Multiconsult ASA (MULTI) Earnings Call Transcript & Summary

Thank you. Welcome to the Capital Market Day for Multiconsult 2021. My name is Grethe Bergly. I'm the CFO (sic) [ CEO ] in Multiconsult, and I will start this presentation. And during the day, we will get our CFO, Hans-Jørgen Wibstad. And we will also get a presentation from 2 of my colleagues, Heikki Holmås and Bjørn Thorud. When we decided to keep our Capital Market Day here in this museum is, of course, because we've been a big part of the realization of this magnificent building. We also then asked the museum, how could we frame it in something that is related to Munch? And of course, a Capital Market Day is about looking to the future, is having a vision. And they came up with this wonderful quote that Munch actually wrote to his friend: "Had I been in possession of the as-yet-undiscovered little remote telephone which one carries around in one's pocket, you would have long ago received communication from me." And apparently Munch said this in 1913. I would call that vision and is a reflection of a person who is quite progressive. And of course, so -- also to some extent, Munch challenged his surrounding is -- in his time. And I think that's a wonderful quote to take with us into this day, but we have -- when we set out our strategic direction, we've -- needed to have a vision to understand and think what would the future look like and what's the position we as a company would like to take in this. Today, I will take you through -- this is Multiconsult, give you a bit of what has happened since the last time we had a Capital Market Day and also some of the foundations of what Multiconsult is. Then Hans-Jørgen will take you through the market more in detail, what we're seeing, before I start giving you insights into the strategic direction that we see for the next period. And then Heikki will give us some insight into sustainability. And Bjørn Thorud will give us an understanding of the energy transition that we're facing just as we're standing here today. Hans-Jørgen will then finalize with the financial targets, and we will take question-and-answers. And for those present here today, there will be some lunch and also an opportunity to have a look around in the museum. Just for the figures year-to-date. We are coming in at NOK 2.7 billion, is a slight increase from 2020; and an EBIT margin of 9.5%, which is in line with the ambitions that we have expressed for the margins. Our order intake is NOK 3.2 million (sic) [ NOK 3.2 billion ], slightly down from last year, but in this is an inclusion of a cancellation of a rather large transportation project. And our order backlog stands at NOK 3.3 million (sic) [ NOK 3.3 billion ], which is an increase, so we leave this quarter from a solid base going into the future. Our share prices, yesterday, it was NOK 180, is an increase of 85.6%. Of course, this value creation is very important for our owners, our investors, but it's also extremely important for us as a company to have the foundation and the freedom to develop and grow. Multiconsult consists of just over 3,000 value creators. We have a very highly skilled workforce. More than 65% holds a master. And it is an extremely important part for us, to maintain these highly skilled people, to be able to supply our clients with the service that they require and the impact we want to have on the future. One of the major events over the last period is, of course, the acquisition of Erichsen & Horgen. Both Erichsen & Horgen and Multiconsult are known for their highly skilled people, the quality that we deliver. And we have a very, very high and reputable position in the market. They are 2 companies with a long tradition in Norway, and together, we now will capture all the possibilities that we see coming from the green shift; from issues regarding energy, environment; and also with respect of working together for the future with digitalization. I will take us to just a short looking back of how have we come to where we are today. And Multiconsult is a company that has a large footprint in Scandinavia. And -- but we also have quite a significant business in Poland and we are present with an ownership in Tanzania. We execute more than 10,000 projects every year with 4,500 clients. And we have, of course, a significant footprint in the places where we have a presence, but we have also quite a significant footprint through the expectation of expertise internationally, and that is mainly in the area of renewable energy but also within oil and gas. And just a brief tour now of some of the projects that we have been involved with and working with during the last year and who has actually completed this year. And it's natural to start with this building that we're in at the moment, the MUNCH museum, started in 2010. Even then, they had quite a high ambition with respect to sustainability. And that's probably one of the largest effects that we see are changing the way we need to look at projects and the way we work and also the way that our clients are being challenged at the moment. Almost a neighbor to the MUNCH museum is the main library in Bjørvika, again big building, has won 3 awards. We have been involved with all the engineering in this building. Another magnificent building, I think, is the coastal express museum. Architects here are LINK. Multiconsult has been the engineers. This is Norwegian history. This is the ships that went up and down the coast no matter what the weather was like. And it was an important part of actually building Norway and developing the areas. And I myself have a mother who always says she's been seasick on this ship an awful lot. Still to be empowered, some of the projects that we've won that we are just working on at the moment. The Sotra Link is a private-public partnership. It's the largest contract ever awarded by the Norwegian authorities. It's the consortium of 3 contractors, an Italian and a Spanish and a Korean. And Multiconsult is going to be doing the majority of the engineering on this project, almost NOK 20 billion. Construction City is just on the vicinity of Oslo. The clients here are having a vision of creating an innovation center, drive collaboration, thinking another ways of working. LINK has been the architect. Already 3 of the major players in the construction industry have said that they will move their headquarters here, and LINK has been the architect for this. This one is a pedestrian bridge, won us an architectural competition. Reason for showing it: In the old days, this would have been steel. In the really old days, it probably would have been wood, and now we're back to wood. The seeing, using different materials is an important