Welcome to this presentation of the third quarter 2021 for Multiconsult. My name is Grethe Bergly. I'm the CEO, and with me for this presentation is also our CFO, Hans-Jørgen Wibstad. We are actually now present in the Munch Museum, who just opened a few weeks back. It's of course with pride that we are able to invite somebody here also present into this building that has been a part of our company since 2010. I'll give you an introduction and some of the highlights for the quarter, and then Hans-Jørgen will go on and give some of the details of the figures.
Looking at the figures, you can see that we come in at NOK 760 million revenue, which is reasonably level with the third quarter in 2020. Although I would like to remind everybody that 2020 was a very different year from a normal year, and therefore, to some extent, comparison is difficult. For the year, we come in at NOK 2.7 billion. We have for the quarter an EBIT of NOK 46 million, representing a 6% margin. This is not a margin that we are satisfied with and the quarter in isolation is slightly weaker than we would like.
If you'll see for the year- to -date, the margin represented by 9.5%, it's in line with where we expect to be. The billing ratio is quite significantly lower for the quarter, and we will give you some insight into what has affected the billing ratio. Year-on-year, it's on par with 2020. Also, operating cost for the quarter is higher than we saw in 2020. Hans-Jørgen will give you the details of what this represent. It's something to do also with seasonal changes. If you look at the year-on-year of NOK 310, we are in line with the cost as we see and expect.
It's important for us to express that the effects of nextLEVEL is still with us also in and through 2021. Solid operating performance for the 9 months of 2020. We have had a slow start after the summer and some of it is assumed to be a post-COVID effect. We have good sales year- to -date, and we go out of the quarter also with a high order backlog. All in all, we are on a steady course for the results that we have achieved over the last year. The low activity resulting in a billing ratio of 67% is partly affected by much lower activity in August. We're also seeing that the speed is picking up towards the end of the quarter.
We have also had a significantly lower activity level within transportation. As you may remember, we got a cancellation of a big road contract, and Hans-Jørgen Wibstad will also give you some more details on that later. In addition, we are seeing some effects of restructuring in LINK Sweden. The order intake of NOK 740 million is in line with what we saw last quarter because in this figure is a deduction of NOK 135 million from the road contract. Steady course, we will continue to have focus on our core business, sales and project execution. We also see that there is a good and stable market outlook in all five business areas. However, we are also experiencing some post-pandemic situations which is causing some uncertainty in the short term.
We are also making a change in how we report our business areas. We're going to from the third quarter, we will report sales and order backlog in five business areas: building and properties, mobilization and transportation, renewable energy, water and environment, and industry. In the figures that you are seeing in this report, oil and gas is included in industry, and city and society is included in buildings and properties. We're seeing that the way the market is moving, the way the clients are moving, this is a much more rational way of reporting for the future.
Looking at the order intake, as you can see, the figure for the order intake is significantly lower than the third quarter in 2020. Because we have deducted NOK 135 as for the cancellation of the road project, we're really saying the sales for the quarter has been in line with the previous quarter. Some of the significant sales that we've made in the period is three frame agreements that we would like to mention. One is for the Oslo Municipality, supporting them on the majority of engineering services. It's a frame agreement that runs for four years and then an option to extend for another three. It means that we will be very much present in engineering also in the Oslo city in the future.
We've had one with the Norwegian defense authorities. This is on an area that we're seeing is a growth area on environmental services to do with both rehabilitation, demolition and soil contamination. This is one of the largest frame agreements of its kind in Norway. We also have a similar frame agreement with the roads authorities. To a large extent, this is about helping the road authorities complying with all the expectations and the demands that they now get as an effect of the changes in sustainability. We also remind you all that we don't take. I'm sorry.
