Interim report Q3 2023

  • Revenue 792.2 MNOK (612.0)
  • EBIT 110.1 MNOK (76.6)
  • Cash flow 131.8 MNOK (133.3)

Interim report January-September 2023

July-September 2023

  • Total operating revenue amounted to NOK 792.2 million (612.0), an increase of 29.4%. Currency adjusted organic growth was 7.8%.
  • Revenue from customer contracts amounted to NOK 785.1 million (610.6), an increase of 28.6%.
  • EBIT amounted to NOK 110.1 million (76.6).
  • The period was charged with non-recurring items amounting to NOK 0.9 million (1.1).
  • Adjusted EBITA amounted to NOK 124.0 million (86.7), up 43.1%.
  • Profit for the period was NOK 70.4 million (49.8), up 41.1%.
  • Cash flow from operating activities totaled NOK 131.8 million (133.3).
  • Basic/Diluted earnings per share amounted to NOK 0.39 (0.27).

January-September 2023

  • Total operating revenue amounted to NOK 2,296.2 million (1,746.9), an increase of 31.4%. Currency adjusted organic growth was 6.7%.
  • Revenue from customer contracts amounted to NOK 2,277.4 million (1,732.7), an increase of 31.4%.
  • EBIT amounted to NOK 223.9 million (176.4).
  • The period was charged with non-recurring items amounting to NOK 7.7 million (6.7).
  • Adjusted EBITA amounted to NOK 266.1 million (207.5), up 28.2%.
  • Profit for the period was NOK 159.7 million (126.2), up 26.5%.
  • Cash flow from operating activities totaled NOK 309.4 million (199.9).
  • Basic/Diluted earnings per share amounted to NOK 0.87 (0.69).

Significant events during the January-September 2023 period

  • Norva24 acquired NRC Gravco in Oslo adding NOK 90 million in revenues and further consolidating Norva24’s position in the Oslo and surrounding area.
  • Mikael Smedborn assumed the position as new CEO of Sweden from April 1, 2023.
  • Henrik Norrbom took on the role as Group CEO from September 18, 2023.

Significant events after the reporting period

  • Norva24 has acquired Baier Rohrreinigung GmbH in Germany and ControTech i Malmö AB in Sweden. Through these acquisitions the Group has added approximately NOK 85 million of revenues.

Uniquely positioned in a market with long-term growth prospects

Having joined Norva24 in September, I’m truly encouraged by the strong performance reflected in my first quarterly report

Revenue growth in the third quarter was strong at 29 percent, of which 8 percent currency adjusted organic growth. We have improved utilization and cost control significantly, leading to adjusted EBITA margin improvement of 1.5 percentage-points to 15.7 in the third quarter. The Quarter-on-Quarter EBITA margin improvement was 5.9 percentage-points. The report demonstrates the strength of our model and resilience even in a market with weaker macroeconomics.

When I was looking at Norva24 from the outside the company stood out as well positioned to benefit from the long-term secular growth of the Underground Infrastructure Maintenance services (UIM) market. Now that I have had the opportunity to travel to many of the Group’s 75 branches and meet with both operators, administrative staff and the management group I am even more excited for the prospects of the industry and am convinced that Norva24 has a great opportunity to strengthen its leading market position.

The long-term trends driving Norva24s market are as strong as ever:

  • Sewers in our core markets are on average more than 40 years old, and are in need of significant maintenance and renewal in the years to come
  • Climate change and extreme weather require upgrades and increased maintenance
  • Authorities impose stricter regulations, driving infrastructure investments

As the UIM leader in the Nordics and Germany, we are uniquely positioned to leverage these trends. Norva24 continues to operate through a route based and decentralized branch model which has been key to our success. Norva24 has long-standing relationships with local SMEs and regional customers and is one of few operators able to serve both national and international customers.

The UIM market is one that benefits tremendously of structural changes, and Norva24 has been the main consolidation driver in Northern Europe for many years. In total Norva24 has conducted 45 acquisitions, and our refined M&A strategy, which includes screening of targets, the acquisition process and integration of acquired companies is expected to create significant shareholder value. Our M&A pipeline remains rich, and we expect to continue to deliver on this growth driver going forward.

The combination of strong organic growth, strong balance sheet and solid cash conversion puts us in the driver’s seat when it comes to consolidation of the UIM industry, and we will be able to fund our communicated growth plans based on our own cash flow.

In a period of macro uncertainty, it is reassuring to see evidence of Norva24’s resilience to economical fluctuations. Our services are mission-critical, and we have a large share of public customers. The long term trend is showing strong growth with limited impact from the overall economy.

