments, which now consists of Technogarden, Digital and also Metier for the first time. Total revenue was NOK 472 million in the quarter, up from NOK 288 million, whereby Metier contributed with NOK 230 million. The EBITA was NOK 28 million compared with NOK 15 million the same quarter last year, which leaves us with a margin of 8.8% versus 8.1%.

Digital slightly improved their profitability, while Technogarden is still struggling in a tough market. We have continued to do measures in Technogarden during the quarter, and we have also done additional temporary layoffs in the beginning of quarter 2 and also adjustment of workforce to improve the profitability going forward.

Metier contributed with NOK 12 million, and that is including cost for severance pay, which was part of our integration plan for the Metier. The integration of Metier is completed during first quarter.

And now into cash flow. Cash flow from operation ended at NOK 189 million in the quarter compared with minus NOK 53 million in the same quarter last year. Last year included extraordinary -- not extraordinary, but then a payment for withholding tax related to the gift shares of NOK 160 million. So still an improvement this quarter.

Cash flow from investment activities, minus NOK 8 million compared with minus NOK 58 million in the same quarter last year. And the main explanation is that we have not paid out for any acquisition this quarter. Cash flow from financing activities, minus NOK 304 million versus minus NOK 102 million the same quarter last year, where the main difference is repayment of loans, one principal repayments of NOK 60 million, and we also decided to pay additional NOK 100 million for the repayment of the loans.

Then to our balance sheet, which is strong. I will just pick a few items. Cash and cash equivalents, NOK 1.41 billion end of the quarter compared with NOK 1.55 billion end of the year. We have net interest-bearing debt of NOK 281 million minus and a leverage of minus 0.27, excluding the IFRS 16.

Our net working capital is negative with minus NOK 165 million. And compared with the same quarter last year, we had plus NOK 127 million.

And finally, from my side, the order book, as Egil mentioned in the beginning, is NOK 7.6 billion. It's more or less stable from quarter 4 at the end of quarter 4. And the order intake in this quarter has been a mixture of small and medium contracts and also call-offs from existing framework agreements. And as Egil also mentioned, Arna-Stanghelle is not included in the order book. It will be included when we have call-offs and that will happen in quarter 2.

And by that, Egil, I leave the word to you.

Thank you, Dag. So then a few closing remarks and the outlook for the coming quarter. Overall, we expect the market to remain stable. However, we are seeing an increased uncertainty related to the international political situation. And that, of course, may affect the macroeconomic environment also in the Nordic countries. During previous quarters, we have seen a number of signs of improvement in the private market for Buildings & Architecture.

In Norway, we have recently seen a small interest rate increase, and there is a risk that this may temper some of the positive signs we have seen during the last quarter. But so far in the first quarter, we did experience a stable demand in this area, but we will see how that develops now in the second quarter. The public demand, however, in this segment is still stable, and we expect that to remain solid going forward.

Demand in Infrastructure is good. We have talked about a number of important projects we have won, most importantly, the joint Arna-Stanghelle project, which does create a solid foundation for our Infrastructure activity for the coming quarters and years.

When it comes to energy, we continue to see a strong level, and we expect this to continue to increase during the quarters going forward because the importance of energy security has become even more obvious during recent months.

In other industry segments, we continue to see some variability. But all in all, the demand in this segment, we expect to continue to be good going forward. And most importantly, in Norconsult, the flexibility to use our technical disciplines across different market segments is really important to us. We will continue to strengthen that flexibility, and we will take necessary measures when we need to adjust capacity to demand also going forward.

With that, I would like to thank you for following this presentation, and we now move to questions. And we will then start to hear if we have any questions from the audience here in the auditorium.

Herman Caspersen from ABG. On your change of outlook wording in the Building & Architecture segment, you also mentioned that the increased geopolitical uncertainty may temper the improvements seen over the last quarters. Is that only something you anticipate? Or have you already started to experience that?

No, we haven't really experienced that at this stage, but we know from experience that when the interest rate increases, then it may have a delaying or postponing effect in that particular segment.

Of course, you mentioned the Arna-Stanghelle agreement, which is very big. But based on comments from industry peers as well, there seems to be a trend of a larger share of so-called framework agreements in the total pipeline. How do you experience that situation in more general?

I think that is a fair statement that there is indeed a higher share of frame agreements right now. This is partly linked to the fact that we see more projects linked to refurbishing, rehabilitation, better maintenance than in the past, and those type of activities are often contracted with frame agreements rather than specific assignments.

And this quarter, you delivered a negative net recruitment of employees. Could you provide any more color on what drives that? Is that temporary for this quarter? Yes, what's the strategy driving that?

Yes. So when you say negative, it's actually more or less stable. It's approximately 0. And the first quarter is typically a quarter when we do not do a lot of recruitment because our main recruitment quarter is the third quarter because that is when graduates typically have finished their university education.

We expect to see a net growth during this year. During the first quarter, we have adjusted our capacity a few cases. So we have both. seen recruitment and some demanding during the quarter, resulting in a stable workforce during the quarter. But for the year in total, we would expect to see an increase based on already entered contracts, employment contracts with students finishing their education this year.

And finally for me, on the ERP costs, given the total amount that you guide for, they are quite low this quarter. Anything new on how we should think about phasing of ERP costs during the year?

Yes. The ERP project started beginning of February, so it's not a full month really. I think we should have the same phasing as we have communicated. Most of the costs will be in 2026. Rough estimate, quarter 2, maybe around NOK 30 million, but it depends on the activity level in the project.

Are there any more questions from the auditorium? Then I think we will move to questions online. So Christian, have you gotten any questions?

Good morning. We have quite a bit of questions online this morning. Starting with Nordea. What is the expected normalized margin contribution from Aas-Jakobsen and Metier once fully integrated? And what would the billing ratio have been approximately this quarter, assuming normal run rates for Aas-Jakobsen?

That was a fairly detailed and complex question. So I think I'll refer to our CFO on that one.

I will start with Metier. We -- when we published the deal, we had -- we also presented the adjusted EBITA. Now we have done the integration activity in quarter 1, where we have NOK 12 million, including, you can say, part of integration cost or severance pay as part of the integration. So I guess we haven't guided any similar margin of Metier going forward than we presented at the deal.

When it comes to Aas-Jakobsen, as we communicated there, we have had some lower billing ratio, partly due to integration activity, but also partly due to low order book before the integration. That will improve now when we have done the integration and start with Arna-Stanghelle. So we expect, you can say, going forward, not in the first quarter, but on the longer term that, that will be more or less on the same level as similar divisions and departments as Norconsult as Aas-Jakobsen was when we acquired it.

Thank you. A second question following up on the framework agreements. What is the total value and the volume of signed framework agreements not captured in the reported backlog?

Yes, that we don't report on actually. So we don't have any details on that.

Moving on. We have some questions from SEB. Just negative [indiscernible] other adjusted EBITA this quarter versus minus NOK 10 million last year and minus NOK 29 million last quarter. Anything special driving the variations on the other adjusted EBITA?

As we mentioned last quarter, that depends on the activity level. We allocate costs into the segments based on, you can say, a fixed monthly level. And the activity level on, you can say, group is dependent on different seasonality. So it's not any specific for the year.

And the second question, when can we expect Aas-Jakobsen and Metier to deliver growth in EBITA year-over-year?

Maybe I could answer to that because one of the most important effects and synergies we have experienced with historical acquisitions is the fact that they generate more demand also for other Norconsult services. So we expect to see that the entire Norconsult system will benefit from these 2 acquisitions.

For example, the Aas-Jakobsen Group acquisition triggers a demand and the recruiting need for some other technical disciplines to complement the construction expertise in the Aas-Jakobsen Group. So we expect to see these benefits partly during this year and then consequently in the following years. And the same logic applies for Metier because we do see that the project management expertise, for example, in Metier is something which is very complementary to the services in Norconsult relating to engineering and architecture, for example. So it should increase our total sales and demand.