We have not included the sales and the backlog from Erichsen & Horgen in the figures that we are showing you now. Our major sales projects, it's another call off on the water supply for Oslo. It's another call off on a major project on electrification for Aker BP, NOA Krafla , Fornebubanen, big intercity railway, and two other road projects. Looking at the order backlog, we've had a good increase here, 10%, year-on-year, just normal fluctuations with seasons. We are seeing this is a stable and good backlog, and we're also seeing stable and good markets in all our business areas. As you can see, it continues to be building and properties and transportation. That's our largest business areas.
Taking you through organization and people, we are now 3,183 employees, an increase of 8.3% compared to the quarter in 2020. Majority of this is to do with the inclusion of Erichsen & Horgen , who came in with 245 employees. We are also of course very proud to have the winner of the Young Advisor of the Year, Richard Opsahl Resvoll. It's of course a confirmation of the very high skilled people that we have and an important area to attract also the best people. We have also won two awards. Deichman Bjørvika was winner of Building of the Year, and the road project was the winner of the Project of the Year 2021.
With this, I give you the word to Hans-Jørgen, who will take you through the figures.
Thank you, Grethe, and good morning, everyone. Nice to see you here at the Munch Museum. The third quarter ended up not exactly where we had planned. It has been impacted, as Grethe said, by a slow start of the quarter, a slow start in July as well as into August, where we saw that in September, the activity level picked up. Overall, the revenues ended up at NOK 679.9 million, which is an increase of 2.8%. Most of that increase is attributable to the inclusion of Erichsen & Horgen for one month. A very, very moderate organic growth. The EBIT was at NOK 46 million, which is a 6% margin, as Grethe mentioned. It is impacted by a few factors.
Of course, the billing ratio, which is significantly lower than we've seen recently, which is triggered overall by this kind of slow transition from after the summer, which is partially driven by internal factors, people coming back kind of to work and also some let's say, catch-up effects from that. Also, we saw a market which is a little bit slower on the customer side. It was as if there was some kind of a, maybe a post-COVID situation in the customers, among the customers to get projects started.
This is kind of driving this situation, but the good news is that it's things improved through the quarter, and September turned out to be a good month for our company. We also had a particular effect relating to the transportation segment in the Region Oslo, which, as Grethe mentioned, with the cancellation of the big contract at Mjøsbrua by Nye Veier, we had expected, we were maybe a little bit optimistic on our ability to replace that work with new work. Because of the summer situation, this happened just before the summer, the results in the transportation part of Region Oslo was low, actually NOK 15 million lower than it was in the same period last year.
Overall, for the transportation, the result is NOK 25 million lower than last year. Overall, our results for so far in 2021 is has a significant impact from what has been a lower activity level in transportation Oslo. We also have a moderate impact from the, as Grethe mentioned, from LINK, restructuring of LINK Sweden, which after the cancellation of two large hospital contracts in the first half, is going through a quite significant restructuring situation. We also have higher operating expenses compared with last year. That is a particular kind of periodic effect, which is the main driver for that. It's not a systematic change.
As mentioned by Grethe, the effects of the nextLEVEL is still with us. It's not that we're seeing that operating expenses are taking off. There is, however, one element which I would like to mention, which is our IT costs, particularly related to the cost of licenses, which has increased much more than we had expected when we kicked off nextLEVEL in 2019. This was expected when we did the budget, so it was not a big surprise for us, but it has impacted our operating expenses quite significantly in both the third quarter but also the year to date. Overall, in terms of our operating expenses, they are in control, and we're seeing more like periodic fluctuations in that.
When it comes to the year-to-date figure, the revenues came in at NOK 2,735.4 million, which is an increase of 1.5%. Part of that is of course to do with Erichsen & Horgen , but also a very moderate organic increase. The EBIT is at still at a good level, NOK 259.1 million, which is equal to 9.5% margin. Even though we were not happy with the third quarter, looking at this in perspective, 9% margin is a solid level. As Grethe mentioned, we believe we are on a steady course. We're not panicking because of the third quarter, which came out a little bit lower than we had had expected.
we still believe, as I said, that we are on a steady course. As I mentioned, operating expenses came in at NOK 300, other operating expenses came in at NOK 310 million, a moderate increase of 4.2%. Also part of that is Erichsen & Horgen . I also like to mention that as you can see from this graph, the NOK 94 million increase in employee expenses, NOK 25 million of that is one month of Erichsen & Horgen employee expenses. That is of course, it's not exactly comparing apples to apples, but that has an impact of course, on our employee benefits expenses.
