Good morning, everyone, and welcome to today's presentation on Norconsult's first quarter results. My name is Egil Hogna. I'm the CEO of the company. I'm joined today by our CFO, Fladby. After the presentation, we will take questions. We will start with questions from our audience here in the auditorium, and then we will move to questions from those of you following us by video link. Norconsult is Norway's largest design and engineering company and one of the leading players in the Nordic region. We have approximately 7,200 employees, divided by 140 offices. We have a local strategy using our entire network in order to serve our customers. We are well-diversified with an exposure spread on 1/3 buildings and architecture, 1/3 infrastructure, 1/3 energy and industry.
More than half of our revenues are derived from public customers, while a bit less than half is from private customers. Every year, we have about 35,000 projects and 15,000 customers. In our time, this has secured a steady growth and stable margins. In the first quarter of this year, we delivered a 14% net revenue increase to a bit more than NOK 3 billion. Adjusting for calendar effects, the organic growth was 7%. In our business, it is necessary to adjust for calendar effects when you evaluate the underlying results because our costs during a quarter are constant while the number of billable days is different depending on the calendar and depending on when vacations and holidays occur.
Our adjusted EBITA for the quarter was NOK 331 million, but when you add the calendar effect, it was NOK 397 million, comparable to NOK 335 million. That gives also an adjusted EBITA margin of 12.9% when you take into account the calendar effect. Our order book remained approximately constant at NOK 7.6 billion. It is important to note that the very large win we had during the first quarter of the joint Arna-Stanghelle project is not included in this figure. That is classified as a frame agreement, but it is exclusive to Norconsult, and it is a very important foundation for our infrastructure demand for a number of years to come, and more about that project later on.
When it comes to people and organization, the number of employees increased by a bit more than 9%, to, as I mentioned, approximately 7,200, compared to 6,583 one year ago. An important organizational change happened in Denmark, where Jes Hansen took over as EVP for our Danish operations, coming from Sweco in Denmark. During the quarter, we also held, for the fifth consecutive year, our Norconsult Awards, where we celebrated our projects and the achievements of our staff in delivering outstanding projects and team performance to our customers. Norconsult Norway was also named a Career Company this year.
It's the first time this award is used in Norway. We were then nominated a Career Company like we have been for a number of years in Sweden, where this award has been handed out before. Our emission reduction targets were also improved by the Science Based Targets initiative, which verifies that we have both ambitious and well-planned targets for emission reductions over the coming years. In the first quarter of this year, markets were fairly stable. Buildings and architecture remained a bit subdued in the private sector. The public sector investments offset the somewhat weaker private market. The overall activity was stable in that segment. The infrastructure demand was good and stable, underpinned by the long-term public spending plans in the Nordic countries. Energy and industry was doing well.
In particular, in energy, we are experiencing very strong demand, particularly when it comes to hydropower and power lines. For industry, it was a bit more varied, but we have some particularly strong sub-segments, out of which data centers and the defense industry are the most important ones. When it comes to mergers and acquisitions, we are now almost completely integrated with the Aas-Jakobsen Group purchase. The main integration took place on the 1st of May, and we expect all of the training activities to be completed by the second quarter this year.
We are very happy to have the Aas-Jakobsen Group well integrated into our operations, and the cooperation with the Aas-Jakobsen team was one of the important reasons why we won the Arna-Stanghelle project. Metier was also integrated during the first quarter, but Metier will continue as an independent company. They have contributed in particular, very strong project management capability, which has enabled Norconsult to have a truly multidisciplinary expertise across all parts of building projects. Smaller bolt-on acquisitions continue. During the quarter, we have acquired a 50% stake in Concrete Structures AS, which is a specialist in structural engineering of concrete and floating structures. This is a joint venture together with Aker Solutions , where we will cooperate on concrete structures going forward.
Then I'd like to give you some typical project examples, so what we have won during the quarter. The first one is a complete replacement of the existing Tussa hydropower plant in Western Norway. This is a fairly typical hydropower investment these days, increasing the installed power capacity from 60 MW to 150 MW, which is essentially in order to compensate for the variability of wind and solar in both the Norwegian and the European energy system. Construction will start this year and is expected to continue for another approximately three years. Another important win was the renewal of the frame agreement for BYGST or Bygningsstyrelsen in Denmark. They are managing public buildings in Denmark, and we won the frame agreement for the Jutland part.