Thank you. Moving along to DNB Carnegie. You now guide for net finance of around minus NOK 20 million in the coming quarters. Should investors view this as a new underlying run rate for finance cost post acquisitions? Or do you still expect a meaningful normalization lower from current levels over time?

In the next quarters, our guiding is minus NOK 20 million. That will -- excluding FX gains and losses. That will be lower when we pay down our, you can say, external debt related to the acquisitions. But in the next quarters, it will be around NOK 20 million minus.

Moving along to Handelsbanken. Of the 7% organic growth, could you quantify how much is price, how much is volume and how much is improved utilization?

We don't guide or report on details on it. Obviously, it's a mixture of everything since our billing ratio has improved by 1.2%. The billing rates also increases -- also increased, while the number of FTEs organically is, you can say, more or less around 2%. So it's a mixture of all.

Still some negative impact from Aas-Jakobsen integration. Do you expect to be on a more normalized level on utilization from Q2? Or could it take -- or spill into Q3?

The last integration activities are taking place right now in the month of May. So that means that we do expect some reduced billing ratio also in the second quarter, but we expect a normalized billing ratio in the third quarter.

And Handelsbanken also noticed that a strong margin in Sweden if adjusted for SEK 15 million, but is Sigma Civil still a drag on margin? Or should we expect a lift in 2026 from cost synergies?

Sigma Civil is now performing on a normalized level as from the fourth quarter last year. So they are not dragging the margin. We have taken out the cost synergies from Sigma Civil. We did that in 2025. So now it's business as normal in Sweden.

And that concludes our online questions.

Okay. Then I would like to thank again everyone who has followed both this presentation and the Q&A session, and we look forward to seeing you again at the second quarter presentation. Thank you very much.

Thank you.

Good morning, and welcome to Norconsult's Fourth Quarter Presentation for the year 2025. My name is Egil Hogna, I'm the CEO of the company, and I will share today's presentation with our CFO, Dag Fladby. After the presentation, we will take questions live here in the auditorium in Oslo first, and then we will take questions we have received through the chat of the webcast. If you're following the webcast, feel free to enter your questions along the presentation, and we will then revert to them later.

The fourth quarter of 2025 was another quarter of solid organic growth and stable profitability. But before we delve into the results, let me say a few words about Norconsult's business model.

At the end of last year, we had more than 7,200 employees divided on 140 offices. We have approximately 1/3 of our activity in Buildings and Architecture, 1/3 in Infrastructure and 1/3 in Energy & Industry. We are well diversified with approximately 35,000 projects split on 15,000 customers. And with this diversification and solid business model, we have shown a steady growth and a stable profitability over the last decade.

During the fourth quarter, we showed a net revenue increase of approximately 12%, reaching NOK 2.8 billion. 6% of the growth was organic adjusted for calendar effects, meaning that the other 6% were linked to our acquisitions. And during the year 2025, we made 3 acquisitions, 1 in Sweden, Sigma Civil and 2 in Norway, the Aas-Jakobsen Group and Metier.

Our adjusted EBITA reached NOK 252 million, up 11% from NOK 227 million the same quarter the year before. Our adjusted EBITA margin reached 9.2% adjusted for calendar effects, a slight improvement from the year before.

And our fourth quarter cash flow reached NOK 884 million, which is a very strong cash flow. Typically, we have a strong cash flow at the end of the year. It was slightly lower than last year due to a special effect last year.

During the quarter, we also completed the acquisition of our most recent acquisition, the Metier Group, but it is not included in the numbers as the inclusion financially happened on the 31st of December last year.

And finally, the Board of Directors of the company proposed a dividend per share of NOK 1.80 -- that corresponds to a dividend payout ratio of 86%, well above our dividend policy of more than 50% across the cycle.

Let me then say a few words about our organization and people because in Norconsult, the people are the most important, and we often say that they are not the most important. They are really the only thing which is important because we are a company where the intellectual capital of the people is really what the company is all about.

The number of employees increased during the year by approximately 12%, reaching 7,239.

FTEs increased with approximately the same amount, 11.7% and our sick leave remained stable at 4%.

Employee churn also remained quite stable at 10.6%, well below the average of our Nordic peer group.

In terms of organizational news, I mentioned that we did the acquisition and the integration of the Metier Group. The Metier Group is a Norwegian consulting company specializing in project management. Approximately 70% of their business is in the construction industry, exactly our industry. And in addition to project management, they are strong in early phase consulting for building projects and in digitalization.

Their work on digitalization strategy complements very well our expertise in Norconsult Digital. And finally, we were again nominated as Norway's most attractive employer in our industry for young professionals, where we received the Universum Professional Award for the sixth consecutive year at the top position of the consulting engineer industry in Norway.

Then a few comments about the market. And when we look at the overall market, there are no substantial changes in the fourth quarter of last year compared to the quarter before.

In the private Buildings & Architecture market, we saw a fairly stable and somewhat subdued market. However, Norconsult has performed well in this market, and we hired in our Norwegian architecture subsidiary, Nordic Office of Architecture, approximately 15 architects during the second half of last year. This is contrary to what we see most of the competition is doing, where there is still demanding going on in this part of the industry.

Public sector investments, including Buildings & Architecture linked to defense, continue to offset a still fairly weak private sector.

When it comes to infrastructure, this is a stable market, and it is consistent with the long-term public spending plans. We have made a number of wins during the quarter, but the most important wins we have made in the first quarter of this year, and I'll revert to that during the outlook statement at the end of this presentation.

Energy & Industry is a market where on the energy side, it is very positive. We are currently detailed engineering 5 hydropower projects, which is the highest activity level in this industry since the '80s.

Power transmission projects also remain very strong, and this is an area where the outlook is also very good, linked to both electrification and the importance of rebalancing the energy production when we see the introduction of more unstable sources like solar and wind.

For industry, the activity is somewhat different in different subsegments. Defense industry is the strongest one. while some of the green industry is weaker than it was earlier.

Then I'd like to talk a little bit about artificial intelligence because this is both one of the questions we receive quite a bit from our analysts and investors, but it is also something which is representing a very important opportunity for Norconsult, where we see the demand for our services increasing quite sharply.

Over the last 2 decades, Norconsult has developed a strong expertise in digitalization. This is something which has enabled our customers to increase the quality of the plans and the engineering, the calculations before the construction, the physical construction starts in the construction project. However, digitalization is also a critical enabler in order to use artificial intelligence in construction projects.

You cannot use artificial intelligence if you do not have the digitalization expertise and the ability to digitalize. So the promise of benefits from artificial intelligence is something which increases the demand for our expertise in digitalization. We have digitalization and artificial intelligence expertise in a number of subsidiaries of Norconsult.

In Norconsult Digital, we have both software products with artificial intelligence and consultants with artificial intelligence expertise. This is where we, for example, have our center for Vibe coding, where we have IT consultants who are experts in using normal English in a special way in order to produce digital code. This increases the effectiveness and efficiency of our coding and enables us to also solve problems and to perform operations, which previously were not possible with normal coding.

In Aas-Jakobsen, we have expertise linked to special solutions in the infrastructure part based on artificial intelligence. I mentioned Metier where we have AI strategy expertise. And finally, we have Pure Logic working with AI in order to do optimization. And in the rest of Norconsult, we also apply artificial intelligence to solve all of our different projects.

We develop our own artificial intelligence tools. We implement AI tools in existing software portfolio, for example, the ISY software suite, where now roughly half of our products include artificial intelligence as part of the offering to our customers. And then we use tools developed by others and in cooperation with our technology suppliers. I will soon show you an example of how we do this with Autodesk, but we also use tools from Microsoft and OpenAI in order to serve and perform our projects in the best possible way.

What we see is enabling and using AI functionality is something which our customers increasingly is asking for. When we do a project, our customers would like the projects to be AI-enabled and to use AI in order to achieve benefits and quality, which might not have been possible previously. So for us, this is representing an important opportunity for additional sales on top of what we previously have been producing.

Our ambition is to shape the future of the Nordic construction industry by applying artificial intelligence across architecture, planning and engineering disciplines.