The operating expense ratio, which was very high in the third quarter, partially because of our low revenue level, is increased from 15.8% to 16.1%, still at a much better level than we were before the nextLEVEL, before what we saw in 2017 and 2018 and into 2019. We're also there on a steady course. Of course, our target there is to keep that as low as possible. We kind of have an internal target of around 15%, and we will try to achieve that over the next few years. Order intake, as Grethe mentioned, is still at a good level, and the order backlog gives us good visibility for the next years.
This is another way of looking at the figures. I would like to particularly highlight the billing ratio at the upper right-hand side, clearly going down in the third quarter to a level which is significantly lower than we had expected. As I said, and as we have mentioned several times, it is partially an effect of a slow start after the summer, a little bit internally, but also in the marketplace. You can also see clearly that the number of employees has increased with the inclusion of Erichsen & Horgen for one month, which is September. We took them over. Actually, the acquisition took place around the 15th of August, the closing.
They have been included for practical purposes from the end of August. A few words on the segments. I already mentioned the Region Oslo in terms of the main challenge there, which has been the transportation segment. They're coming in with a good year-to-date figure. Revenues pretty flat with 2020, NOK 865 million. EBIT one hundred million compared with 135 last year. As I said, a significant portion of that is attributable to the transportation segment. The other segments within Region Oslo is generally doing pretty much on par with last year, which is very good news despite also there a somewhat slower third quarter.
The billing ratio keeps up at a reasonable level, but it's of course also impacted, the total is down because of the third quarter, which is down. Clearly you can see the number of employees is up, and that is because of the inclusion of Erichsen & Horgen business in that region. Region Oslo has had a good performance also in this year, coming in with a revenue of NOK 1.1 billion and EBIT of NOK 132.3 million, equal to a margin of 12%, which is only a little bit lower than last year despite also there a somewhat slower third quarter. A good performance overall by Region Norway. There are some differences within Region Norway. Some of them are doing on par, some of them are a little bit below our expectation.
As in total, the picture there is solid. They had good order intake compared with last year. Order backlog is stable. The billing ratio is a little bit below what we would like to see impacted by the third quarter. We also see a somewhat increase in the number of employees, and that is also part of the Erichsen & Horgen acquisition, their business in Trondheim, et cetera, and is included in the Region Norway figure. Energy, another quarter with somewhat low financial performance. We're still in a kind of restructuring phase. We're building it up. We still believe it has good potential for the future. We'll talk more about that during the Capital Markets Day.
The result is impacted by still restructuring ongoing in Multiconsult UK, which is contributing with some loss continuously. That is now we found a solution with Multiconsult UK, where we're taking down all the main staff functions and the number of people that remain in the UK is now limited to quite a few. It's just been an important restructuring that has taken place there over the last year, which will hopefully improve the results in energy over the next 12 months. Overall, we also see that because of the restructuring, the number of employees has come down by 13.2%, and that's part of how they are restructuring their business. Again, it's an investment for the future.
Their positions, their technology, and also their knowledge base is something which will be very important as we move into the future and where we see the potential in the green shift, et cetera, et cetera. LINK Arkitektur, another quarter. The quarter in itself was quite low. There is an improvement in the EBIT compared with last year. However, it's a very mixed picture. LINK Arkitektur in Norway is doing also well, a little bit lower than last year, but still doing a good performance.