part of the way we need to develop our skills also for the future. And I would like to show you now some of the project for sustainability has been a major part of the project because this is showing how we are positioned also to be a part of the solution for the clients in the future. This one is a hospital in Denmark. It has some aspects of sustainability with respect to the use of materials and energy, but it has also an aspect of social responsibility with respect to sustainability. And as you can see, it's been awarded the best future hospital. It's a fantastic position to have and to understand also what sustainable socially means for the future. This one is a 0 emission building, laboratory in the north of Norway. It's a 0 emission plus house. It creates in its lifetime more energy than it uses. And it's a full-size living lab where they're trying out different solutions on the use of energy. They have lots of different materials that they're using. LINK has been the architect. Multiconsult has done a lot of the engineering. The road project highway 3/25. It's the first road project in Norway who got the standard of CEEQUAL excellence. Skanska decided to go for a higher level on environmental footprint than the client. And we managed to reduce the CO2 emission by 25% compared to a normal project; and it still came in at cost, on time. This one may not look like much, but this might be the thing that really is going to help society avoid costs when it comes to climate risk because, what we're seeing, water is probably one of the major challenges that we have, and to be able to locally find solutions that doesn't wash away the infrastructure that [ we have ] built. And we are seeing more and more of these projects all around Norway, yes. And it's going to -- the climate risk is a major challenge for us. This is an example of offshore wind. It's a project for Equinor to supply electricity to 3 of the fields out in the North Sea. And it's a typical example of how we use the skills that we had in oil and gas to the solutions that we need to provide pure energy. Northern Lights, some of you might have heard of it. It's an onshore CO2 terminal. It's the first of its kind, where they actually transport CO2 by ships to this terminal that pump it through pipes into the reservoir. And we believe that this is how Norway can be part of the CO2 solution going through the carbon capture and storage that we require, yes. And the last one I would like to show you is a school. We do a lot of schools. And again clients are now more and more demanding on the CO2 footprint and the climate footprint that the projects have. And this is then reflected in the use of materials and the energy solutions, so any school and any building probably in the future will have a large part of it in using materials like wood. The solar would be a natural part but also storage from the ground to provide energy. So that was a quick journey, wasn't it? [ We call this a ] winning philosophy. For those of you who have followed us now for a few years, you know that we started off in 2019 where we needed to do a turnaround of the project -- of the company. And it was important then to set out the direction for the whole of the organization to explain, okay, what are the stages that we need to go through to get to where we want to be. And we started off just getting insight and control; understanding where we were standing; and fully seeing the figures; enabling the organization to understand, yes, this is where we want to go. Then we have -- for a while, we spent stabilizing the operations. It was a lot to do with making sure we were winning the right project, that we'll be using the right resources, that we've got control of our portfolio. And then we started the journey of increasing profitability, and we saw that -- the real effect of that came at the start of 2020. And we've had a very good 6 quarters now where we've been on this stabilizing and increasing profitability. And we are now in a position where we need to start growing, where we need to start maintaining the profitability to be able to develop and not least to deliver on the promises. So this is the very important message that we are setting out in our own organization. And one of the things that I've worked quite a lot on is taking back, revitalizing the vision that we have as a company. And our vision, bridging the past and the future, in this lies how we are going to use 100 years of experience to be a driver for [ always ] making improvements; to use the capability and the competence that we have in the organization, yes; and to always drive to make good, sustainable solutions. Another important aspect for us as a company is the social responsibility that we have. We say that we will create value to society, enable progress and contribute to sustainable development both for the present and future generations. And it is through the projects that we execute that we actually make our footprint and develop and make our contribution to society. And through this, we have created our business idea that we will make it easier to develop and realize value creation projects with a life cycle perspective. It is no longer enough for us just to deliver the engineering skills that we have. We see that we need to take a role and to be a player in the whole of the value chain that we are part of. Our clients expect a more holistic approach, and we need to be able to meet the requirements and the demands and the need for sustainable solutions. We need engineers that are able to take a life cycle perspective. And we are not going to be able to do this on our own, so a large part of what we will be working on in the next period is to make sure that we are drivers for the partnerships that can give the good solutions to our clients. And to do this, we need that culture that we have on empowerment. A united team moving towards a common goal will ensure that both our and future generations can continue to do what we're best at: to make the impossible possible. And we do that through our people, through cooperating to continuously develop and to continuously seeking new challenges. And on the core of this is, of course, enabling our employees to succeed. So to develop the tools, the methods to make sure that we are always on the forefront of knowledge, to be the company that attracts the best brains because there is a fight for the brains at the moment, by doing that, we will maintain the strong position that we have. And this is the foundation for us now going into the next strategic period, but before we give you the strategy, Hans-Jørgen will give you some more insights into the various markets that we operate in.

