Good morning, and welcome to the presentation of the results of the first quarter 2026 for Multiconsult. My name is Grethe Bergly. I am the CEO, and with me today is also our CFO, Ove Haupberg. Before I dive into the figures, just a brief reminder of who Multiconsult is. We are an engineering and architect firm with a history going back more than 100 years. We report in three segments. Multiconsult Norway, that contains our engineering business.
Architecture, that contains our four architect subsidiaries. LINK in Norway, Sweden, and Denmark, and A-lab in Norway. The segment International, contains Multiconsult Polska and our Swedish subsidiary, engineering subsidiary, Iterio. In the market, we operate in four business areas and all the subsidiaries and segments work across these four business areas.
Historically, the split between private and public clients have been 50/50, and over the past few years, we have delivered a profitable growth based on a robust business model and a diversified strong professional environment. Looking at the figures for the quarter, we had a good start of the year with a 5.5% growth, of which 4.4% was organic. Excluding calendar days, the revenue growth in the period was 8.4%. The billing rates increased compared to 2025. The EBITDA of NOK 160.5 million represents a margin of 10%, and adjusted for calendar effect, the EBITDA percentage is 12.4%.
We still have a challenge with cost increasing more than revenue. It is a positive development as far as the gap over the last quarter has been reduced. The sales in the quarter was good. Our ambition and commitment to strengthen profit remains firm. We work along the axis of the organization, effective business support, and cost control. Ove will go in more detail when it comes to the figures later on. The sales and order intake. The sales in the quarter has been good, with increased sales year-over-year and largely unchanged market condition, reflecting a stable underlying activity level. The increase, the trend on increased on defense-related opportunities continues.
Over a period now, we have seen that frame agreements is increasing as a preferred contract model, and the level of frame agreements is record high for us as a company. Please note that volume of frame agreements is not included in the reported figures, as framework agreements are not included in the reported order intake or backlog until call-offs are made. The sales on our largest frame agreements have increased more than 200% since 2022, and it doubled from 2024- 2025. We expect the level of 2025 to continue into 2026.
In relative terms, this represents at least NOK 1 billion to be added to the reported order backlog. In the large portfolio, the portfolio on large project remains stable and maintain good activity through 2026. We have a 4.5% growth in number of employees. As a company, we have strong beliefs in employee share ownership as a motivating factor. In this quarter, we have issued 6,600 shares to new employees, and a further strengthening of employee ownership program was approved by the general meeting with the introduction of a profit-sharing model.
On organization, it's worth mentioning the certification of ISO 27001, which is information security and in line with what we see as a very high focus area and requirements from our clients. It is always great to see how projects we participate in win awards and also the significance that our projects have in our society. Here represented by the unveiled foundation stone ceremony by our Prime Minister, Jonas Gahr Støre. With that, Ove, I hand it over to you.
Thank you, Grethe, good morning. We have a closer look at the numbers for Q1 2026. EBITDA for the quarter ends at NOK 160.5 million. That is a margin of 10%. The EBIT adjusted is NOK 160.9 million, and that is including the effects of Sotra Link. The bridge down right illustrates the change from Q1 2025. Starting to the left of that bridge, we saw that the reported EBITDA was NOK 190.4 million. We have legal costs and write-downs on Sotra Link on NOK 9 million, and the EBIT adjusted last year was NOK 199.4 million. Going further to the right on this, the net operating revenues increased by 5.5%, and that is explained by the increased capacity.
Growth in permanent employees of 4.5% or to 4,220. The corresponding growth in FTEs is even stronger, 5.6%. We also had improved billing rates. That is part of the revenue effects, also a negative calendar effect, NOK 43.1 million. That is due to two fewer calendar days compared to last year. Also had a small negative effect on billing ratio, 0.3 percentage points. As Grethe mentioned, reducing the gap compared to the gap in the previous two quarters. The organic growth, 4.4%, M&A activity on top of that, a growth of 4%, that is adding up to the underlying growth of 8.4%.
The operating expenses we can see has an increase, NOK 7 million or 4.5%. Also, the employee benefits increased by NOK 106 million, a 9.6% cost increase. The increase is at 4% of FTEs, which means that the underlying cost increase is in line with ordinary salary adjustments. This brings us back to the EBIT on the NOK 160.5 in the quarter. We have got quite a lot of questions on the Sotra Link project. All the information is provided in our stock exchange announcements given in the market the last few weeks. We also confirm that the net project write-downs landed well below 1% of net operating revenue also for this quarter, in line with last year. Showing the results per quarter.
