Rejlers Stock

Good day, and thank you for standing by. Welcome to the Multiconsult Rejlers Merger of Equals Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Viktor Svensson. Please go ahead.

Thank you very much and to everyone connected, we say very welcome to today's presentation of a proposal of a merger of equals between Rejlers and Multiconsult. We will start with a short introduction of the 5 speakers available, and I will start with myself, Viktor Svensson, CEO of Rejlers. I have 23 to -- 24 years in this industry, I started my career in technical consulting, when I was 27 years old and started in the group management team of ÅF [indiscernible]. I worked 15 years with ÅF during a period of time when we transformed the company in terms of growth, profitability and employer brand. I ended my career at ÅF as a divisional head in late 2017. Then I started as the CEO of Rejlers in February 2018 with a very clear target of turning the company around in terms of growth, profitability and employer brand. I've been here now for 8.5 happy and speedy years, and we have had a good start, if you can call 8.5 years a start.

I have a very strong devotion to this industry because it's all of our people and to get a warm and winning culture on board and looking very much forward to this fantastic merger. I'm handing over now to my future colleague, Kristin.

Hello. I am Kristin Augestad, and I'm really excited to be here today. I am the Interim CEO of Multiconsult and I'm also Executive Vice President for Norway. And I've been with Multiconsult for almost 30 years. And I've been a member of the executive management team for several years, where I've also been responsible for our architecture segment. And together with Viktor and I here today, we also have...

I'm Anna Jennehov, I'm CFO of Rejlers [indiscernible] I've been the CFO for Viktor since almost 8 years ago. I love the journey looking forward to, hopefully, next journey and I have a background as CFO for listed consultancy companies for more than 20 years. And I hand over to...

Rikard Appelgren. I'm the Chairman of Multiconsult group and I have, well, almost 40 years of working experience in this industry, mainly 18 years in WSP group, which I left like 10 years ago, and I joined the Board of Multiconsult 8 years ago. And this -- what's happening today infront of us is -- has been the thought for a long time, and I'm very excited about the common future with the Rejlers family and to put a new very big and stable company on the Nordics front.

Yes. And the Peter Rejler, I have been in this business for 60 years. That's how old I am. So I was born into it. And I've been the CEO of the company, and I'm now the Chairman of Rejlers.

All right. So first, a brief summary of Multiconsult. We are more than 4,000 employees in the group working on projects, spanning more than 45 countries. And we participate in approximately 15,000 projects each year for more than 5,500 clients And through this, we have delivered profitable growth based on a robust business model with a diverse portfolio and strong professional environment that can affect our clients with their challenges across business areas and geographies.

Yes. And on the Rejlers side, I think that this slide is showing that we've had simultaneously nice and successful rights during the last couple of years. At Rejlers we have been focusing a lot in the past 8 years on leadership, operational excellence, employer brand and to have a stretched strategy. We have doubled the size of the company with a solid mix of organic and M&A growth. Largest acquisitions has been Nest Engineering Consulting in 2019 and [ EuroPCom ] 2023. Our EBITA is up to 7x or actually 10x if you go with the actual results, giving a development from EBITDA at SEK 37 million in 2017 to SEK 370 million last year.

Still the 1 thing that I'm most happy about with the development of Rejlers so far is the employer brand. Today, we are in a naturally strong recruiting position in all markets, and our organic outlook is stronger than ever. All right. Moving on in the presentation. This is the first early summary slide of what we're proposing today. And let me be very honest and maybe even a bit emotional with this starting picture. As I said, after literally living in the tech consulting landscape for 24 years now and monitoring all and every competitor every quarter, I want to call the proposed merger of Multiconsult and, Rejlers, the perfect match. I honestly can't see a better match in the Nordics currently.

I'm basing that on a lot of bullets, but mostly on culture, on size and the geographical fit. I've learned to know Multiconsult over the last year, and I can see that we share a lot of the core values. Core values of a strong portion of humanity, empathy, but combined also with a strong winners instinct, which is my favorite combination. And we will protect this going forward. The size of the companies are almost the same and also the journey that we have behind us.

Thirdly is the geographical fit, which I think is unique when it comes to a merger of this portion because I think we all know monitoring this industry that the hardest part when launching a big merger is when you have 50 to 100 offices in the same cities all over the place, where you have built up the leadership on 1 side of the main street of the city and on the other side of the street, you have a similar office building a strong leadership.

And you're supposed to choose the new leaders of that very 50 in 50 to 100 places. That is big obstacle. That's a big challenge. In this case, that problem or hurdle is very -- in very few places. That is a unique thing with what we're proposing today. This is very much our business as usual but with a great twist. We will jointly create a company that will be much more of an institution standing tall in a complex and fast-changing world, with a total of SEK 11.7 billion in total sales, EBITDA, SEK 795 million and some 8,000 highly skilled engineers. I'm very excited. Kristin?