Thank you, Grethe. Good morning to those who didn't participate in the third quarter presentation. My name is Hans-Jørgen Wibstad, and I am the CFO of Multiconsult. I will go through the market; just a small repeat on the order backlog, our sales in this -- for this year. And after that, I will go through the major outlook for our various business areas. We had good sales and good order intake for the year overall, as total sales has been NOK 3.2 billion, which is at a good level. In the quarter, as I mentioned during the quarterly report, it's somewhat impacted by the cancellation of one contract, but overall the picture is good. And it continues a good trend that we had over the last 12 to 24 months in terms of sales. We also see that in between the regions. We see that it's a healthy increase in the 2 most -- largest areas, within Greater Oslo area as well as Norway. We see a somewhat reduction in Energy. International, I mentioned that, the third quarter, the Poland business is growing rapidly. And we see a somewhat reduction in LINK, also related to the cancellation of 2 contracts in Sweden during the first half of the year. The backlog is at a healthy level up 10% from last year, indicating that we are at a high level. It has come down for a few quarters, 3 quarters now in a row, but we consider that to be natural fluctuations in terms of especially the larger contracts. As mentioned by Grethe, we have a lot of big -- smaller contracts, but we also have the -- some major big ones. And they, of course, big -- make a big impact on our total order backlog. We also see that it's a healthy increase in the Oslo area in terms of the order backlog, which is very important. Norway is at a stable level, and also, Energy, stable level; and International growing, with especially the Polish business doing very well. We have a lot of clients in Multiconsult, as earlier mentioned, but we have some really blue chip clients. And of course, many of you know this, but we have, of course, the big public clients like the Oslo kommune, Bergen kommune, Stavanger. We have Bane NOR as a key client. We have Statens vegvesen, Statnett, Sykehusbygg, Statsbygg, Forsvarsbygg. These are very, very important clients for us. And then on the private sector, we are working very closely with some of the larger contractors like Skanska, Hæhre, Veidekke, AF and NCC. And especially on the oil and gas, related to renewable, we have Aker Solutions, Equinor and Aker BP. So a blue chip client base on top of -- in addition to all the smaller but also very, very important clients. So we're proud of that. It's a good position to be in. We have a strong market position in Norway among the key clients. The overall market outlook for Multiconsult remains good. I mentioned during the third quarter that we also -- third quarter presentation that we saw a somewhat slow startup in the market during the third quarter. There is some post-COVID short-term fluctuation and uncertainties in the market that we may see in the next first 2 -- 1 or 2 quarters, but the overall market outlook is unchanged. And it is good. It's driven by the state budget. Of course, very important for us, what's happening on the governmental side, where we're seeing that the activity level is continuing at a good and high level. There is an ambitious state budget, so we will be able to contribute to realizing all the -- many of the ambitions of our politicians and the society as a whole. And we're also seeing, which is very important for us and I mentioned a few times, the shift towards the green sustainability investments. We're part of that. We're part of the solution, and we will benefit from that as we move forward over the next few years. The national transportation plan is very important for us as it is for all the players in our industry. We're seeing also ambitious plans for -- in terms of investments into infrastructure, road, railway, et cetera, et cetera, which is good for our business and which is good for the -- for our clients as well as the contractors. And that is an ambitious plan, but we're seeing the ambitions being at a high level. We're not seeing overall that it's going to continue to grow very, very aggressively, but it is -- continues to be at a high level and we're seeing that. We believe that overall -- as -- overall the -- we will see a somewhat pickup in the overall activities from 2021, into 2022 and 2023. We're also seeing, which is also important, that municipalities, which is a -- one of the key clients, public clients, for us, is also picking up activity. So overall what we're seeing, that the total normal, let's say, organic growth in our market over the short to medium term or -- [ sort of ] medium to long term is maybe 3% to 4%. It's a mixed bag, of course. It's a good outlook, but it's not going to grow aggressively. It's a stable, solid, we believe, sustainable outlook for our business. I -- we briefly mentioned that we've reduced our business areas from 7 to 5, which is that we're doing that in order to be able to focus on this new market that we're seeing in terms of giving the best solutions to our clients in terms of being part of the solution and in terms of what's happening on the green transition and also on the sustainability side. These are our ability