This is an important foundation for our building demand in Denmark going forward, both on the engineering and the architecture side. Another bridge example, the Alversund Bridge, also in the western parts of Norway, needs to be replaced because it has exceeded its technical service life, and this 200 m steel arch bridge will become another beautiful bridge on the Western Coast of Norway. On to the most important win during this quarter, the joint project, Arna-Stanghelle. This is a project with an exclusive frame agreement up to NOK 2.2 billion. It is the largest engineering contract which has been awarded ever in Norway and the largest which Norconsult has won. This project started with the first call-offs in the month of April this year.
As I mentioned previously, as it is a frame agreement, it is not included in our order book. It is the largest tunneling project ever in Norway, and it is one of the largest ever done in Europe. It consists of approximately 80 km of integrated road and rail tunnels, making it a real mega project. It also includes two new railway stations, evacuation tunnels, junction ramps, and cross-cut tunnels. It has a number of innovations, including how to dispose of waste rock in a very efficient manner. It is a project which has come about both for efficiency and speed reasons.
The most important reason is the safety on the Western Coast, on the western parts of Norway, because this is a landslide prone area where the new tunneling system will be much safer for everyone using this road and rail system. One of the important reasons why we won this project was our technological and digital expertise. This project will be another pioneering project when it comes to using a fully digitalized environment, using also artificial intelligence in order to increase the efficiency, productivity, and quality of this project. It will have a common data environment for all of the data flows in this project. Having this common data environment enables efficient data sharing during all parts of the project, all phases, including the operations and maintenance after the project is finished.
A number of tools will be used in this common data environment, using artificial intelligence in order to make sure we develop the project in the most efficient way, to the benefit of our customers, Bane NOR and Statens vegvesen, for this project. We will use artificial intelligence to improve the data flows and to make sure that we have the best solutions during the entire project. Artificial intelligence does not only mean that we change our work processes and how we work. It also creates demand for our traditional services. Data centers are essential in order to be able to have an increased use of artificial intelligence because this requires a very high data processing capacity.
When we look at Europe, the bottleneck in the grids is redirecting data center investments to the North, not only Norway, but to all of the Nordic countries. We see already a very high activity, and we expect more activity in the years to come associated with this. Another benefit is that the cold climate in the North enables very efficient cooling, which is important to have the lowest possible operating costs for these data centers. In terms of demand for Norconsult, we deliver grid connection substations and electrical engineering. We do permitting and environmental impact studies. We do the site civil, water cooling, district heating operations. We plan the access infrastructure, and we also do the owner's engineer project and program management.
This is an area with important operations and actual demand for us already. During the coming years, the expectation is that this demand might actually increase by approximately 10x compared to the already connected capacity at the end of 2024. Exactly how much will be realized in the end depends on a number of factors, including, of course, the access to power. This is a very important growth area for Norconsult going forward, and we have a large activity with the existing customers already. With that, I would like to give the word to our CFO, Dag Fladby, who will tell you more about the financial numbers. Thank you.
Thank you, Egil. Net revenue in first quarter ended at NOK 3 billion, up from NOK 2.6 billion the same quarter last year. The total growth was 14% and organic growth adjusted for the negative calendar effect of NOK -66 million was 7% in the quarter. The growth was driven by higher number of employees, increased average billing rates and also improved billing ratios. The billing ratio continued to improve and ended at 72.7, up from 71.5. Adjusted EBITA was NOK 331 million compared to NOK 335 million the same quarter last year. The underlying margin was 12.9% compared with 12.7%. The slight improved margin was mainly due to increased billing rates and also improved billing ratios, partly mitigated by higher costs.
The adjusted EBITA in Aas-Jakobsen was lower than last year, as billing ratio was also lower. That was partly due to significant work with integration. I will come back to that later in the presentation. Our net finance ended at NOK -40 million compared with NOK +3 billion the same quarter last year. The main reason for the increase is increased interest rates from the loans related to the acquisitions of Aas-Jakobsen and Metier. In addition, we have an unrealized currency loss of NOK -11 million in this quarter. We recognize that it's widespread amongst analysts on this item going forward. Hence, we guide on this one that the net finance, excluding any currency loss or gain, will be approximately NOK -20 million in the next quarters.