Last month, we were approached by Autodesk, one of our suppliers of technological tools, and they asked us if we would be willing to create a video together with them, which they could use for their investors in order to show how their tools are used together with one of their customers, in this case, us, in order to solve very complicated technical challenges.

Autodesk is a U.S. software company with a market cap of approximately USD 50 billion. And I would like to show you the video which was made by Autodesk, we have permission to show where you will meet both employees of Norconsult and employees of Bane NOR which is our customer for solving the very complex most station project.

[Presentation]

So one abbreviation mentioned here was MCP, Model Context Protocol. That is a little bit like a USB port, allowing us to use artificial intelligence tool and very easily connect them to our own proprietary data and own models in order to help applying AI in a very efficient way on our proprietary data, which is important in projects like this.

If you're interested in learning more about how we work with digitalization and AI with Autodesk, I recommend you to have a look at their website where you'll find a large number of examples where they have used Norconsult as examples for leading digital expertise.

Then I'd like to show you some recent project examples. And here, we have an illustration of one of our Swedish projects, which is called BECCUS or Stockholm Exergi. This is a carbon capture and storage project in Stockholm based on bioenergy. So it is one of the negative carbon projects where carbon is captured and later transported to the North Sea.

Another project which we -- or a project which we got in the fourth quarter, a fairly typical one is a new road close to Göteborg, the so-called Skulltorp Link in Partille, where we are designing a new road reducing the traffic jams between Göteborg and the Landvetter Airport.

Another project, in this case, also for Bane NOR, but this time, the property part is designing a new workshop in Trondheim for the new and longer trains, which are now coming in use.

Furthermore, a road in Northern Norway, where there have been a number of stones falling from the mountain and the challenges associated with that, where there is a project with quite a bit of tunneling and other protection to make it both a safer and a faster road.

And the final example before I give the word to our CFO is a new pumped storage power plant called Illvatn, where Norsk Hydro is the customer. This is another example of how we work with customers in order to build and change hydropower plants, creating more power, allowing to compensate for the variability of wind and solar, ensuring both stable power supply and being able to use the high power prices when there is a shortage of wind and solar in the European power system.

So with that, I would like to give the word to our CFO, Dag Fladby. Thank you.

Thank you,. Our net revenue for fourth quarter in the year was NOK 2.8 billion, up from NOK 2.5 billion in the same quarter last year. The calendar effect in the quarter was limited with minus NOK 5 million.

The total growth in the quarter was 12%, while the organic growth was 6%, driven by increased FTEs and also increased average billing rates and improved billing ratio. Our billing ratio increased -- our billing ratio increased another quarter and ended at 73.3%, up from 72.2%.

EBITA was NOK 252 million, up from NOK 227 million in the same quarter last year. EBITA adjusted margin was 9.2%, more or less at the same level as last year. The EBITA in Aas-Jakobsen, was lower than last year, and that is mainly due to lower billable activity, partly affected by integration work in fourth quarter.

I would also like to point out that when we acquire companies, normally, the results for the following year will be reduced due to significant integration activities taken from billable hours. As these companies has limited administration resources, that also affects the profitability.

Amortization was NOK 26 million this quarter, up from NOK 10 million. That is mainly due to amortization of intangible assets in Aas-Jakobsen as guided in fourth quarter, while profit after tax was NOK 149 million, down from NOK 203 million.

And keep in mind that the fourth quarter last year was affected by a positive tax effect related to gift shares of NOK 50 million.

Then a quick look at the full year, where we had a net revenue of NOK 10.1 billion, up from NOK 9.2 billion. The increase was 10%, while organic growth was 6% adjusted for the calendar effect, which was negative with minus NOK 16 million.

The organic growth was driven by higher FTEs, increased billing rates and also improved billing ratio. Our billing ratio has increased now for 3 quarters and ended at 73.0%, up from 72.5%. And we will continue to do measures in order to improve that going forward. EBITA was NOK 944 million, up from NOK 879 million and the underlying margin, 9.5%, more or less at same level as last year.

Lower rate increases, mainly due to lower index regulation in addition to cost increases was partly mitigated by improved billing ratio and also cost efficiency measures.

Amortization, NOK 55 million, up from NOK 24 million. That is mainly due to amortization of intangible assets for Aas-Jakobsen Group, which we acquired second half of 2025.

While profit after tax, NOK 652 million, up from NOK 498 million, which leaves us with an EPS of NOK 2.13 per share, an increase of 24%.

Then moving into the segments, and we will, as always, start with Norway Head Office to the left. The net revenue ended at NOK 899 million, up from NOK 758 million. This is an increase of 19%. The organic growth was 4% in the quarter.

EBITA, NOK 101 million, up from NOK 83 million, while the EBITA margin was 11.3% compared with 11.0% in the same quarter last year. Aas-Jakobsen, is contributing by NOK 15 million, including provisions for stay-on bonuses.

And as mentioned, Aas-Jakobsen Group had an EBITA, which was lower than last year, mainly due to lower billable activity, which was partly affected by significant integration activities in fourth quarter.

In addition to that, the order intake in Aas-Jakobsen, the last quarters have been slower than normal. However, we have won many infrastructure projects now in the beginning of the year. And as Egil shortly mentioned, we had a huge win on Tuesday, which we released on the stock exchange with Arna-Stanghelle. Egil will come back to that. This gives us comfort that utilization and billing ratio will improve going forward.

The integration of Aas-Jakobsen, will continue in quarter 1 and also quarter 2, and it will be completed before summer.

For the full year, Norway head office had an increase of 13%. Organic growth was 6%, and we had another stable year in terms of margin of around 12%.

Then moving to Norway region, where we had net revenue was NOK 767 million, up from NOK 721 million.

Organic growth was 7%, driven by improved billing ratio and also higher billing rates. The EBITA was NOK 72 million, up from NOK 41 million and the underlying margin, 9.5%, up from 5.7%.

For the full year, order increase in the margin is due to improved billing ratio, mainly due to measures we have taken in the previous quarters.

For the full year, Norway region really stepped up in terms of organic growth, 8% in 2025 compared with 2024 and a solid improvement in margin, ending at 10%, up from 8.4% a solid development in Norway region.

Then moving to Sweden. Sweden had a net revenue of NOK 539 million in the quarter, up from NOK 442 million, 22% increase, while organic growth was 11%. That is driven by higher number of FTEs and also improved billing ratio.

The EBITA was NOK 59 million, up from NOK 55 million in the same quarter last year. And we are looking at the divisions in Sweden, they are more or less on the same level as last year.

Sigma Civil, the turnaround case, contributed positively for the first quarter with NOK 1 million.

For the total year, Sweden had a strong growth in a tough market, 8% organic growth, slightly lower margins at 6.6% versus 8.0%, which is partly affected by the Sigma Civil turnaround, which had a negative effect of NOK 9 million in 2025.

Then to Denmark. And Denmark, they have a profitability this quarter, which is not according to our expectations. The EBITA was NOK 8 million in the quarter, down from NOK 22 million. That is mainly due to lower billing ratio and also weak performance in the geotechnical units in Denmark.

In addition to that, we have additional costs for earn-out and also increased costs for the strategic initiative to secure long-term growth on the architectural part of the business, totally NOK 5 million.

We have taken measures to improve the profitability. We have terminated approximately 20 employees in December and in January. We will take further measures if needed going forward.

Then to Renewable Energies, which continued with organic -- strong organic growth, mainly driven by hydropower and transmission and other Norwegian business units.

The growth is driven by higher billing rates and also increased FTEs.

The EBITA margin was continuing strong at 14.9%, slightly down from quarter -- same quarter last year.

For the full year, we had another strong year in renewable energy, strong organic growth and also stable strong margins at around 16%.

And then finally, for the reporting segment, we have renamed one of the reporting segments to Consulting segments. That includes Digital, Technogarden and also the Metier Group.

The Metier Group was included as from end of December 2025. So the P&L effect is 0, while it's included in the balance sheet.