to offer a wide set of services is very, very important that we're not doing just one little piece but that we're able to combine all our capabilities when we're offering to the customers. So this is the background for what we're doing. Of course, we took out the Oil & Gas. The Oil & Gas, to start with, was not really oil and gas. It was -- turned out to be more in terms of sustainable solutions for clients like Equinor and Aker in terms of their green shift, so it was unnatural for us to have Oil & Gas as a separate business area, just to give you one example of that. This is the split where we're -- I will go through now the various business areas in terms of the outlook in more -- somewhat more detail just to repeat that building and properties is by far the biggest business area for us; Mobility & Transportation coming in second; and with Industry growing rapidly, as with 12% Water & Environment. Grethe mentioned several times the shift, the important things in terms of the environmental impact of the climate change, in terms of water management and having control of the impact of the climate change. That is 12%. And of course, the Renewable Energy currently at 7%. The building and property is by far the largest region for us. We see a good market going forward. We're not seeing aggressive growth, but we're seeing that a lot of the -- both in the short and long term, we're seeing stable growth, stable outlook. We see a shift towards sustainable transformation, rehabilitation and modernization of existing buildings. We're seeing major public sector projects coming up. There is still some work to be done in hospitals. We do have some major contracts already that will be going on for several years on the hospital side. We're seeing an office and retail market to change with experience of COVID-19. And we're seeing that, as I said, the market is stabilized. It's a good market, a stable market. And we're there, especially also with the acquisition of Erichsen & Horgen, to drive and be a big player in this market in the next few years. Mobility & Transportation. Again we can see that the sales year-to-date has been better than last year. We've mentioned a few times that the results in this area have been impacted by certain cancellations and what we believe is short- to medium-term fluctuation in activity level, but the long-term outlook is stable, good. We see a lot of investments from the national transportation plan and the state budget in Norway. The outlook there is good, and we are well positioned to take our fair share of those projects. So overall a good outlook. There is, of course -- some of these projects are very large, which makes us somewhat vulnerable in terms of the timing of exactly when the contract is awarded. So this is why maybe this -- as we saw, as we've seen in 2021, this area is more vulnerable to short-term fluctuations. It's more like bigger, larger projects. And if they are delayed by 3 or 6 months or canceled, which we've seen, it impact -- it may impact the short-term profitability, but the overall outlook is -- again, it's solid. It's robust and it's good but no aggressive growth in that, but it's continuing at a good level. The Industry sector. We've seen a significant increase in the sales from 2020 and 2021. And that is driven to a large extent by the green shift, the energy transition, where we play a major role in supporting our customers in that. And we're seeing that the -- with the increased sales, we're also seeing that this will continue both in the short term and in the long term. And we're growing that business. And they have good growth and good profitability actually also, and we are quite optimistic on this position as we move forward. We're well positioned and being part of all the things you read about in the -- or read about in the newspaper, electrification, CO2 -- reduction of CO2 emission, et cetera, et cetera, the transition into electrical power. So that is a positive. And we've seen an unusual increase in that activity level internally over the last year. Water & Environment. We talked about that a few times. We're well positioned. We have large contracts, including the new water supply to Oslo which will be -- that will be with us for a few more years, but leveraging on that position, we're seeing that the changes, the climate change and the requirement in terms of public investments into the sector, will be something where we can contribute with our people, with our ambitions and also with our technology and knowledge, so we are quite optimistic. We have already a strong position and we think that we will be able to leverage that as we move into the next few years. On the Renewable Energy, a little bit of the same position. We are in this kind of transition internally, a transition phase. Bjørn will talk a little bit more about that later when we talk about the energy transition that we're all in and the society is in. At the moment, we've -- we are -- we have had somewhat reduced activity, but for -- the long-term outlook also there remains very strong. We have very strong capabilities. We have very strong people. We have a strong team and we will continue to invest in that sector. We are strong in solar. We're strong in wind. We have capabilities within -- to cover