And just to state what Viktor just said. In short, we are a really, really strong brand. And this merger brings together 2 highly complementary organizations with strong cultural fit, deep technical expertise and complementary geographic focus. We will be preserving the strength of both companies while creating a stronger Nordic platform for future growth. The combined company will benefit from balanced leadership, a dual listing in Stockholm and Oslo and the support of 2 committed long-term owners, [indiscernible] Multiconsult and Rejlers family. On today's agenda, we will take you through the strategic rationale behind this proposed merger recall, give you some figures for the combined group and merger parameters and indicated questions. And at the end, we will have a Q&A session.

Great. We're moving on. And this slide is very much about to try summarizing a few key benefits of today's proposal. I think 1 very important element that we've seen together during our early work with our proposal today is that we are forming a top 3 player in the Nordics when it comes to energy industry. That's where we landed when we really dig into each and everyone's business here. And looking into the fundamental needs of energy and industry in the Nordics for the coming 5 to 10 years, that's a very good place to be. We might even say that in a couple of years, we will be #1 in industry. We are projecting massive investments in nuclear, in defense and in energy in the Nordics for the 5 to 10 coming years. So we will have a very interesting position.

Secondly, we are emphasizing the employer brand because if there is anything I've learned from 24 years in this business, it's the importance of a shining employer brand. That is a top 3 priority for a company like ours. And with the joint story we're having on the table, I'm sure we can build a shining employer brand together in the Nordics.

Thirdly, we will be a top 5 player in our industry in the Nordics. And you can say whatever you want, but size matters in this business. If you want to be a contender for the biggest future projects in society, in the industry and energy, you need to be in the top. Both of our companies, we've been on the border line of getting there, but not really. But with this merger, we will be a top 5 player and a natural contender for the biggest projects in the Nordics.

Fourthly, we have rated, of course, IT and AI, the million dollar question for every industry globally. What we can see is that there is not 1 employee in Multiconsult or Rejlers who's not using AI today in making our clients more efficient, but we need to invest more we need to evaluate our business model and so forth. And together, we will be stronger here. I'm very impressed with what we can see what Multiconsult have done and where you are in this space at the moment as well. I want to say that.

Finally, of course, we see great synergies. When you merge 2 similar companies on this side, stock listed and we have identified cost synergies in between SEK 100 million and SEK 120 million that will be gradually taken during a period of 3 years. It's mainly within IT coordination, but it's also within procurement and in very obvious areas that you will not need 2 management teams -- group management teams. You will not need 2 Board of Directors. You will not need 2 annual reports, 2 sustainability reporting. So I'm not worried about this level. We have a very sophisticated program on picking those SEK 100 million to SEK 120 million over a 3-year period. Thank you for that and moving to the next slide.

This slide is what I just talked about as the priority 3 for us, getting the position of being the fifth biggest player in the Nordics and getting up there, seeing a natural contender for the biggest project is a clear position that we both are striving for and getting now. And there is a clear value in this. There has been frustration in both sides or not really being seen as a top 5 player. We can also see that the new company have a strong foundation in 4 areas of what I've talked about industry and energy. And when we say industry, we include DFM, infrastructure, buildings and also within water treatment, where multi console is impressively strong and Rejlers have intentionally grown fast over the last years. Moving on.

So this merger will enable us to create additional opportunities for complex and meaningful project work and enable stronger subject matter expertise and career opportunities for our employees. Viktor and I have led several times over the past months, and we share a common vision on how we want to develop this new group together. Sales is focused on many of the same things as new sequences on, building a culture where we put our class first, where we look after each other and where it's a competence, learning and knowledge sharing at the sector.

And our combined culture will be built around technical expertise, learning and collaboration.

Together, we can offer employees broader professional communities more development opportunities and an even stronger platform for attracting and retaining talent. This merger is, first and foremost, about creating greater value for our clients and our shareholders. We're bringing together complementary expertise and geographic reach we can offer broader services to more clients across the Nordics and beyond. We see clear opportunities in combining our Nordic capabilities on detail, on coastal and Arctic services on energy and on infrastructure projects. Collaboration between the architects from Multiconsult and the engineers from the whole group will enable earlier involvement in projects and potentially increase our market share. And by sharing expertise across countries, we can offer more holistic solutions and accelerate growth.

Super. This picture is mainly about to summarize a few basic facts saying that we see obvious benefits in coming together for joint investments in employees AI and in our new service offering. We will start with a strong balance sheet with a net debt of 2.1% and saying that -- it goes without saying, but M&A will not be our focus for the first 12 to 18 months. So the net debt will decrease alongside with integration. Thereafter, we will be back with M&A, an area where both companies have succeeded well during the last 5 years. We also see that we will be able to elevate our stock market story for the coming years, but that is naturally to prove, but we see immediate room for improvement in stock liquidity and broader European interest in our share that will be listed both in Stockholm and in Oslo.