So the net revenue for the quarter was negative with 3%, mainly due to lower activity in Technogarden. EBITA ended at NOK 6 million, down from NOK 8 million. We are not satisfied with the profitability, especially in Technogarden and also the Swedish operation.

Further measures will be taken going forward. Then to our cash flow. And our cash flow from operating activities ended at NOK 884 million in fourth quarter, slightly down from last year, where we had NOK 938 million.

However, it's important to notice that last year was -- had a positive effect of NOK 160 million related to withholding tax from the gift shares. Cash flow from investment activities, NOK 425 million versus minus NOK 48 million, mainly due to payment -- net payment for the Metier acquisition of around NOK 400 million.

And cash flow from financing activities was also affected by the acquisition where we took on a NOK 400 million term loan. So it ended positive with NOK 279 million. The cash flow from operation and cash conversion for the full year is around 130%, which we are satisfied with.

Then to our balance sheet. We have a strong balance sheet, and the balance sheet has changed quite much during the year. We have cash and cash and cash equivalents of NOK 1.55 billion.

Last year -- ending last year of 2024, it was NOK 1.6 billion. The goodwill is -- and intangible assets is around NOK 3.2 billion, which has increased since end of 2024 with approximately NOK 2 billion. That is mainly due to the acquisitions of Aas-Jakobsen Group and Metier.

Our net working capital was negative with minus NOK 337 million.

Net debt, excluding the IFRS, minus NOK 260 million, and we have a leverage of minus 0.25x, excluding the IFRS. So solid balance sheet.

And then to the Board's proposal on dividend, we have a dividend policy saying that we should pay out more than 50% of the net results yearly. The last years, we have paid out in average above 60%. And based on a solid balance sheet and also strong cash flow, the Board's proposal is to pay out NOK 1.80 per share for dividend for 2025. That is a payout ratio of 86%.

In the Capital Markets Day, we commented that we need to change our ERP system in Norway. And in fourth quarter, we have done an extensive planning phase where we have looked at scoping, evaluated risk cost estimation and, of course, detailed planning. That the cost for this is booked as adjustment of NOK 18 million. We have taken a decision now to implement ERP system and expected go-live is end of quarter 4 2026.

The total cost frame for this project is around NOK 200 million, and the project is estimated to complete in quarter 2 2027.

In line with the IFRS regulation, the cost for the ERP projects are treated as operational expenses. We have decided that we will adjust these from adjusted EBITA in order to better show the underlying operational performance.

And finally, from my side, a few words about the order book. The order book increased to NOK 7.7 billion, up from NOK 7.4 billion. It includes the order book of Metier and the order intake in the quarter has been a good mix of small and medium contracts, which gives a solid foundation for 2026.

And by that, Egil, I leave the word to you.

So let's talk about the outlook, which is an interesting one this time because the overall market is expected to be quite stable, but there has been some recent developments for Norconsult, which is important and an important part of the outlook.

Before we come to Norconsult situation, let me talk a little bit about the general market. There is significant uncertainty, I think, of course, linked to the international political situation. And we see, in particular, industry, our industry segment being affected by this with positive impacts relating to the defense industry, but for some export-oriented industries, this is, to a certain extent, negative because some are affected by tariffs.

The private market for Buildings & Architecture is still slow, but there are signs of optimism in the larger cities. I mentioned that we have been hiring and we are hiring architects in the Oslo area. But there are also other parts of Buildings & Architecture, which are weaker. It is now, for example, a bit weaker in Denmark, which our CFO talked about. But at the same time, there seems to be a large number of offers being asked by builders and investors, and that is often an early sign of optimism.

The total infrastructure market is expected to be stable going forward. But this is the area where there have been recent events, which are really important for the outlook for Norconsult. Actually, over the last week, we have been awarded 4 important contracts, important expansions of the Lillestrøm and Sandvika station close to Oslo, a large project close to Hamar, a double track crossing at Åkersvika where there are important both nature considerations and again, a challenge with clay, which is one of the specialties of Norconsult. But the most important win we have had is the so-called Arna-Stanghelle project close to Bergen in the western parts of Norway. This is a contract we have worked on for more than a year in order to win. It is the largest ever technical consulting contract awarded in Norway.

Normally, we say that a contract of NOK 100 million to NOK 200 million is a very large contract. This contract is more than 10x as big. It is NOK 2.2 billion. It is designed as a so-called framework agreement. It is 4 years of mandatory length and then 4 additional optional years, so in total, 8-year program. It is a contract which we have won together with Aas-Jakobsen. And it, in many ways, proves how strong we are together with Aas-Jakobsen when it comes to complex infrastructure projects. It also means that we will be able to continue to grow this business because even if we have the capabilities internally, it means that our total demand for this part of our business is going to increase more than it otherwise would have in this area of Norconsult.

So with this win, we have a very solid foundation for the further growth in infrastructure going forward, and it is an incredibly important reference. If I can just make one example. This single project has in total, 80 kilometers, 80 kilometers of various tunnels. That is more than the combined length of tunnels in the entire remaining portfolio of Statens vegvese, and they have approximately 30 projects. And this single project has more than the other projects have of tunnels in total. So it is of tremendous importance for Norconsult.

When it comes to the energy sector, we continue to expect a high level of activity. And as I mentioned previously, still a mixed bag for the other industry markets. All in all, we think that the quarter which has passed has been a good one. We are happy with the performance, but we are not satisfied. We will never be completely satisfied. But as our CFO has talked about, we are doing measures in some parts of the business.

Denmark and Technogarden are the 2 main examples, and we will continue to work to ensure we have the right efficiency and billing ratio across the company. And that will mean a combination of hiring and adjusting of capacity with reductions when that is necessary. But all in all, especially considering our most recent wins, this is a positive outlook going forward for Norconsult.

So with that, we will move on to your questions, and we will start with questions in the auditorium before we take questions received in the chat.

Magnus Rasmussen, SEB. Just wondering if you can touch upon your unallocated EBITDA because that's worsened by NOK 13 million year-on-year. And in Q3, it was positive NOK 11 million year-on-year. And before that, it was stable every quarter more or less. So just wondering if there is some reallocation of cost between quarters or what's going on there?

Yes. It's -- does this work? Yes. It's -- as we mentioned also in quarter 3, it depends on the activity level. It could be that we have some activities in, for example, third quarter, it was less than fourth quarter. So you can say the activity -- different activity levels if we run a project, not engineering project, but the administrative or development program, it could have some effect. Smaller adjustment on allocation could have an effect, but year-on-year, it's -- but the total year is no major things.

And a question on Aas-Jakobsen, as well. Just wondering how much or if any, it has impacted the billing ratio year-on-year? And also how much lower EBITA did Aas-Jakobsen, have year-on-year --

The billing ratio in fourth quarter was affected by 0.1. So 73.3% without Aas-Jakobsen would be 73.2%. Versus last year, it's more or less pro forma figures because they were on Norwegian GAAP and so on. But I will say it's approximately NOK 10 million in difference. And keep in mind now that we have also done quite much integration work in fourth quarter, estimated to a cost of -- or loss of billable hours of around NOK 6 million.

I would like to add one comment relating to Aas-Jakobsen. Something which is relevant for the Aas-Jakobsen, integration as well as nearly all Norconsult integrations is that when we do integration, the companies we acquire, they typically do not have administrative support personnel to do integration. So as a consequence of that, what we do is that we need to take some of the people who otherwise would invoice to customers to work on integration activities.

During the integration phase, this reduces the billing ratio of the companies we acquire, and it means that revenues are smaller than they otherwise would be. So we see this effect both with Aas-Jakobsen as we have seen for nearly all of the acquisitions we have made, and this takes a certain time. And in the case of Aas-Jakobsen, we saw this in the fourth quarter. And as our CFO mentioned, we expect to see this both in the first quarter and partly in the second quarter this year as well.

After the second quarter, we expect the billing ratio to be at the same level or better compared to what it has been historically.

And again, with the win of Arna-Stanghelle, we have a demand picture for Aas-Jakobsen, which looks very good.

Can you say a bit about the Arna-Stanghelle project in terms of when does this start to affect you? How many people are we talking working on this projects? I understand it will vary over time, of course, but let's say, within '26.