The situation in Denmark is that they have moved from a loss situation to a break-even situation, whereas LINK Sweden, because of this restructuring, has done quite a bad year with losses in itself of about NOK 8 million so far this year. The total loss for Denmark and Sweden, for the year, is NOK 12.3 million. That is kind of a very mixed picture in LINK. We are very, very focused on the improvement process, which is now resulting in LINK Denmark having a moderate profit for the third quarter. We're doing actions in Sweden to improve things, including taking down the number of employees. Norway is still on a steady course.
A mixed picture, but overall, we are quite happy with the situation and hopefully as we move into 2022, things will stabilize also in Denmark and in Sweden. It will take a little bit of time for Sweden to come back at least into the black figures. We will do that as hopefully that will happen as quickly as possible, but it will take a little bit of time after the cancellations of two major hospital contracts in the first half. The international business, a good quarter, good first year, delivering a EBIT margin of 9.7%, with a pretty stable revenue.
A little bit impacted, there is actually underlying growth, but because of the strengthening of the Norwegian kroner, it looks like it's a flat revenue base. We also see that the order intake is on its way up. Strong order intake up 22.6%, largely driven by our business in Poland, which has been very successful in the market. The order backlog also as a consequence of that also going up quite a bit. Number of employees is up 12.5%, and the increase is mostly also in Poland.
I would also like to mention that our business in Ontario in Stockholm and in Sweden has had a good quarter, but a more stable situation in terms of number of employees and also order backlog. This is after the business areas have been reduced from seven to five. This is the split of revenues. 43% of our business is building and properties. Mobility and transportation is 26%. Industry is 12%, water and environment is 12%, and renewable energy is 7%.
This is done to focus our business to deliver even better solutions to our customers as we see that these business areas are really very much interlinked, and it's sometimes difficult to distinguish what's industry, what is renewable energy, and including also what's water and environment. This has been an important thing for us. We see that there is some fluctuations also in terms of the changes in revenues comparing the last year with this year. You can also see here that the mobility and transportation to which the transportation in the Region Oslo is included has had a reduction of 9%. Overall, in the long term, we're not worried about that. I will talk a little bit more about that during Capital Markets Day.
The outlook overall for the mobility and transportation is still good and stable. We've had this kind of a dip in terms of activity level, but we're expecting that to pick up as we move into 2022. A lot of things has happened during this year in terms of our financial position. We've made a major acquisition of Erichsen & Horgen as well as a couple of other smaller acquisitions. The net effect of that is that we've had a cash outflow of NOK 308.2 million year to date.
We paid what we think is a healthy dividend in May of NOK 215 million, as well as an extraordinary dividend last year. We're coming out of the quarter and the year with a solid balance sheet situation. We have total undrawn loan facilities of NOK 400 million, and we're within the gearing ratio 0.89. We've said that our target, which we will reconfirm at the Capital Markets Day to be between one and two, so we're very close to our target, which means that we have a solid balance sheet situation coming out of the quarter. I would particularly like to mention and talk about the working capital.
When I saw, as a CFO, that our working capital had weakened NOK 234.2 million in the first nine months, I got really worried. We had to make a really deep dive into that to see if there is any particular worry, some part of that, or whether it's normal fluctuations that we've seen previously between quarters. Fortunately, the good news is that it's not symptomatic of any weakening of our working capital in terms of things that should have been done differently. We see that the level of trade receivables is stable. Trade payables is stable.
What we have seen is that we have paid off significant amounts of public duties like VAT and tax during the first nine months. That's one factor contributing to NOK 108 million in terms of weakening. The other main factor is that the work in progress is seasonally high, which is weakening our working capital in the quarter when we measure it 30th of September by NOK 82 million. It's a big number, but in terms of whether it's something to really worry about from a management point of view or from a shareholder point of view, our conclusion is that these are normal fluctuations.
It's a major number, but these are, as I said, normal fluctuations within a quarter. The position was exceptionally low, by the way, last year. It had to do with COVID. It had to do with also changes in payment terms of public duties, for instance. Our work in progress at the end of last year was very low. Of course, we will continue to make sure that we invoice our customers, but this follows a normal pattern. Again, nothing to worry about. These are normal fluctuations.