As I said, this is a perfect match to me and to us in the way that we will not have 50 to 100 offices to integrate and choose who is the local manager. Multiconsult is dominant in Norway and Rejlers is very strong in Sweden and in Finland. The geographical overlap is very gentle. But still, we have identified 3 clear organizational changes that will benefit each operation.

Firstly, we will integrate Rejlers Norway with 250 highly skilled employees with Multiconsult Norway. It's evident that Rejlers Norway will gain from becoming part of a market-leading position with all the relevant framework agreements at hand. The employer brand position, Multiconsult have earned in Norway and a new network of 3,400 colleagues in Norway.

Secondly, we see a clear upside of moving Multiconsult Swedish infra company of Ontario into Rejlers Sweden. The reason for this move is very much like the move in Norway that I just mentioned.

Thirdly and finally, we are moving Multiconsult Poland with 400 skilled employees within infra and industry into our most international entity, Rejlers Finland, running a daily business with major assets and operations in the UAE and India. The international approach from our Finnish management will take the Polish operations into new context, I'm sure. I'm also happy with that these organizational changes have landed very well with all parties involved before today's launch.

So the combined group will have 4 Nordic core markets, giving us a strong local presence across the region. And as Viktor has stated several times, our posters are highly complementary. Vertical cells has extensive coverage in Norway, while Rejlers is well established in Sweden and Finland.

Our Nordic platform is further strengthened by strategically important and fast-growing international operations. And because there is limited geographic overlap, the combination expands our reach from day 1. Over time, we will, of course, optimize the office network and bring locations together where this improves collaboration, efficiency and client services. This is the proposed structure for the combined group with clear country-level responsibility and architecture as a separate segment.

For most employees, it will be business as usual with the vast majority retaining their current manager. The structure is designed to maintain client focus while enabling revenue and cost synergies. Our headquarters will be in Stockholm with the main office in Oslo and group functions will be shared between the 2 locations.

Yes. I have a truly solid feeling with this slide with the constitution of my coming management team for the new group. We have strived for a solid blend from both companies, and this is what it looks like. But as important for me as who is at the helm for ever position is that we steer with pure clarity. The P&L, the profit and loss streams must, in my book of leadership, be crystal clear. In the new company, the 4 engines for growth, results and development will be run with the 4 P&Ls of Norway, Finland and International Sweden and as number four, a pure P&L with architects, 600 architects in Denmark, Sweden and Norway.

We have a good mix between the companies in the new management team, and I must also add that the meetings I've had with the persons on the screen makes me even more excited about the journey to embark. It's great people with a strong drive and a great portion of humanity.

Kristin will apart from being responsible, ultimately responsible for the P&L of Norway, the Deputy CEO for the group with responsibility for strategy and business development. The headquarters will be in Stockholm and the main office in Oslo. Main office means a lot, but basically, the ultimate responsibility for finance, meaning CFO and group coordination of both IT and HR, extremely important positions for a consulting company.

Anna Jennehov starts as the CEO -- CFO at least from what I've heard. But you know, Anna, how happy I am for this and so is everyone because the first year will be very important with the financial integration. Within 1 to 1.5 years, the next group CFO will be recruited and have its home address in the main office of Oslo. All right.

Mine and Kristin's final slide. And here are the consolidated financial statements for the joint group. We are reaching a total revenue of SEK 11.7 billion with an EBITA of SEK 795 million and a consolidated EBITDA margin of 6.7%, looking at rolling 12. We will keep our targets of 10% annual growth and EBITA 10% over a business cycle. How to leave the current 6.5% to 7% levels for 10%, we will come back to, but I can already now say that the important elements will be higher utilization than the consolidated level, SEK 100 million in synergies from the merger and certainly, getting our lowest performing entities to substantially improve for the coming years.

Yes. Hello. This is Peter Rejler talking. Not only are the 2 companies a perfect match in geography, culture, technology, et cetera, but it is also a perfect match between Stiftelsen and Multiconsult and the Rejler family. Multiconsult have a history that reaches as far back as 1908. And Rejler as far back as 1942, approximately 200 years of knowledge and experience now in 1 company. Stiftelsen Multiconsult was founded in 1974 to secure its long-term development and to safeguard the company's culture as well as the well-being of its employees and business, which is exactly what the Rejler family school has been for 82 years. So who is -- who are we, the Rejler family? Well, we are 3 generation of engineers, started with my grandfather, 1942. And it's not ending with me. I have lot children, 6 of them, of which 3 are studying to be a master of science, which I'm very, very proud of. And so the continuous of generations will go on.

