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Year-end report January-December 2021

Regulatory

Strong quarter with solid growth – both organic and acquired

October-December 2021

  • Total operating revenue amounted to NOK 588.9 million (445.7) an increase of 32.1%. Currency adjusted organic growth was 9.4% and growth from acquisitions was 26.6%.
  • Revenue from customer contracts amounted to NOK 583.6 million (444.0), an increase of 31.4%.
  • EBIT amounted to NOK 75.6 million (46.9) an increase of 61.2%.
  • Non-recurring items during the quarter amounted to NOK 0.8 million (–10.5).
  • Adjusted EBITA amounted to NOK 82.0 million (62.9).
  • Profit for the period was NOK 50.7 million (13.0).
  • Cash flow from operating activities totaled NOK 140.2 million (135.0).
  • Basic/Diluted earnings per share amounted to NOK 0.36 (0.09).

Statement from CEO Henrik Damgaard

“Our listing in December 2021 marked an important milestone on our journey building a European Lighthouse and market leader in Underground Infrastructure Maintenance. With the listing we raised capital of approximately NOK 900 million, making it possible for us to increase our pace in acquisition activities. This year-end report is our first report after the listing and it is confirming that we are on the right track.

During the fourth quarter of 2021, our business operations displayed continued strong growth with 9.4% currency adjusted organic growth and 27% acquired growth. Total operating revenue increased by 32% compared with the fourth quarter of last year, due to recent acquisitions in Germany and Sweden, and healthy organic growth in Norway and Germany.
Adjusted EBITA was NOK 82 million for the fourth quarter, an increase of 30% compared with last year and the adjusted EBITA margin was 14% during the fourth quarter of 2021. On the full year adjusted EBITA increased by 22% to NOK 258 million.

I am very pleased with the development in what in the future is expected to be our largest market – Germany. We saw a currency adjusted organic growth of 27% and growth in total operating revenue of close to 80 % during the fourth quarter and 126% for the full year. This strong performance was also driven by acquired growth of 60% in the fourth quarter through the recent acquisitions.
Our acquisition of Mayer Kanalmanagement in April 2021 has strengthened the market position in Berlin. Decker Group was acquired in June 2021, which, with its location in Hamburg, has secured our leading position in Northern Germany. The trend in Germany is very satisfying and evidence of our ability to implement our acquisition strategy in Northern Europe. Adjusted EBITA in Germany in the fourth quarter of 2021 amounted to NOK 36 million compared with NOK 17 million in Q4 2020.

It was also positive to see that the signs of improvements we have seen in the Danish operations in earlier quarters, materialized in a positive currency adjusted organic growth and improved adjusted EBITA in Q4 2021. Currency adjusted revenue growth in Q4 2021 amounted to 1% and the adjusted EBITA margin increased to 5%, compared to negative profitability in Q4 2020. The clear improvement is a result of the initiatives implemented. The development in Denmark in the fourth quarter confirms our belief  that Denmark is improving the adjusted EBITA from 2022.

As from January 1, 2022, we have implemented contractual price increases in line with various transportation linked indicies. Higher transportation costs mainly from increased fuel and energy prices has affected costs in 2021 and the price increases are expected to compensate for most of these cost increases going forward, so we claim to have good protection from possible rising inflation.

To summarize, we have acquired a total of eleven companies in the past year and a half, adding revenues of approximately MNOK 550. We paused acquisitions in the second half of 2021 because of the IPO process. Coming into 2022, our pipeline of acquisition candidates is strong, and we expect good acquisition activity level in 2022. Our vision is clear: We want to be the market leader in underground infrastructure maintenance (UIM) in Europe. We continue to strengthen our position through both acquisitions and organic growth to fully live up to our slogan: “We always help!”

We operate in a non–cyclical and a mission critical industry with market growth driven by, amongst many factors ageing underground infrastructure, increased regulation and climate change. We have a clear and proven consistent acquisition strategy, with 32 acquisitions completed since Norva24 was established. We operate in the European UIM market – a total addressable market of NOK 140 billion. With a large pipeline of potential acquisition candidates, and many ongoing dialogues with significantly higher acquisition capacity following the IPO, we are well on our way to achieving our financial target of NOK 4.5 billion in total revenue in 2025.

Our services are critical to the functioning of society and needed no matter what circumstances. The full Norva24 team has serviced our customers 24/7 throughout the pandemic in 2020 and 2021. Our core values are trust & passion, and in the pandemic years our employees truly showed how strongly these values stand in the organization. No matter what circumstances or restrictions our teams met, they managed to find solutions and help our customers. I would like to thank our employees for having carried out tremendous work for our customers.

Our maintenance of the underground infrastructure is a key factor for a sustainable future. Due to the climate change with more severe weather, the need for and importance of Norva24’s services are increasing. We work continuously to develop Norva24’s sustainability work and to secure the position as the leading player in our industry, based on the UN Global Sustainable Development Goals for clean water and sanitation and clean energy.

This is information that Norva24 Group is obliged to make public pursuant to the EU Market Abuse Regulation.
The information was submitted for publication, through the agency of the contact person set out below.

Webcast with teleconference at 09.30 (CET)

Webcast:
https://tv.streamfabriken.com/norva-24-q4-2021

Teleconference:
Dial-in number

  • SE: +46850558374
  • UK: +443333009031
  • US: +16467224956
  • DE: +4969222239166

Contact information

Stein Yndestad, Group CFO
Tel: +47 916 86 696
stein.yndestad@norva24.com

Sture Stölen, Head of IR
Tel: +46 723 68 65 07
sture.stolen@norva24.com
ir@norva24.com