Profit after tax, NOK 194 million compared to NOK 257 million, with the main explanation is the calendar effects of NOK -66 million. The EPS was NOK 0.62 compared to NOK 0.85 . We are moving to the segments, we start with Norway Head Office as always. The net revenue ended at NOK 939 million, up from NOK 814 million. That is a total growth of 15%, whereby the organic growth was 7%. Aas-Jakobsen and the integration of Aas-Jakobsen Group has now been divided into two reporting segments, whereby Aas-Jakobsen Trondheim is reported on Norway Regions and the remaining part of Aas-Jakobsen is reported at Norway Head Office. The net revenue from the remaining part of Aas-Jakobsen contributed to NOK 94 million and in headquarter.
EBITA NOK 122 million compared with NOK 124 million, which gives an underlying margin of 14.9% compared with 15.2% the same quarter last year. As I mentioned, the EBITA in Aas-Jakobsen was negatively affected by lower billing ratio, partly due to significant time used for integration. The integration is estimated to have a revenue loss of approximately NOK 6 million for the total Aas-Jakobsen Group in this quarter. The win of Arna-Stanghelle will improve the billing ratio going forward for this operation. As Egil mentioned, the integration continues now into quarter two and will be finalized and completed at the end of quarter two. To Norway Regions. Net revenue of NOK 818 million, up from NOK 788 million. The organic growth was 4%, driven by increased billing ratio and also improved billing rates.
The billing ratio continued to improve versus the same quarter last year. EBITA in Norway Regions ended at NOK 85 million, compared to NOK 107 million, which gives an underlying margin of 13%, compared to 13.5% the same quarter last year. The EBITA includes non-recurring costs for relocation and also adjustment of workforce, in total NOK 7 million. To Sweden. Sweden had a net revenue of NOK 487 million compared with NOK 451 million. The organic growth was 7%, driven by increased FTEs and also improved billing ratio. The calendar effect was negative with NOK 15 million in the quarter, and that is linked to an adjustment of summer and winter work hours. The adjusted EBITA, NOK 36 million compared with NOK 40 million, which leaves us with an underlying margin of 10.1%, compared with 8.9% the same quarter last year.
The largest improvement this quarter is within the infrastructure due to a higher number of FTEs and also increased billing ratios. To Denmark, where our adjusted EBITA is NOK 12 million, down from NOK 17 million the same quarter last year. Adjusted EBITA margin 6% versus 8.9%. The profitability is below our expectation in Denmark, as we also reported in quarter four. We have done several measures during the quarter, which is starting to give effect. We have also done adjustment on workforce of approximately 20 people, which will start to give effect in quarter two and in quarter three. To renewable energy, which continues strong with our organic growth of 21%. The drivers behind the growth, the growth is mainly related to hydropower and transmission and other related businesses.
EBITA was NOK 50 million, up from NOK 43 million, which leaves us with an underlying margin of 21.1% compared with 19.6%. The main explanation for the strong EBITA margin is continued high billing ratio and also stable high billing rates. Finally, on consulting, on the segments, we have the consulting segments, which now consists of Technogarden, Digital, and also Metier for the first time. Total revenue was NOK 472 million in the quarter, up from NOK 288 million, whereby Metier contribute with NOK 230 million. The EBITA was NOK 28 million, compared with NOK 15 million the same quarter last year, which leaves us with a margin of 8.8% versus 8.1%. Digital slightly improved their profitability, while Technogarden is still struggling in a tough market.
We have continued to do measures in Technogarden during the quarter, and we have also done additional temporary layoffs in the beginning of quarter two and also adjustment of workforce to improve the profitability going forward. Metier contributed with NOK 12 million, and that is including cost for severance pay, which was part of our integration plan for the Metier. The integration of Metier is completed during first quarter. Now into cash flow. Cash flow from operation ended at NOK 189 million in the quarter, compared with NOK -53 million the same quarter last year. Last year included a payment for withholding tax related to the gift shares of NOK 160 million. Still an improvement this quarter. Cash flow from investment activities NOK -8 million, compared with NOK -58 million the same quarter last year.