And the decade after decade, have we been adapting to new technologies and challenges that has been. And I think we have succeeded pretty good. And with that, I will leave over to Rikard.

Okay. Thank you, Peter. Rikard here, and I will take you through the key merger parameters and the indicated table. And I can say that these are the results of good negotiations between the Board and management in each company. They've been in very good pace. And I think that the result that I would present is based on our responsibility to take care of our shareholders in each company. So I think it all starts with -- we do the announcement today. This will follow with an EGM in each company. The plan is 19th of October, where the shareholders will be able to vote on this merger.

As an information, I think it's important to say that behind the rejlers shareholders, we have the rejlers family and other long-standing shareholders that have representing 80% of the share of the capital and 51% of the votes in Rejlers that have undertaken to vote in favor.

On top of that, we also have 3 larger accounts, representing 31% of the shares and 19% of the voters that are supportive of the merger. On the same issue in Multiconsult, we have our long-term shareholders 6%, and others that represent 37% of the votes that have undertaken to vote positive to this merger. So it seems like that there is a good understanding of the drivers behind it.

The base for this merger is an exchange ratio of 09.9725, resulting in a 54% ownership for Multiconsult shareholders and a 46% ownership for Rejlers shareholders, which is very close to the 45-day [indiscernible] for the 2nd of September. The exchange rate of the shares represents a premium of 1.7% for Multiconsult and a discount of 2.0% for Rejlers compared to the last closing price.

As Viktor has said, there will be a dual listing on the Oslo Børs and in connection to closing up this merger later on this year. And as a final information, a new Nomination Committee led by Arnor Jensen, who is the Chair of Stiftelsen Multiconsult will be appointed and in consultation with them, a new Board will be put in place and announced later. So with those words, I will just say a few words on the timetable. You've heard it already. We announced today. We planned the extraordinary general meetings in the 19th of October. And the ambition is to close this merger and have the dual listing on Oslo Børs in place late 2026, early 2027. Thank you. Okay.

Now it's time to go to the Q&A session. [Operator Instructions] We will now take the first question.

From the line of Johan Dahl from Danske Bank.

Just a few brief questions. I was just interested to hear, I mean, in Rejlers theres been some operational challenges in the last sort of 6 to 12-month period. I'm just wondering from the rejlers side, when you look on Multiconsult, how do you think it's sort of performing if you sort of take a top-down view, look at it over the cycle? You referred to some potential Victim turning around underperformance, et cetera. But just the general sort of perception of how Multiconsult is performing today.

Yes, Johan. I mean, I think you're referring to that we have had a volatile journey in our Norwegian operation. And so I think that this proposal is also an answer to our Norwegian issue. Coming back to your core question, I think that what we can see is that Multiconsult have a very strong position growth and profitability in its core operations in Norway, but obviously, weaker profitability in the Architectural segment and also in the International segment, which basically is the Polish business. So that's what I was referring to. But very strong profitability, very strong business in the Norwegian space.

Got you. Just follow-ups -- 2 follow-ups. Firstly, on the -- what you're trying to create on architecture, this franchise. Perhaps can you dwell very briefly on that, what you aim to achieve with architects, perhaps looking a few years out? And second also, Viktor, on sort of how does this transaction affect your commitment in terms of being the CEO? I mean, you've always been super committed in rejlers. Does this in any way change that commitment to being sort of for longer for more or just interested to hear your view on that.

I think the first question, when it comes to the architects, for me, it was very important of giving them a pure P&L in the group management team so that we can monitor every quarter and how the profitability will develop. So we're not hiding because that could be one strategy. I want to be very transparent, and we will walk into this merger with a target of making the architectural business much more profitable and have a fruitful combination with the rest of the group. If we're not succeeding, then let's see what to do.

But I mean, that goes for every business in every company, but I'm just saying. But every entity with an evidently lower profitability than the rest will have a spotlight. They will be in the limelight forever under my management. So that's the baseline. The second question is that, yes, I've been super committed to the Rejlers assignment. And with this, if it's possible to go beyond that, that's what I'm going to do. I'm super committed, Johan.

[Operator Instructions] There are no further questions at this time. I would now like to turn the conference back to Viktor Svensson for closing remarks.

Well, then we are saying from the Norwegian and Sweden side, thank you for listening in. We are close to overexcited this very morning. It's a fantastic way of starting a new week. We've been working extremely hard getting here. And I think we all have been in similar situations, but not reaching where we are today. And that also makes us very, very excited. Now the hard work starts and me and Kristin and the rest of the group management team will make everything in our power to make this something special.

But that goes for -- from Q1. We need to remind ourselves of that. So back to business from tomorrow. And then we will look forward getting together for a real run from next year. Thank you very much for listening in. And we are, of course, available the rest of the day with Anna, Kristin, myself, if you want a private conversation. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.