Yes. And it will vary. I will not give a number exactly, but it will be several hundred people working on it. We expect it to start very quickly. The so-called -- what is it called --

Standstill.

-- standstill period ends at the end of the coming week. We then expect signing early the week after, and we expect a start more or less immediately.

And one final question, if I may, on the ERP system. Can you just elaborate a bit on why you are doing this? Do you just have to do it? Is the old system not working anymore? Are you expecting some cost benefits with the new system, et cetera?

Yes. We are forced to do it because our ERP programs in Norway do not have support from 2027. So this is nothing we just do to modernize. We expect, of course, to integrate the ERP system is demanding. And of course, that's why we also have done a really thorough planning phase. We expect synergies going forward when we are up and running and have stabilized. Obviously, that will take some time, but we expect this to -- the provider is in the forefront of using AI. We expect our, you can say, operation to be smoother, but not for 2027. It will take some time before we see the synergies, maybe late '27. But -- but obviously, in the future, this will give benefits.

[Technical Difficulty] I have 2 questions, I think. First is related to the order backlog. If I compare 1 year ago, it was around NOK 6.4 billion, I think, now it's NOK 7.7 billion. How much of that is acquired and how much is organic change? And then the second question would also be related to ERP. Is the cost incurred in the fourth quarter included in the NOK 200 million? That's one question. And the second question, would it be a linear booking until the second quarter 2027? Or would it fluctuate according with activity on the implementation phase?

Yes. We can start with the order book. In the order book, we have included Metier that is just below NOK 600 million. So part that is acquired, of course. For the Aas-Jakobsen, we had the order book included of around NOK 300 million in quarter 3, but that has been reduced during the quarter. As I mentioned, it had been slower order intake. So all in all, maybe NOK 700 million is acquired and then the remaining is organic.

On the ERP, the NOK 18 million is included in the NOK 200 million. You are right that it will depend on the activity level. But I will say that most of the NOK 200 million will be in 2026. So I will not say linear over quarters because it depends on the activity. But roughly speaking, you can calculate with that, but most likely slightly more in quarter 2 and quarter 3. But most of it in 2026.

Bengt Jonassen from ABG. Several other consultancy firms are citing pressure on hourly rate growth as a key headwind. How do you experience that situation?

We always experience tough competition, but we cannot really say that the situation this year or this quarter is particularly different from what it normally is. We see some segments where the competition is maybe particularly strong because of reduced demand. And I would like to highlight private Buildings & Architecture as one such segment, where there are other segments where the expertise required in order to perform the operations is so scarce that the hourly rates are very attractive.

And just to give one example of that, and you can read that out of our figures, the energy segment is one such area where Norconsult has quite unique expertise. Another area is infrastructure where we are also having a number of areas of expertise, which means that the competition and pressure on rates is less.

Are there any more questions in the auditorium? I don't see any hands. So then we will turn to the web. And have we received any questions online, Christian?

We have. You're listening to the voice of Chris Aasland, Norconsult IR. First question from Nordea. Could you say something about the underlying EBITA margin adjusted for weaker contribution/integration effects from Jacobsen?

Yes. As I mentioned, you can say the calculated loss of revenue is around NOK 6 million in the quarter. And that's the only effect on the integration part for Aas-Jakobsen.

Follow-up. How do you expect the margin to be affected by the Metier acquisition going forward given the current run rate?

The margin in Metier Group was slightly higher than Norconsult historically. However, it's not affecting the total margin for the group that much because it's minor -- not minor, but it's less weighted in the total. So I don't expect that to actually affect the group's margin.

Then we have a follow-up on Denmark. Can you please remind us when the earn-out is finished?

End of quarter 2, 2026, and I could add that the estimated cost for the earn-out the first half is NOK 5 million.

Moving along from our friends in DNB, outlook and regional mix margin implications. You described the overall markets as stable, but with continued weakness in private Buildings & Architecture and some need for regional adjustments, particularly in Denmark in parts of Technogarden. How should we think about the margin impact from this mix shift?

Well, the margin impact should be a positive one. I would like to refer to the example of Regions Norway, where we, during 2025, first half of that year, we were quite explicit that we were not satisfied with the performance and that we were taking measures. They are now delivering 10% margin. And as you probably know, that is also our target for Norconsult across the cycle. And the business areas which do not deliver those kind of margins, we are working very hard with to improve to ensure those kind of margins. Exactly when we will achieve that is always difficult to take, but we take proportional measures in order to achieve that target.

With several new infrastructure contracts announced year-to-date, how strong is the current infra pipeline? And how do these new awards translate into margin outlook? Can we expect stronger infrastructure and energy activity to continue to offset potential margin pressure through 2026?

Well, with the recent Arna-Stanghelle win, which is the largest award made in Norway, I think it's fair to say that our infrastructure pipeline is the strongest we've had. I usually say not ever, but rather so far, but this is a fairly unique and very important contract. So you may recall that we have talked a lot about also flexibility in Norconsult between different parts of the business. And whenever necessary and possible, we shift people between the areas using, for example, their expertise in construction where the demand is the strongest one.

So you should then expect that this is something which will support all of our activity that we have this strong pipeline going forward.

And for our final question from Handelsbanken. Could you please describe price and ability to increase them in comparison to salary inflation when you are coming into 2026? Any trends? And do you see any difference between Sweden, Denmark and Norway? So price versus salary inflation.

It's a fairly complex question, but let me try to answer it first in a simple way and then add some nuances. First of all, 80% of Norconsult's contracts are hourly based. They are time and material, and we have index regulating mechanisms that, for the most part, are linked to the salaries in our sector. So that means that in terms of margin development, it is fairly stable. We have a certain protection against salary increases. And that is something which has provided historical margin stability and will continue to do so in the future. But some of our contracts have different index regulating mechanisms. And depending on which in Norway, we call COPE, different indexes used by different customers, this might develop less positively or more positively compared to the salary index adjustment, which is the most common. So as a consequence of that, we saw last year somewhat weaker index adjustments compared to the average salary adjustment.

So far this year, it seems to be a little bit better than last year. But here, there will continue to be some differences. And when we look at the different markets, there are also nuances. For example, in Denmark, we have more fixed price projects, roughly 50% are fixed price. And as a consequence of that, we are more affected by the current demand situation in the market, which, of course, fluctuates. And at the beginning of last year, Denmark was quite strong, and then it has been a bit weaker the second half of last year. And then we see some signs of improving demand now, but I still expect the first half of the coming year to be a fairly challenging one in Denmark, but we are taking measures there to adapt to that.

Sweden remains somewhat tough market, but it seems also to have stabilized. So I'm not particularly pessimistic about Sweden going forward. I think that will develop nicely. So that was at least some flavor and color to the question, but it's hard to give any quantitative margin numbers going forward, and we don't do guiding.

Thank you, Egil. That concludes the online questions.

Okay. And I don't see any more hands here in the auditorium. So then I would like to thank everyone for following our presentation, both here in Oslo and online. See you next quarter.

Good morning, ladies and gentlemen, and welcome to Norconsult's Presentation of our Third Quarter Results. My name is Egil Hogna, and I will share today's presentation with our CFO, Dag Fladby. And today, we will present to you another quarter with solid organic growth and improved profitability.

Before I start, I'd like to spend a few seconds on this beautiful picture of actually our largest project so far, the Drammen Station and the development from Drammen to Kobbervikdalen, which is a project that has lasted for close to 10 years. It is a project, which has been completed on time on budget and at the right quality, which our customer, Bane NOR expected. And today, we will present a number of other projects, which are important going forward.

Norconsult has grown quite a bit during the third quarter. We are now approximately 7,000 employees in the company, which is up 400 compared to where we were at the end of the second quarter. We continue to have approximately 1/3 of our business in Buildings and Architecture, 1/3 Infrastructure and 1/3 Energy & Industry, which gives us a diversified portfolio with reduced exposure to any particular single market. It also helps that we have roughly 50-50 public and private customers, in total, 15,000 customers and every year, approximately 35,000 different projects.