In total, as I said, and to repeat that, coming out of the quarter with a gearing of 0.9, which is what we had expected when we acquired Erichsen & Horgen , and it's a very, very comfortable level, and we have a strong and solid financial position out of the quarter. I will finalize before we take a break before our Capital Markets Day. Just to summarize a little bit on the outlook. We still have good order backlog, and good visibility on that order backlog. The overall market, which we mentioned a few times, is good in all our business areas, stable and good. We're expecting significant investments, and we will talk a little bit more about that during our Capital Markets Day. That is good.
We are, as Grethe said, as we did a little bit in the third quarter, experiencing some uncertainty on, let's say, the post-pandemic situation. That is both internally in terms of some catch-up things that we need to do internally that we haven't done over the last 18-24 months during the pandemic. We're seeing that maybe on the customer, on the market side, there is some delays in projects starting up with project execution, which may cause, and this is why we're putting this in, it may cause short-term fluctuations in our results for the fourth quarter. We are on a steady course. The outlook is generally good, and we are quite optimistic about the future. Thank you.
To Hans-Jørgen, we have a question from Bengt Jonassen in ABG Sundal Collier. Related to billing ratio. You are back on the level before nextLEVEL. Should we assume that you are back on that level for the future?
Maybe Grethe should answer that.
The answer to that is no. I think we had a particularly challenging third quarter, but our ambition is that our billing ratio should be higher than 70%.
Okay, moving on. Before or during COVID, you said that the COVID effect on margin was approximately 1%-2%. Should we assume that effect was higher?
I think that's a bit too early to say, but if we adjust the figures for the COVID effect, we are 1%-2% behind where we were last year. There are some pluses and minuses in that calculation. One thing is the transportation segment that I mentioned a few times, which has performed significantly lower than last year, which a little bit really has not much to do with the COVID. We also have the IT costs, which have come up due to mostly the license costs from our major suppliers of licenses, and also something to do on the IT equipment side, which is impacting us.
I think overall what we said last year and what I think we consistently said last year, we had a performance, we had a COVID effect of 1%-2%, and we still believe that is the case.
Okay, thank you. Bengt, two more questions. Accruals seems to have an effect on the earnings more than what we should, what should be natural, when you compare the figures. Is there any or what is the structural reason behind this?
Yes, if you look at the full year, you don't see this periodic effect. The operating expenses in the third quarter of 2020 was very low, and that had to do with periodic effect. I think that was mentioned during the presentation, that we had an add back of some accruals from the second quarter 2020, which impacted results in that quarter in isolation. It does not impact the year-to-date figure, however. This is one of the reasons why it looks like the operating expenses are increasing significantly between third quarter this year and last year. If you look at the year-to-date figure, it's only a moderate increase. A particular effect relating to what happened in 2020.
Okay, thank you. Finally, where are you now on the underlying cost in relation to the nextLEVEL ambition?
I think, maybe also Grethe should say a few words on that. I think we are on track in terms of our nextLEVEL ambitions. In terms of our cost, we are doing everything we had planned to do. With one exception, which we did not expect, was the significant increase in the IT cost. I mentioned that a few times. The IT cost has increased more than NOK 30 million compared with last year. That is something we partially had budgeted for, but is also an effect of our suppliers' cost or pricing when it comes to licenses, to which we're a big buyer of computer software.
Thank you.
Grethe, would you like to add something to that?
Yes. I think chasing cost improvement, it never ends. I think that, but what we've said, we were not going to run another nextLEVEL program, but we have to include it in our operations, and we follow the same KPIs as we've had in the nextLEVEL closely. We also give the insight to the organization, and we are chasing improvements, all the time.
Okay. Yep. Thank you, Grethe and Hans-Jørgen.
Thank you.
Okay. That completes the quarterly report from Oslo, and we will be back for our Capital Markets Day in about 10-15 minutes. Thank you.