First quarter 2021: Significant increases in turnover and financial results for Norconsult
The Norconsult group delivered strong growth in both gross turnover and operating results during the first quarter of 2021. Gross turnover for the group was NOK 1900 million during the first quarter of 2021, as compared to NOK 1801 million in 2020. This is an increase of NOK 99 million (5.5 per cent), where organic growth, with acquisitions taken into account, is 5.2 per cent. Operating results (EBIT) for the quarter were NOK 145 million as compared to NOK 92 million in 2020.
Operating results in both years have been corrected for bonus pay, introduced when winding up the B-share arrangement. The group delivers a gross operating margin of 7.6 per cent (5.1), while the EBITA margin, prior to goodwill amortisation, is 9.2 per cent (6.9) in the first quarter.
When considering there are 16 fewer work hours in the Norwegian division of the operations compared to the same quarter last year, the underlying growth for the group is approx. 7.5 per cent. There are still some expense savings due to infection control measures and restrictions related to travel and similar items.
"In light of Covid-19 and tough market competition, these are good results. We are maintaining a good pace, with a high number of orders and more than enough to keep us busy, despite the Covid-19 situation. It is gratifying to see a particularly strong development in the Nordic Business Area, with a strong increase in turnover and profitability, says CEO Egil Hogna at Norconsult.
All business areas are showing growth in both gross turnover and operating results. In the Nordic division, the gross turnover increased by NOK 72 million, which corresponds to an increase of 14.7 per cent, compared to 2020. This is exclusively the result of organic growth.
Strengthened interdisciplinary cooperation in the Nordic division
This week it was announced that Norconsult would acquire RUBOW arkitekter in Denmark, a company with nearly 100 employees, most of them architects.
"We have seen that interdisciplinary cooperation gives competitive advantage. In order to get the maximum sustainability and productivity from the projects, it is essential for architects and engineers to work closely together. At Norconsult, we now have around 850 architects, and this provides strong synergy," says Hogna.
In addition to RUBOW the Norconsult group has so far, in 2021, acquired the companies of Pecom AS in Flekke, Bothnia VVS Ingenjörer AB in Luleå, AG Plan og Arkitektur AS in Ørsta and Citiplan AS in Larvik.
There has been a high level of activity and we have worked on many exciting projects during the first quarter of 2021. In January, the first digital planning notification was sent to neighbours affected by the new E6 motorway, south of Trondheim in Norway. Norconsult Information Systems (NoIS) have been crucial in developing a solution.
In February, Norconsult won a framework agreement for the control and approval of concrete, steel and wooden bridges for the Norwegian Public Roads Administration. It was deemed the consulting company with the best expertise on bridges. In the first quarter, Norconsult continued its planning work on the E39 Outer Ring Road in Kristiansand, and E18 Western Corridor in Bærum. Norconsult is also involved in the planning of E6 Korporalsbrua – Prestteigen and E6 Gyllan – Kvål, as well as the E6 route Roterud – Storhove. In the area of hospitals, Norconsult is in the process of designing new clinics and proton buildings for Radiumhospital, Hammerfest Hospital, Narvik Hospital and Drammen Hospital. The company also has a key role in the design of a number of school buildings and exciting industrial projects, such as the new CO2 capture plant for Norcem in Brevik.
There has also been plenty of activity in the rest of the Nordic region during the first quarter of 2021.
Norconsult in Sweden won an assignment as project manager for work on areas of ground contaminated with Perfluoroalkyl and Polyfluoroalkyl substances (PFAS) at the Örnsköldsvik Airport and Midlanda Airport. The company has also won a three-year framework agreement with Vattenfall Produktion, an assignment Norconsult estimates will bring in about SEK 100 million. Norconsult won another framework agreement with Svenska kraftnät involving consulting services. The business area of Architecture and Community Planning recently won framework agreements with several municipalities in Sweden, in the fields of urban development and architecture.
In Denmark, Norconsult delivers all engineering services for construction of the new police station in Silkeborg. It is expected that the building will be ready for use in 2021. In Herlev outside Copenhagen, the company has been given the challenging task of renovating and rebuilding a business area in Herlev Bymidte (city centre), which will be expanded to include residential homes and independent businesses.
New corporate management
In April, Norconsult adopted a new organisation structure and corporate management. This corporate management has been expanded to strengthen strategically important areas such as Nordic growth, digitalisation and sustainability. Operations in Sweden and Denmark were designated separate business areas in the new corporate management, in order to strengthen its Nordic activities. Renewable energy, Digitalisation and the group's recruitment partner Technogarden were also established as separate business areas. The business areas of Head Office and Region Norway will continue as before.