With a more short-term perspective, there are three areas that will be of special importance to me. These are:

  • Price optimization
  • Improve utilization
  • Right people in the right place

Our vision remains clear and achievable: We want to be the market leader in underground infrastructure maintenance in Europe. We will continue to strengthen our position through both acquisitions and organic growth to fully live up to our promise to our customers: “We always help!”

Operating in the European UIM market, with a total addressable market of more than NOK 140 billion we have a clear number one position in Northern Europe, a market worth NOK 36 billion, our growth prospects are strong, and we are fully committed to our financial target of NOK 4.5 billion of revenue by 2025 and an adjusted EBITA margin of 14-15 percent mid term.

During the third quarter of 2023, Norva24 has seen activity levels in most branches picking up after a weak second quarter with modest growth and activity. This combined with better utilization of personnel and equipment has led to a strong uplift in margins compared to the second quarter this year and the third quarter last year.

In Q3 2023, Norva24 achieved a strong total revenue growth of 29%. Currency adjusted organic growth was solid at 8%. The adjusted EBITA was very strong at NOK 124 million, an increase of 43% up from NOK 87 million last year. The increase is broad-based, with Norway increasing their margin by 5.3%-points and Denmark by 3.5%-points. During the quarter, the extreme weather had a positive impact on the business due to increased demand for UIM services. The direct impact on Norva24’s activity is modest, with an estimated added revenue of NOK 8 million or 1% increase of revenues in the quarter, and a profit contribution of approximately NOK 3 million. We do believe that extreme weathers will have a long-term impact on the operations, and that it will increase the awareness of the important role the Underground Infrastructure plays in our society as well as the importance of day-to-day maintenance of it. The back-log of investments in the Underground infrastructure is considerable in our markets, and historical renewal rates are considerable lower than the required rate going forward to maintain the state of the Underground infrastructure.

Cash flow from operating activities was good at NOK 132 million with a cash conversion of 67% of our Adjusted EBITDA. The high activity level of August and September has lead to a build up of accounts receivables that will result in cash flow in Q4. Year to date the operating cash flow is up 50% from NOK 200 million in 2022 to NOK 309 million in 2023. We are comfortable with our financial position, excellent cash flow and a leverage of 2.1x LTM adjusted EBITDA at the end of Q3. During the last 12 months we have had cash flow from operating activities amounting to NOK 453 million. This is providing us with significant headroom in relation to our financial covenants in the financing facility. We currently have NOK 488 million available in the credit facility to enable continued strong M&A pace going forward.

We have over the last weeks acquired two UIM companies, one in Germany and one in Sweden, and we are currently in several due diligence processes expected to be signed during the coming months. We have a solid pipeline of potential acquisitions and remain confident that we over the coming years will be able to deliver on the overall revenue targets and increase the M&A pace.

I assumed the position, as Group CEO as from September 18, and the first two months have really strengthened my belief that we will be a European market leader within the UIM service Industry.

Henrik Norrbom Group CEO

“Three areas of special importance going forward are; price optimization, improve utilization and ensure we secure the right talent in key roles.”

Webcast with teleconference at 09.30 (CET)

To participiate in the conference and see the phone numbers, please go to link below

Webcast/Teleconference :

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

Stein Yndestad, CCDO and IRO
Tel: +47 916 86 696

Dean Zuzic, Group CFO
Tel: +47 414 33 560


Jul-Sep Jul-Sep Jan-Sep Jan-Sep Oct 2022- Jan-Dec
NOK million 2023 2022 2023 2022 Sep 2023 2022
Total operating revenue 792.2 612.0 2,296.2 1,746.9 3,015.7 2,466.5
Growth – total revenue, % 29.4 13.1 31.4 21.6 29.1 21.8
Adjusted EBITA 124.0 86.7 266.1 207.5 337.2 278.6
Adjusted EBITA margin, % 15.7 14.2 11.6 11.9 11.2 11.3
Adjusted EBITA growth, % 43.1 19.6 28.2 18.2 16.5 8.1
EBIT 110.1 76.6 223.9 176.4 259.2 211.7
Cash flows from operating activities 131.8 133.3 309.4 199.9 452.7 343.3
Cash conversion, % 67.4 90.7 64.8 52.3 73.6 66.0
Net debt (at period end) 1,275.5 1,083.9 1,275.5 1,083.9 1,275.5 1,074.1
Net debt (at period end)/LTM adjusted EBITDA 2.1 2.1 2.1 2.1 2.1 2.1
Earnings per share (basic and diluted), NOK 0.39 0.27 0.87 0.69 0.95 0.76