The third quarter has been a good quarter. Our net revenues increased by approximately 13% to NOK 2.2 billion. We had a small calendar effect of NOK 9 million affecting both revenues and EBITDA positively. And the organic growth was 7% when we correct for the calendar effects.

Our adjusted EBITA increased by 26% from NOK 162 million to NOK 204 million. And when we look at the adjusted EBITA margin correcting for calendar effects, it ended at 8.9%, up roughly 0.5 percentage point compared to the same quarter last year.

The main event of the third quarter was the completion or acquisition of the Aas-Jakobsen Group, a group of more than 200 very competent individuals, specialists in advanced construction and infrastructure projects.

Our order book increased by approximately 4% from NOK 7.1 billion to NOK 7.4 billion. And as our CFO will tell you more about, we also had a nice increase of the billing ratio during the quarter.

In terms of the people development, I mentioned that we had quite a growth during the third quarter. The Aas-Jakobsen acquisition was part of it, but we also had significant -- significant organic growth. And the increase of 400 people is roughly 50-50 split between organic growth and acquisitions.

We also appointed a new EVP for our Danish business coming from Sweco in Denmark. However, he does not start in his position before the 1st of May next year.

During the third quarter, we also run our annual employee survey. We had a very high participation rate of 89%. And similarly to previous years, we had very strong results in terms of employee satisfaction.

But we use this survey very actively to identify where we have units with different results to make sure we understand what our employees think, what they are concerned about and that where relevant, we take the appropriate actions.

In Sweden, we were also, for the fifth consecutive year, nominated as a career company, which is a nomination given to companies with particularly good development opportunities, which are highly appreciated by the people working there.

The market was, I have to say, very similar to the previous quarter. It was a stable market with -- in the Buildings and Architecture business, still a fairly weak private market, while we saw a stability at a good level in the public part of the market.

Infrastructure is also mainly a public market where the demand followed the long-term plans, which have been developed by the governments in the Nordic sector. And we continue to have long-term customer relationships, making this probably our most stable business.

The energy part of our market was strong, in particular, when it comes to power lines and hydropower, but we also see some improvement when it comes to wind, although that is still a difficult market. For industry, the activity was still quite variable between the different subsegments.

And then on to some project examples. And here, we have one from an urban development in Partille in the western parts of Sweden, where Norconsult has an important overall responsibility.

Another example is the new music building at NTNU, the university in Trondheim, where we have a so-called integrated project delivery, where we, in close collaboration with the construction company, Veidekke and the investor Statsbygg are developing a new and important building as part of the university campus. We also have one subcontractor, Olav Olsen, who is supporting this important project.

Another project example this time coming from the Aas-Jakobsen Group, which is now part of Norconsult is the National Road 13 between Lovraeidet and Rødsliane, where there has been a stretch of road with a lot of rockfall, a dangerous stretch of road, where there now will be a 3-kilometer tunnel in order to bypass the most exposed areas with also other important parts. And this is a project where both the geologists and geotechnicians from Geovita and Aas-Jakobsen Trondheim are cooperating, and they are both part of the Aas-Jakobsen Group, which, again, is part of Norconsult.

Blafalli Fjellhaugen is the largest hydropower development in Norway for quite a few years, actually, 185 megawatts. We see, as I mentioned, a very positive and good level of activity in the energy segment. And we have been involved from the early stages and are now looking forward to working on the main part of this new and important development.

Alnabru in Oslo is actually the Nordic region's largest freight terminal. We have had a project here to upgrade the signaling system, and we have now won the important next phase associated with the follow-up during the construction and the documentation for the entire signaling system. This is an example of a very complex project, where our digital expertise has been important in order to win this project.

And then over to the financial presentation, Dag.

Thank you, Egil. Net revenue in the third quarter ended at NOK 2.19 billion, up from NOK 1.92 billion the same quarter last year. This is a 13% growth and Aas-Jakobsen Group is included from August in these figures. Adjusted for the calendar effects, we have a 7% organic growth, which is driven by higher number of employees, increased average billing rates and also improved billing ratio.

In third quarter, the billing ratio is at the lowest when we talk about seasonality. That is due to that we have quite many new people coming in, in our organization and starts in August and September. Our billing ratio end of quarter -- in quarter 3 ended at 72.7% up from 71.0%. So a continued improvement from second quarter. Adjusted for Aas-Jakobsen, the billing ratio is 72.5%.

EBITA ended at NOK 204 million, up from NOK 162 million, a 9.3% margin and adjusted for the calendar effects, 8.9%, an improvement from 8.4% in the same quarter last year. The improvement is due to increased revenue, improved billing rates as well as improved billing ratios.

In this quarter, we have booked amortization of NOK 15 million. And as I mentioned, Aas-Jakobsen Group is included from August. We have then done a purchase price calculation and approximately 15% of the equity value is distributed to intangible assets. And intangible assets are amortized according to the life cycles. So in this quarter, that is accounting for NOK 8 million. In the appendix in the presentation, you also will find our expectations for amortization going forward based from this acquisition.

Profit after tax, NOK 132 million, up from NOK 53 million in the same quarter last year.

And in terms of EBITA contributors, Norway Head Office, Norway Regions and Renewable Energy's contributed positively this quarter, while Sweden, Denmark and Digital and Technogarden was slightly lower EBITA.

Other is improving by NOK 11 million. That is due to change in internal cost distribution between the quarters, and that will not have a full year effect.

Then moving into the segment, and we start with Norway Head Office to the left, where net revenue ended at NOK 703 million, up from NOK 563 million. That is a 20% -- 25% growth, including Aas-Jakobsen, which is temporarily reported at Norway Head office. The revenue included in this quarter is from August, and it's NOK 85 million.

Organic growth, 9%, driven by increased FTEs, increased billing rates and also improved billing ratios. EBITA, NOK 79 million, up from NOK 60 million in the same quarter last year and also an improved margin, ending at 11% in the quarter, up from 10.6%. Increased billing rates as well as improved billing ratio and solid project execution are the main drivers for the increased profitability.

In the quarter, we also have a contribution of NOK 12 million from Aas-Jakobsen. That includes a provision for stay-on bonuses of NOK 2 million. And the NOK 2 million, they will be repeated in the next 6 quarters for our provision.

Then to region. And Norway Regions had a net revenue of NOK 606 million in the quarter, up from NOK 554 million. Organic growth, 9% due to increased billing ratio and also higher billing rates. EBITA, NOK 51 million, up from NOK 40 million in the same quarter last year, where the improved margin is from 7.2% to 7.9%. And the main driver for that is improved billing ratio.

Then moving to Sweden. And in Sweden, we had a net revenue of NOK 364 million this quarter, up from NOK 314 million, a 16% growth, while the organic growth was 6%, driven by higher number of FTEs and also increased billing ratios.

EBITA, NOK 10 million, more or less same level as last year, where the EBITA margin ended at 2.1%, down from 3.5%. Sigma Civil, which is a turnaround case, was still affecting the EBITA negatively with NOK 3 million this quarter. However, the integration is going as planned, and we see positive development month by month.

On Denmark, we have an organic growth of 4%. This is due to higher number of FTEs and also increased billing rates. EBITA, NOK 11 million, down from NOK 15 million and a slightly lower EBITA margin ending at 6.1%, down from 8.7%. Main explanation for that is that we have NOK 4 million additional expenses related to the senior recruitment initiative in order to secure long-term growth. And in addition to that, we have additional NOK 2 million in provision for earn-out.

Renewable Energy with a net revenue of NOK 194 million in the quarter had an organic growth of 12%. The strong organic growth is driven by the Norwegian entities, Hydropower and Transmission and other units partly mitigated by lower revenue in the international operations.

EBITA, NOK 35 million, up from NOK 26 million and a strong EBITA margin of 17.9%, up from 14.8%. And the strong margin is due to continued high billing ratio and also high billing rates.

