Net profit for the year and Q4 2020: Strong revenue growth and underlying performance for Norconsult
Norconsult Group returned strong growth in turnover and underlying earnings for 2020, despite a challenging year marked by the coronavirus pandemic. Gross revenue for 2020 came in at NOK 6,932 million, compared with NOK 6,289 million for 2019. This represents an increase of NOK 643 million (10.2 per cent), of which organic growth (excluding acquisitions) accounts for 6.6 per cent. Operating profit including goodwill depreciation, amortisation and impairment came in at NOK 438 million compared with NOK 461 million for the previous year.
Operating profit has been impacted by changes to the bonus scheme in Norconsult AS, which was previously paid as dividends through treasury shares (B shares). It was decided in an extraordinary general meeting (EGM) to convert the treasury shares into ordinary shares and replace them with a salary bonus scheme for all employees in the company. This adjustment reduces the operating profit for 2020 by approximately NOK 128 million.
Total goodwill depreciation, amortisation and impairment for the Group for 2020 amounts to NOK 171 million and EBITA is NOK 610 million, with a margin of 8.8 per cent. Taking into account salary bonuses, EBITA would be NOK 465 million in 2019, with a margin of 7.4 per cent.
Revenues for the fourth quarter of 2020 came in at NOK 1,953 million (1,817), an increase of 7.4 per cent from the same period last year. The operating profit was NOK 85 million (94), which includes a provision of NOK 32 million related to the salary bonuses that are replacing the treasury share model. Restatement of comparable figures for the fourth quarter of 2019 would have resulted in an operating profit of NOK 70 million. The operating result for the last quarter of 2020 thus represents a strong underlying improvement in profit compared with the corresponding period last year.
“We are pleased with both our top line revenue growth and underlying performance for 2020 and the fourth quarter. Last year was a unique and demanding year affected by the coronavirus pandemic, and I would like to extend special thanks to our customers, partners and colleagues for all your efforts. I am impressed and grateful that we have been able to present strong results despite the pandemic,” said Chief Executive Officer of Norconsult Egil Hogna.
The performance improvements come from all business areas. Norconsult in Sweden and Denmark have performed particularly well in 2020, and the Nordic region achieved an overall performance improvement of 50 per cent. Revenue growth is both organic and from acquisitions, particularly positively affected by full-year effects from the acquisitions of ECT, Øvre Romerike Prosjektering and Danish KHS Arkitekter during 2019. The improvement in results can also be attributed to pandemic-related cost savings associated with reduced travel and fewer courses, events etc.
In Norway, Norconsult completed some minor acquisitions in 2020: SG Arkitektur AS in Hønefoss, Kosbergs Arkitektkontor AS in Molde and A3 Arkitektkontor AS in Harstad. The Architecture market area experienced a drop in activity levels as a result of the coronavirus pandemic.
Exciting projects and high activity levels
The year 2020 was an unusual year for everyone. Despite the coronavirus pandemic, Norconsult has won several large and small assignments, and maintained a high level of activity with several ongoing projects within and outside the Nordic region.
In Norway, the company is continuing its efforts in connection with the planning and design of various projects in different business areas. In Bærum, Norconsult is currently working on the “Vestkorridoren” project, developing a zoning plan for the Ramstadsletta-to-Slependen section of the E18 motorway west of Oslo. Norconsult is also assisting Nye Veier with the planning work for the E39/E18 (Ytre Ringvei) motorway in Kristiansand. The company is working on the design of a new water treatment facility for Asker and Bærum Waterworks (ABV). In Brevik, Norconsult is in the process of planning Norway’s first full-scale carbon capture, utilisation and storage (CCUS) facility. The company has also been responsible for the project design phase of the new Bodø Airport project, a sustainable initiative that will create an entire new district in the municipality. Norconsult is making good progress in designing a new clinic and proton therapy centre at the Norwegian Radium Hospital in Oslo, and in connection with other hospital projects.
In Sweden, Norconsult has won a number of framework agreements in various business areas. The company strengthened its position in the Architecture and Urban Planning business area through projects for Polarbröd in Lokalförvaltningen Göteborg and the mining company LKAB. Norconsult AB has also won the contract to design the acoustics for a new concert hall in Lund. In December 2020, Swedish Transport Administration announced that Norconsult was awarded the 2020 Mälaren Line working environment award for innovation, collaboration and conscientious work in the working environment field. In November 2020, Sävehuset primary school won the Sweden Green Building Award.
In Nordhavn in Copenhagen, Denmark, Norconsult has led the construction of Østre Landsret high court, a construction project consisting of 20 courtrooms, waiting areas and offices. The project has Gold Standard sustainability certification. Norconsult in Denmark has also played a key role in the engineering of a concrete and materials laboratory at the Technical University of Denmark (DTU), which forms part of a research project on climate-friendly concrete.
In 2020, Norconsult gained recognition in various areas. Norconsult won the international AEC Excellence Award for digital innovation for the Nye Veier project on the Kristiansand Vest–Mandal Øst section of the E39 Coastal Highway Route, a collaboration with AF Gruppen. This was the industry’s first all-digital transport project.
In November, Norwegian engineering students named Norconsult Norway’s most attractive employer in the annual Universum Professional Survey, and best in the consulting engineering category. By the end of 2020, there were about 4,600 employees in Norconsult, and some 400 new colleagues joined the company throughout the year.
Strengthening sustainability efforts
The construction and property industry is Norway’s biggest mainland industry and one that accounts for a significant proportion of total greenhouse gas emissions. With a net value creation of nearly NOK 400 billion and 350,000 employees, this sector is vital to value creation in Norway, both locally and nationally. Throughout 2020 Norconsult has worked actively – together with both employees and clients – to contribute to a more sustainable society through the deliveries in projects. This is where the company can have the largest impact on sustainable development, but Norconsult has also set concrete targets for improvement of it’s own environmental footprint.
Norconsult participates in the industry wide initiative Sammen 2020 (Together 2020), and thereby commits to contributing to a significant greenhouse gas reduction as part of an industry that today is responsible for a substantial proportion of greenhouse gas emissions. In 2020, Norconsult also joined UN Global Compact, the world’s largest sustainability initiative for companies, as well as Skift (Shift) – a business-led climate initiative that seeks to demonstrate the business opportunities afforded by the transition to a zero-carbon society.
“Despite tough competition in the market, I believe Norconsult is well-equipped or further growth and development. For years, we have worked systematically to recruit the best people, those who always go the extra mile to create value for our customers. Our commitment to innovation, both internally and in our projects, also gives us a good foundation for continually challenging established truths and searching for more sustainable, effective and socially beneficial solutions designed for tomorrow’s society,” says Hogna.