Q in columns is in the dark blue color, and the results in the quarters is characterized by the numbers of available working days. Growth in net operating revenue from Q1 last year to Q1 this year, 5.5%. We see that top left. Also the rolling 12 months is positive by 3.6%. The changing billing ratio from Q1 last year to Q1 this year, - 0.3 percentage point. It's on top right. As commented, the gap compared to the gap last quarters has been reduced. The growth in permanent fixed employees, 4.5%, is shown in the graph down right. In combination with other revenue effects, change in employee benefit and other operating expenses, that gives us the EBITA margin of 10%.
In this graph down right, we also have illustrated the one-time effect per quarter in 2025 or write-downs on legal cost on Sotra Link. We also see the one-time settlement from a client in Q3 2024 and the reinforced share ownership program in Q4 2023. For the first time, we are provided the information per Segment in this presentation, starting with Segment Norway. This contains the previous segments Region Oslo and Region Norway, including Multiconsult Norge.
The four ViaNova companies, Sitepartner, Lifetech, and Multiconsult U.K. In this segment, we see improved performance compared to the same quarter last year. Net operating revenue has increased by 9.1%. The billing rates are improved and the capacity, the number of FTEs, has increased caused by the inclusion of ViaNova and organic growth. The positive effects are somewhat offset by the negative calendar effect that is NOK 38.7 million in this segment. Also the Q1 numbers last year included the legal cost of the Sotra Link project, NOK 9 million as commented on the first slide.
Moving on to architecture, the three LINK companies and A-lab, the performance in this segment is mixed. Although we see signs of improvement in the Scandinavian architecture market, there has been a challenging start to the year in many of our geographies in this segment, whereas other parts are performing better. In Q1, we have been in the process of adapting the organization to the market, causing a reduction in number of FTEs compared to Q4 2025, there are 12.5 FTEs as temporary layoffs at the end of Q1.
Primarily driven by a lower billing ratio, the EBIT ended at NOK 9 million, a reduction of 5.4 percentage points compared to last year. The calendar effect in this segment is at negative by NOK 3.8 million. International. Also as Grethe mentioned, this represent Multiconsult Polska and Iterio over Swedish engineering business. Net operating revenue is in line with Q1 last year. There are signs of improvement in the Swedish engineering market, whereas the Polish markets still sees competitive pressure affecting pricing. Increased employee benefit cost and other cost weakens the EBITA margin by 1.7 percentage points compared to last year.
The calendar effect, in this segment, slightly negative, by NOK 0.5 million. As always, the slide you are waiting for, the financial position. Starting to the left, we had a positive cash at NOK 37 million at start of the year. We have a cash flow from operation positive by NOK 136 million. We also see the IFRS 16 effect. The change in working capital negative by NOK 11 million, but that is bear in mind that the numbers last year was NOK -224. Also on investment activities, negative on NOK 15 million, that is investment in software and computer equipment. Also cash flow from financing negative by NOK 15 million, and that is interest on loan. Also including the IFRS 16 effects, we have a positive cash at the end of the quarter by NOK 126 million.
Also to the right, our net interest-bearing debt, NOK 697 million, a gearing ratio of 1.87, still well within our financial targets. The last page from me, this is the free cash flow slide. The definition of free cash flow here is cash flow from operating activities minus cash flow used in investments, but excluding acquisitions. In the dark blue bar, we can see cash flow from operating activities positive by NOK 180 million, and cash used in investment activity is NOK -16, shown in the green line, giving us a net positive cash flow of NOK 164. The last 12 months, free cash flow on NOK 371, and that is the light blue line. The change from Q1 last year is mainly related to the change in working capital. Grethe, I'm handing back to you.
Thank you, Ove. Looking at the market structure, the gross revenue in the four business areas follows the same trend as we've seen in the last quarters. Development in line with the market situation. High activity in energy and industry, stable in the other three business areas. The distribution between the business area remains fairly stable. In the recent presentations, we have often highlighted examples of projects that we have won that support our strategic ambition. This time, I want to dive a bit more detailed into the strategic ambition of urban transformation. Urban transformation is complex and represents an area where our multidisciplinary excellence really proves its value. With Multiconsult Norway, LINK and A-lab working together, we develop new services.
One great example of how synergies between engineering and architecture disciplines create new services and market opportunities is the work we are doing for the work A-lab and Multiconsult is doing to develop a solution for Bane NOR to assist them in designing rail services on users' terms. Bjørvika in Oslo is a good example on how shared digital models can play a major role in area development.
For more than 20 years, Oslo City Council and ViaNova have used a common 3D model to bring together map, data, planning information, property details, technical infrastructure, and building models in one platform, enabling new developments to be assessed against what is already in place, enabling up-to-date view of reality, which again reduces errors, improves efficiency, and support better decision-making. The solution is now being applied on other urban projects and including Lilleakerbyen in Oslo.