And finally, Digital and Technogarden, where the net revenue declined with 6% that is due to decreased volume in Technogarden and also less FTEs in both Technogarden and Digital. EBITA was NOK 17 million, down from NOK 22 million. We have a margin of 11.3%, slightly lower than last year. This is mainly due to more -- less capitalization of costs in Digital this quarter compared with the same quarter last year and also slightly lower profitability in Technogarden due to lower volume.

Then to cash flow and cash flow from operation has seasonal variation. Third quarter is always normally the weakest quarter. And this quarter, we have a cash flow from operation of minus NOK 103 million compared with minus NOK 126 million the same quarter last year.

We have increased working capital, partly due to the seasonality, but also partly due to the growth. In addition to that, Aas-Jakobsen is included from August and the cash flow in August and September is normally quite weak. So approximately NOK 40 million minus of the NOK 103 million is due to that we have included Aas-Jakobsen for only 2 months.

Cash flow from investing activities, minus NOK 983 million compared with minus NOK 24 million. That is explained by the acquisition and payment for Aas-Jakobsen Group with NOK 1.12 billion. In addition to that, we have also sold some of our bonds investments and converted that into cash.

And cash flow from financing activities, NOK 810 million compared to minus NOK 71 million. We took on NOK 900 million term loan for part of the funding of the acquisition of Aas-Jakobsen.

And then to the balance sheet and compared with quarter 2, it has changed quite a bit. Since we now, as I said many times, we have included Aas-Jakobsen, and that actually increases the goodwill with approximately [ NOK 1.25 ] billion and also the intangible assets with NOK 25 million. So all in all, NOK 1.5 billion.

In addition to that, we have for first time also external interest-bearing debt shown as NOK 895 million net. And our cash position at the end of the quarter is NOK 809 million. reduced from [ NOK 1.2 ] in the second quarter, partly due to payment also of own funds of approximately NOK 320 million.

Our leverage or end of the quarter, we have a negative interest net debt of NOK 85 million, meaning that we have a leverage ratio now of 0.09x, excluding IFRS.

And finally, from my side, a few words on the order book, NOK 7.4 billion, up from NOK 7.1 billion in the quarter. And taking into account that we have also included Aas-Jakobsen order book, it's more or less stable compared with second quarter. Also in this quarter, we have seen a good mix of small, medium and some larger projects in the order intake as well as framework contracts.

And now I will leave the word to Egil to give us more details about the acquisition we announced this morning.

Thank you very much, Dag. And on to today's big news. We are very happy to announce that Metier Group will be a part of Norconsult going forward. And here, you see a picture of the CEO and the COO of Metier Group in the middle, Halvard Kilde and Kristin Romsaas. And we also have Norconsult's EVP of Technogarden, who has led the acquisition in the corporate management team of Norconsult.

Metier is a leading project management company in Norway with approximately 250 employees. It's a company we know very well because even if Norconsult has quite a bit of project management expertise, it is still one of the areas, where we have less people compared to what our customers demand. So we have often cooperated with Metier on projects in order to supply all of the competence, which our customers require in this area.

In addition to project management, Metier also delivers business development or management consulting in their terminology, digitalization services and educational program, which they call Academy. They have a strong brand. They are well known across both public and private customers in Norway.

And as part of Norconsult, they will remain an independent company operating under their own brand in a similar way as we have operated with Technogarden in the past and also Nordic Office of Architecture. We are paying an enterprise value of NOK 480 million, and it will be partly financed by a NOK 400 million loan facility.

When we then recalculate our debt ratio, we will then end up with net debt to EBITDA, excluding IFRS 6 of approximately [ 0.5 ]. And the transaction is subject to approval by the Norwegian Competition Authority, but we do not expect any issues relating to that.

Metier was founded in 1982. So it is a well-established project management company in Norway. I mentioned the 4 divisions, which they have, and they are headquartered in Oslo at Skoyen or [ Hovfaret ].

But for the last 2 years, they have been foreign owned. They have been owned by a U.S. consulting giant called Tetra Tech. And we think it is particularly satisfying to be the ones buying back a foreign-owned competence company to Norway. Very often, the flow is the other way out of Norway. This time, we are buying back a group of very skilled people back to Norwegian ownership.

Over the last 3 years, they've had revenues of approximately NOK 0.5 billion and the adjusted EBITA, you will see in the table and for the last 12 months, they've had NOK 60 million. This means that the EV [ EBITA ] multiple, which we are paying is approximately [ 8 ]. Profitability-wise, they have had approximately the same type or the same level of profitability as Norconsult has on average.

In terms of the industries they serve, they serve many of the same customers and clients, which Norconsult have. They have a little bit more activity in the public sector compared to private. Norconsult is 50-50, but both the public customers and the private customers, which are listed here, are also customers of Norconsult.

But there is not perfect overlap. And clearly, one of the synergies of this acquisition is that there will be an opportunity for Metier to sell their services also to the entire customer portfolio of Norconsult. While for Norconsult, the synergies are associated with the fact that we need more of this competence in our business.

Metier and Norconsult will mean that Norconsult to an even higher degree will be a full-service consultancy with also a significant strength in project management of the largest and most complex projects.

We will also strengthen our competence in early phase consulting or management consulting, where we will have the opportunity to support our clients even better in terms of the fundamental deliberations should they start a project or not, should they build here or there and so on.

They also have a digitalization activity, which is complementary to the one we have in Norconsult Digital and to a certain extent, in Technogarden, where we also have a digital activity.

We also -- they also have an activity called Academy, which is a training activity. And every year, they actually educate thousands of people in project management, for example, the Prince 2 methodology. This is something which will also be a good use internally in Norconsult. So we see a number of attractive opportunities.

For Norconsult, this is a milestone to become a really full-service interdisciplinary consultancy. It will strengthen our project management capacity and competence. It is also an accretive acquisition with solid financials. And finally, it is an important further step on our journey to become a top 3 player in the Nordics.

Then I'd like to give a few comments relating to the market outlook going forward. And this time, the outlook is very similar to the outlook we presented after the second quarter. It is actually so similar that I don't think you will find one word, which is different. And this is not because we are lazy in terms of not wanting to write a new description.

But I actually make a point out of it because we do not think that there have been significant differences in terms of how the market looks now for the next 3 months compared to what we presented to you 3 months ago.

It is a market where we continue to see some small signs of optimism in the private area of buildings and architecture, but it takes time. There are some new initiations. We do see that some parts of our architecture activity are doing better now. We are very happy with that. We would like it to move even faster, but at least it is moving in a positive direction.

The public market is very stable. We are grateful for that. That affects, of course, both the public part of the buildings market, infrastructure and the public part of the energy market.

And then where we continue to see a very strong activity is in the demand for energy and in particular, renewable energy. The growth in solar and wind requires investments in the power network to fully use the opportunities from variable power production. And these factors create a continued very strong demand for our renewable energy activity across all of the countries, where we operate.

And then other industries are a little bit variable. Some are struggling a bit with uncertainty relating to exports. But in total, we have a diversified portfolio, which means that we continue to expect a stable outlook.

You will have noticed that in some parts of our activity, we have a lower profitability than others. We have successfully taken actions so far this year in areas with a lower profitability, and we will continue to do that on an ongoing basis. That is part of the way we continue to run our business.

And with that, I would like to open up for questions.

We will start with questions from the audience here in the auditorium, and then we will move on to questions online. So those of you who are following us online, feel free to enter questions into the chat, and we will take them after we have taken the questions in the audience. And then we have the first question here from Simen.

Yes, Simen from DNB Carnegie. A few questions. I'll keep them to Q3 for the most part. In Q3, the other operations kind of has the biggest improvement in the quarter year-over-year despite doing heavy M&A, not necessarily 2 things that usually correlates lower other corporate costs and big M&A activity. Can you please elaborate just a bit what's going on there?

Dag?

M&A is part of our daily business. So that we have -- we are used to work with say pipelines of transactions. Now we have succeeded with 2 so far or actually 3 so far this year, but we have a very, very good team working on that separately from the operation.

So there's no M&A costs coming through in Q4 even on this?

