Delivering on the M&A agenda, operations affected by fewer working days in Q1


Interim report January-March 2024

January-March 2024

  • Total operating revenue amounted to NOK 769.9 million (704.6), an increase of 9.3%. Currency adjusted organic growth was 1.6%.
  • Revenue from customer contracts amounted to NOK 758.9 million (700.1) an increase of 8.4%.
  • Adjusted EBITA amounted to NOK 52.3 million (59.4).
  • The period was charged with non-recurring items amounting to NOK 2.9 million (2.4).
  • EBIT amounted to NOK 37.5 million (46.0).
  • Profit for the period was NOK 21.3 million (32.6).
  • Cash flow from operating activities totaled NOK 44.2 million (45.1).
  • Basic/Diluted earnings per share amounted to NOK 0.12 (0.16).

Significant events after the reporting period

  • On April 1, 2024, the Danish subsidiary Thornvig Jensen A/S sold its waste and container business. The sale is not material for group accounts.
  • On April 17, 2024, Norva24 signed an agreement to acquire Vitek Miljø AS. The acquisition is pending approval of the Norwegian Competition Authority and is expected to be closed during Q2. This acquisition will add approximately NOK 120 million of yearly revenues.
  • On May 3, 2024, Norva24 announced the acquisition of Nordic Powergroup Holding A/S. The acquisition is expected to add DKK 138 million of yearly revenues.
  • On May 16, 2024, Norva24 announced the acquisition of Högtryckstjänst Syd AB. The acquisition is expected to add SEK 19 million of yearly revenues.

Good pace on acquisitions, strong first four months

Norva24 has continued to progress along our strategic path during the first months of 2024.

I am particularly happy to conclude that the last six acquisitions have added more than NOK 430 million of annual revenues, including Vitek Miljø and Nordic Powergroup that we announced in Q2. The acquired companies are of high quality, and have in aggregate an adjusted EBITA margin higher than the mid-term margin target of Norva24.

Our most recent acquisitions strengthen our market positions in Germany, Norway and Denmark. The Baier transaction is a step towards building more density in the southern parts of Germany, while the acquisitions of Vitek Miljø and Klungtveit broaden our geographical reach and customer offering in the western part of Norway. Högtryckstjänst Syd will strengthen our position in the southern part of Sweden. Nordic Powergroup and Kyrsting bolster our number one position within underground infrastructure maintenance in the Danish market.

Reflecting on the operations in the first quarter of 2024, the cold winter and reduced number of working days impacted our results. The number of working days was 5% lower in Q1 2024 compared to Q1 2023, hence the currency adjusted organic growth was 1.6%. Eliminating calendar effects by looking at the first four months of the year, our currency adjusted organic growth was 7.1%. The reduced number of working days has a significant impact on profitability in Q1, but for the first four months of the year we see an improved margin compared to last year.

We continue to take a targeted and systematic approach to operational improvement, with three strategic initiatives:

1. Price optimization, ensuring compensation for cost inflation

2. Improved utilization of vehicles and personnel

3. Close follow-up of underperforming branches through benchmarking, people management and firm action plans

We are confident that the structured work within each of the three strategic initiatives, combined with synergies from acquisitions, will support lifting our margins to the mid-term target of 14-15%.

Wrapping up, I’d like to reiterate the massive remaining potential for consolidation of the underground infrastructure maintenance (UIM) market. With more than 50 acquisitions behind us, Norva24 is the clear leader of this consolidation in Scandinavia and Germany. We will not stop there, and our pipeline of potential acquisition targets is rich. Our ambitious M&A agenda is underpinned by a strong financial profile, with a leverage rate (NIBD/adj EBITDA LTM) of 2.2 times, meaning that we are well equipped to keep up the pace of acquisition growth going forward to reach our 2025 revenue target of 4.5 bn NOK.

Combined with the strong megatrends driving our industry, this makes me highly optimistic about our value creation outlook, and I’m looking forward to reporting on the progress going forward.

Henrik Norrbom

Group CEO

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For further information:
Henrik Norrbom, Group CEO
Tel. +46 72 708 1515

Stein Yndestad, Group CFO
Tel: +47 916 86 696