The main explanation is that we have not paid out for any acquisition this quarter. Cash flow from financing activities NOK -304 million versus NOK -102 million the same quarter last year, where the main difference is a repayment of loans, one principal repayment, so NOK 60 million, and we also decided to pay additional NOK 100 million for the repayment of the loans. To our balance sheet, which is strong. I will just pick a few items. Cash and cash equivalents NOK 1.41 billion end of the quarter, compared with NOK 1.55 billion end of the year. We have net interest-bearing debt of NOK -281 million and a leverage of -0.27, excluding the IFRS 16.
Our net working capital is negative with -NOK 165 million, and compared with the same quarter last year, we had NOK +127 million. Finally, from my side, the order book, as Egil mentioned in the beginning, is NOK 7.6 billion. It's more or less stable from quarter four, at the end of quarter four , and order intake in this quarter has been a mixture of small and medium contracts and also call-offs from existing framework agreements. As Egil also mentioned, Arna-Stanghelle is not included in the order book. It will be included when we have call-offs, and that will happen in quarter two . By that, Egil, I leave the word to you.
Thank you, Dag. A few closing remarks and the outlook for the coming quarter. Overall, we expect the market to remain stable. However, we are seeing an increased uncertainty related to the international political situation, and that, of course, may affect the macroeconomic environment also in the Nordic countries. During previous quarters, we have seen a number of signs of improvement in the private market for buildings and architecture. In Norway, we have recently seen a small interest rate increase, and there is a risk that this may temper some of the positive signs we have seen during the last quarter. So far in the first quarter, we did experience a stable demand in this area, but we will see how that develops now in the second quarter.
The public demand, however, in this segment is still stable, and we expect that to remain solid going forward. Demand in infrastructure is good. We have talked about a number of important projects. We have one, most importantly, the joint Arna-Stanghelle project, which does create a solid foundation for our infrastructure activity for the coming quarters and years. When it comes to energy, we continue to see a strong level, and we expect this to continue to increase during the quarters going forward because the importance of energy security has become even more obvious during recent months. In other industry segments, we continue to see some variability, but all in all, the demand in this segment, we expect to continue to be good going forward.
Most importantly, in Norconsult, the flexibility to use our technical disciplines across different market segments is really important to us. We will continue to strengthen that flexibility, and we will take necessary measures when we need to adjust capacity to demand going forward. With that, I would like to thank you for this presentation and we now move to questions. We will then start to hear if we have any questions from the audience here in the auditorium.
Hi, Herman Caspersen from ABG. On your change in earning in the building and architecture segment, you also mentioned that increased geopolitical uncertainty may temper the improvements seen over the past years. Is that only something you anticipate or have you already experienced that?
We haven't really experienced that at this stage, but we know from experience that when the uncertainty increases, then it may have a delaying or postponing effect in that particular segment.
Okay. Thanks. Of course, you mentioned the Arna-Stanghelle agreement. Based on comments from industry peers as well, there seems to be a trend of a larger share of so-called framework in the total pipeline. How do you experience that situation in more general?
It's a fair statement that, there is indeed, a higher share of frame agreements right now. This is partly linked to the fact that, we see more projects linked to, refurbishing, rehabilitation, better maintenance than in the past. These type of activities are often, contracted with framework agreements rather than specific assignments.
Thank you. This quarter you deliver a negative net recruitment of employees. Can you provide any more color on what drives that? Is that temporary for this quarter? What's the strategy driving that?
Yeah. When I say negative, it's actually more or less stable. It's approximately zero. The first quarter is typically a quarter. We do not do a lot of recruitment because our main recruitment is the third quarter because that is when graduates typically have finished their university education. We do see a net growth during this year. The first quarter we have adjusted our capacity. A few projects. We have both seen recruitment and some planning during the quarter, resulting in a stable workforce during the quarter. For the year in total, we would expect to see an increase based on already entered contracts, employment contracts with students finishing their education this year.
Thank you. Finally from me on the ERP costs. Given the total costs that you guide for, they are quite low this quarter. Anything new on how we should think about phasing of the ERP costs this year?
Yeah. The ERP project started in February, so it's not a full month really. I think we should have the same phasing as we have communicated. Most of the cost will be in 2026. Rough estimate quarter two around NOK 30 million. It depends on the activity level in the project.