The last transaction we did on Metier that, of course, some legal costs, but no advisory costs.

A follow-up question on the M&A. I've seen the notes you aim to become a Nordic player, but last 2 big M&As are both done in Norway. Can you just take us a bit through how you're thinking about that going forward and the rationale become -- by doing M&A in Norway and not the rest of the Nordics?

First of all, we are very happy with the 2 acquisitions we have made recently in Norway. We have made 3 this year, though. One of them is in Sweden, 2 of them are in Norway. It is so that when you work with M&A, you work with the portfolio, and we have a portfolio of interesting candidates in all of the countries, where we operate.

But this year, 2 of them have materialized in Norway. And it is not entirely up to us when these transactions take place. So this year, we have been fortunate that 2 very attractive assets have come up for sale in Norway. We are actively looking at opportunities also in the other countries.

But at the same time, that does not mean we are in a hurry. We are also patient, and we continue to work very hard to make sure that the acquisitions we make have a good strategic fit, a good cultural fit and last but not least, also the right price.

And my last question goes on to the contract, which got some press release on last Friday, the termination. Can you just tell us what happened in that situation?

Yes, we are still wondering a little bit what happened actually because what happened was quite unheard of and very special in Norwegian society and sort of contract history. So we are currently looking into why, in this case, our customer, Forsvarsbygg decided to reverse an allegation or -- sorry, an allocation of the Haakonsvern Flateplan project and give that project to a different consulting engineer instead. So we are still curious to find out what has happened, and we have requested to review the material associated with the process.

Magnus Rasmussen, SEB. Just another question on the NOK 11 million improvement year-on-year on other EBITA. You said that it was related to some distribution of costs between quarters. Does that mean that cost comes in Q4? Or has it already been taken earlier this year?

We have allocated slightly more cost to the segments compared with the same quarter last year. So the costs are in the book. but they are slightly higher on, for example, Norway Regions or Norway Head Office.

So it's between segments, not between quarters.

Exactly.

A quick question also on finance income, which drops around NOK 10 million from the level you have been at for the past few quarters.

It's a combination of earlier quarters, there have been some currency gains. Now it is a loss of NOK 2 million and it's also less interest rate and market -- you can say, market-to-market effects on the bond portfolio. In addition to that, the net interest is, of course, also affected by the interest on the NOK 9 million -- NOK 900 million term loan.

And finally, from my side, if you can just comment on the development year-to-date in Aas-Jakobsen relative to last year?

Yes. We have reported NOK 12 million for August and September, and that includes also a provision of NOK 2 million on stay-on bonuses as I presented. And that is -- that quarter is more or less the same as same quarter as last year.

Jesper Stugemo from Handelsbanken. So my first question is around Sweden here, and you seem pleased with the integration here, but slightly lower results here in Q3 year-on-year. So how much more of a headwind do you think we will see from the Sigma Civil in Q4 and Q1 2026? And if we look at the negative EBITA contribution here in Q3, how much -- how is that compared to Q2?

Maybe I can give a general comment and then you comment on the numbers, Dag. So we are pleased with the Sigma Civil integration. It is progressing and moving in the right direction. So there is improvement, but I'll give Dag the opportunity to comment on the details.

But the Swedish market is challenging. We consider right now the Swedish market, the most challenging of the markets, where we are operating. So we see that we are winning projects. We are growing, and we see a good billing ratio, but we see that the billing rates, the hourly rates are under pressure in the Swedish market. And that is the main reason of the current margin, which is lower than where we would like to see it.

And I think year-to-date, we have a negative EBITA effect from Sigma Civil of minus NOK 12 million. And just a reminder, that acquisition was very cheap. We paid less than NOK 30 million. And if you look at quarter 2, minus NOK 3 million, quarter 3 is also minus NOK 3 million. But keep in mind that there is also a vacation period. So it's less profitability in third quarter normally.

What we have seen in the last month is a positive development, which we hope will continue, of course, but we saw some positive results for first time in September, for example.

All right. And then I just have a follow-up on the M&A agenda here. So what regions do you prioritizing the most when you're looking at -- are you looking more into Denmark or perhaps Finland? And what kind of subsegments are you looking into, et cetera?

Well, the short answer is yes and yes, meaning that we are looking at Denmark. We are looking at Finland, but we are also looking at Sweden and Norway, even though Norway, I would sort of be surprised if there are more larger things coming there because we have said before and we continue to say that we expect to see the highest growth outside of Norway.

And as you will see in the Capital Markets Day material, that is what we have shown historically over the last few years, and we expect that to continue. But we are looking for the right opportunities. And we will look at acquisitions, which will complement our existing business. And we will go more in detail on that during our Capital Markets Day, which soon follows today.

But I can confirm that we are definitely looking at the other countries in the Nordic region and where we also have existing establishment outside. We have a small establishment also in Poland. So I would include that in that picture.

Martine Kverne from Nordea Markets. A lot of the questions already answered here, so I'll be short. But for the volume decline in Digital and Technogarden, how much could be -- or the sales decline, how much could be attributed to the volume versus like lower FTEs?

In digital, I will say it's more or less FTE, where we have a reduced number of FTEs, specifically in the consultant part. Digital are year-to-date having -- showing good results. They have improved quite significantly from last year.

In Technogarden, it has been some of the markets quite challenging, especially in Sweden. So there is more volume. But at the same time, we have reduced FTEs, of course, in order to keep up to speed with the profitability.

Is it possible to comment on like which sub-parts of the market is challenging?

In Technogarden. I will say especially the Swedish market has been challenging there.

And the order backlog, how much of that is Aas-Jakobsen, if you didn't mention?

Around NOK 400 million.

Bengt Jonassen, ABG. One question on recruitment. Typically, Q3 is where you hire a lot of new students. How is that compared to the previous year? And what is your planning for next year? And are there any differences between the business segments?

This year, it was a little bit lower than the year before in terms of recruitment of graduates out of university. We -- it's a little bit too early to sort of give any precise information on next year, but we plan to continue to grow. We plan to continue to recruit new graduates.

It might be that the -- I mean, my base case is that the number will be fairly similar to what it has been this year, also next year. But it's a little bit too early to say. But for us, it is very important to have the right balance between junior and senior resources. So we tend to flex more on our recruitment of experienced people rather than flexing on hiring fresh graduates. There, we have a more constant number of people every year.

A follow-up question from DNB Carnegie here. On Jesper's comment on the Swedish market, you said that there were some pressure on billing rates in Sweden yesterday, Norwegian competitor of yours kind of highlighted that the rate pressure in this sector is quite strong. Can you give us an update on just how you look at the situation given your recent comments on the Swedish market and what your competitors are saying and how you experienced the whole situation?

Well, I -- your commentary or your perception of what I said regarding Sweden is correct. We do perceive there to be pressure in the Swedish market. There is always a lot of competition in the Norwegian market, but we don't consider it to be different now in the Norwegian market compared to what it normally is. While in Sweden, we consider it to be more difficult this year compared to what it was last year for example.

Danish market, architecture, other sectors, is this anything similar?

The Danish market is actually a little bit more challenging now. We think it is related to some of the challenges Novo Nordisk is experiencing, which they are so big that they influence a little bit the sentiment in the market. So we see that there have been a little bit more postponements than what we typically have seen in Denmark. So in Denmark, it's a little bit weaker than what it was some months back.

And regional Norway versus the capital area. Is there any difference over there -- over here?

Well, you will soon have a more detailed presentation on that at our Capital Markets Day. But we are very pleased to see that the performance and development in Regions Norway has improved quite a bit during this year. And that is related to both internal improvements, but also some market developments.

You can't wait for this indeed.

Are there more questions here in the auditorium? I don't see any more questions here. Then I ask if there are any online.

No.

This time, Jesper, you are here basically. So then I would like to thank everyone who has participated at our quarterly presentation. We will soon move to our Capital Markets Day. The Capital Markets Day is a physical event. It will be recorded, though, and it will be made available on our website after the event is finished. So with that, I'd like to say thank you for your attention, and then we take a short break. Thank you.

Thank you.