The first quarter in brief, good start of the year. We remain focused on profitability measurements. There is good sales in a highly competitive market. We maintain a solid market position and order backlog, and the leading position in defense-related engineering and architectural services was strengthened. If we go to the outlook, the overall market remains unchanged, with several new opportunities in the pipeline. There is continued uncertainty regarding the timing and investment decisions. Defense, energy, industry, and infrastructure remain the key drivers. Building and property market is expected to remain challenging. Leaving the first quarter, we maintain a strong market position, a solid order backlog entering the remainder of 2026.
As this is my last quarterly presentation as CEO of Multiconsult, I want to take the opportunity to express my gratitude for the trust given to me, and a big thank you to all the people who have supported me on the way. Few leaders are given the opportunity to be part of the improvement journey that we have had since 2019, and that I have had the privilege to lead. It's been a team effort, and the strength and the courage of the executive team has played a major role in the same way as the support from our previous Chair, Bård Mikkelsen, and our current Chair, Rikard Appelgren, and the rest of the board. I have enjoyed the perspective and dialogue with investors which have contributed to the development of Multiconsult. We must never forget that Multiconsult is above all built by people.
People driven by professional curiosity, strong sense of responsibility, and the will to succeed together. On this foundation, the group is well prepared for the next phase, and I'm confident that Karsten Warloe has the qualities needed to lead the organization and deliver the group's targets and ambitions. From me, a big thank you. Good luck to Karsten and some of you then we will see again in August. That completes the presentation. We open up for questions.
Yeah. We have, Magnus Rasmussen, SEB. You show a slight increase in the EBITDA, year-over-year adjusted for calendar this quarter for the first time in a while. Can we expect improvements to accelerate in the coming quarters towards your margin target in 2027?
What we have communicated is that we, our target is to remain stable in 2026, and also then make the adjustments that we need to make sure that we are fit when we leave 2026 to continue into 2027 with the profitability targets that we have set. I don't know if you want-
No, as you mentioned during the presentation, we are working on adapting the organization to the market to have a more efficient support organization and also look at cost in general. We have already communicated some changes on that. I think the last communication was today on changing the setup in Multiconsult Norway somewhat. This is continuing and in line with plan.
Yeah. Thank you. Martine Kverne, Nordea. She has three questions. Can you give some more color on the progress for reaching 10% EBITDA margin target? What are the specific levels to get there? Question two, competition and pressure on margins. How have you seen that evolve over the last year? Number three, can you give any quantification of the total unbooked volume sitting in signed framework agreements that is not reported in the backlog?
I'll start with the last one, the answer is no. I did indicate, given, if you go back, with the volume we have, you could add NOK 1 billion. That's in that area, actually. When it comes to What was the first question? That was Ove, you remember?
That's the-
Yeah
...some more color on the progress for reaching 10% margin.
Yes. Yes. Yes, we are working on that in all over business. We mentioned architecture with adoption of Astonda. We have 10 less FTEs during this quarter, and then it's continuing, and the same goes for the rest of the organization. As I said, it's already communicated some changes in that. We are working in line with what we have said on that now for the last three quarters.
Good. The last one was competition and pressure on margin. How you've seen that over the last year?
Well, I think we've communicated on, in all the quarterly reports now that there are pockets of the markets where competition is high. I think that's one of the areas we've seen is within building and property. The advantage we have is that we do not necessarily have to compete in the most margin-pressured areas. We are also seeing that there are maybe less competition in smaller projects, so that we are now trying to address different market segments to avoid the head-on competition.
Yeah. Thank you. [Jeppe Børseth] Arctic. Billing rates tracked, salary adjustments this quarter. To what extent is it sustainable in the current competition environment, and how should we think about the pricing power going forward?
Do you want to do that one? The, at least in Norway, we are seeing that salaries have increased higher maybe than the situation on competition should really allow for. We need to see how we adjust our employer, the mix of the employees that we have. We are also a part of the society that we live in. That's why this has been challenging for a while. When you get cost increase higher than that. I think we are just really following the development. We are looking at how we can adjust our organization in line with the projects that are available.
Yes. This quarter we have framework agreements that has regulations starting of the year. As we have communicated before, the normal adjustments are J uly 1st in line with the salary increase the last year. Those mechanisms are still in place. The pricing, it always depends on the market.
Thank you. [Jeppe Børseth] again came with another question here now. The billing ratio has declined year-over-year for five consecutive quarters. What are the key drivers behind this trend, and how are you addressing it?
I might say, see it a bit different. The billing ratio two quarters ago had a difference compared to the last year of 1.1, Q4, 0.8, and this quarter, 0.3. Basically we are getting closer and closer to the previous year, that is also showing that the improvement measures continuing are giving us some level on this. That is also the plan going forward.
That completes the questions from the room.
Questions? Any questions in the room? No. We say thank you all for coming here, for those who's sitting in the room with us, and thank you to all of you who are listening in. Have a nice day.
Thank you.