Perfect. Thank you, guys.
Thank you. Are there any more questions from the auditorium? No. We will move to questions online. Have you gotten any questions?
Good morning. We have quite a bit of questions online this morning. Starting with Nordea. What is the expected normalized margin contribution from Aas-Jakobsen and Metier once fully integrated? What would the billing ratio be on approximately this quarter, assuming normal run rates for Aas-Jakobsen?
Yeah, that was a fairly detailed and complex question, so I think I'll refer to our CFO on that one.
Yeah. I will start with Metier. When we published the deal, we had the, we also presented the adjusted EBITA. Now we have done the integration activity in quarter one where we have NOK 12 million, including, you know, you can say integration cost or severance pay a part of integration. I guess we haven't guided any similar margin of Metier going forward than we presented at the deal. When it come to Aas-Jakobsen, as we have communicated there, we have had some lower billing ratio, partly due to integration activity, but also partly due to too low order book before the integration. That will improve now when we have done the integration and start with the project at Stanghelle.
We expect the, you can say going forward, not in the first quarter, but on the longer term that that will be more or less on the same level as similar divisions and departments as Norconsult as Aas-Jakobsen was when we acquired it.
Thank you. A second question following up on framework agreements. What is the total value and the volume of signed framework agreements not captured in the reported backlog?
Yeah. That we don't report on actually. We don't have anything on that.
Move along online. We have some questions on SAB. Just NOK -1 million of other adjusted EBITA this quarter versus NOK -10 million for Metier and NOK -29 million last quarter. Any trends or drivers driving the variations on the other adjusted EBITA?
As mentioned the last quarter, that depends on the activity level. We allocate the EBITA to the segments based on, you can say a fixed monthly level. The activity level on the group is dependent on different strategies. It's not any specific for the year.
A second question. When can we expect Aas-Jakobsen and Metier to deliver growth in EBITA year-over-year?
Maybe I could answer to that. Because one of the most important effects and synergies we have experienced with historical acquisitions is the fact that they generate more demand also for other Norconsult services. We expect to see that the entire Norconsult system will benefit from these two from these two acquisitions. For example, the Aas-Jakobsen Group acquisition triggers a demand and a recruiting need for some other disciplines to complement the construction expertise in the Aas-Jakobsen Group.
We expect to see these benefits partly during this year and then more permanently in the following years. The same logic applies for Metier because we do see that the project management expertise, for example o n Metier is something which is very complementary to the services, Norconsult relating to engineering and architecture, for example, increase our total sales and demand.
Moving along to DNB Carnegie. Guide for net finance of around NOK - 20 million in quarters. Should investors view this as a new underlying run rate for finance cost, post-acquisitions, or do you still expect a meaningful realization lower from current levels over time?
Next quarters, our guiding is NOK -20 million. That will, including FX gains and losses. That will be lower when we pay down our, you can say, external debt related to the acquisitions. In the next quarters, it will be around NOK -20 million.
Moving along to Handelsbanken. Of the 7% organic growth, could you quantify how much is price, how much is volume, and how much is improved utilization?
We don't guide or report on details on it. Obviously, it's a mixture of everything since our billing ratio has improved by 1.2%. The billing rates are also increased, while the number of FTEs organically is, you can say, more or less around 2%. It's a mixture of all.
Still some negative impact from Aas-Jakobsen integration. Do you expect to be on a more normalized level on utilization from Q2, or could it spill into Q3?
The last integration activities are taking place right now in the month of May. That means that we do expect some reduced billing ratio also in the second quarter, but we expect a normalized billing ratio in the third quarter.
Handelsbanken also noticed that a strong margin in Sweden, if adjusted for SEK 15 million. Is the Sigma Civil still a drag on margin, or should we expect a lift in 2026 from cost synergies?
Sigma Civil is now performing on a normalized level as from the fourth quarter last year, so they are not dragging the margin. We have taken out the cost synergies from Sigma Civil. We did that in 2025. Now it's business as normal in Sweden.
That concludes our online questions.
Okay. I would like to thank again everyone who has followed both this presentation and Q&A session. We look forward to seeing you again at the second quarter presentation. Thank you very much.
Thank you.