most of these areas for us, so overall we are quite optimistic. We also have this international footprint when it comes to our Renewable Energy, where we have activities not only in Norway and the Nordics but also in Africa, especially Eastern Africa, and a little bit of a footprint in Asia. And we're -- we have seen historically in the last 12 to 18 months that, that has been impacted quite significantly by the COVID. It's not been very attractive to work a lot in Africa during the last, but we're seeing that, that is picking up. And we have some interesting positions there with -- that we've had for a number of years, for decades. We've had this position and geographic footprint in Africa, and hopefully, that will -- we will see over the next few years that we will be able to leverage more on that and that we will see increased activity from a -- quite a low level in the last 12 to 24 months up to a more sustainable level as we look into the future. That was market outlook, quite an optimistic view. Stable, good activity level; gradual growth 3% to 4% overall is what we believe in terms of the organic growth in the market. Thank you.

Thank you, Hans, again. Looking now into the strategic ambitions that we set ourselves for the next period. The starting point is an important one, that value creation is maximized when all players are jointly able to deliver comprehensive solution with a life cycle perspective. We are beginning to look at solutions in a very different way, I would say, than we have previously. And you are going to hear today life cycle sustainability quite a lot, but there is no doubt that this is such a major driver. And we do know that the way we create value in our industry is not the most efficient in the way that we're working together, so the understanding of this has been a very important foundation for how we're thinking in the future. And there are 4 major drivers that we need to understand when we now go into the next strategic period. It's how globalization [ with -- and ] urbanization is going to affect the areas that we work in. By 2050, 64% of the population is going to be living in cities. It's going to mean something on how they get designed, how they get their energy, how they use resources. And we think in this there are a lot of opportunities. Digitalization is an enabler, but it's also a driver. We need to understand, how will that affect our clients? How will it affect the way we need to work? And how -- will it give opportunities as the same times as we have to face the threats to our business that it also might face? Sustainability is probably the strongest driver, the green shift, but it's a driver and we need to find what is our position in helping the world really on facing the challenges that we need to solve. And it's one of those areas where no actor can actually find the solution on its own, but there are lots of opportunities also created from the challenges that we see from the sustainability perspective. And last but not least is our own industry. We are facing changes within the business models. We are facing changes in the way that we are expected to deliver more holistic solutions, the way the contracts and the business model of the players. And we are also facing some new actors entering our business, which is quite natural because it is an attractive business. Our industry is the largest mainland industry, and in this perspective we also need to look at the value chain. This is the central figure here. To a large extent, this value chain hasn't changed in 100 years. We do know there are lots of relay exchanges that are not efficient that we cannot continue, that one parts does one bit and then they deliver to the next part who continues. And then there's a lot of duplication of work. And not least, we are losing some of the opportunities of creating value in a more holistic view. And in particular, as we start looking at circular economy, we need to think differently of how we work in this value chain. And we need to find our place, what we would like to have as our place. And then last then is, of course, the way we work as consultants and the way we work as architects. We are, to some extent, seeing that in some projects we are being marginalized; at the same time, that the skills that we have and the knowledge that we have is required to find the good solutions, to find the project that is the best project and the best solution to our clients. And on the other hand, we are also under threat because the way that we are valued is really just the price of the hour that we spend. So we are an industry where the relation we had to value is not easy to -- defined. And we need to look at how do we create a position for ourselves where we look at value creation in the team, with other players to maximize the solutions and the value to our clients. And based on this, we have defined 5 areas that we want to work in for the things that I've talked about previously. That is the society that we're in. That's going to form us, and we then need to take out 5 different areas. We're looking at our clients. Our clients are faced with new challenges. They are expecting and wanting suppliers who give them a much more holistic solution, but we don't have that player in the industry at the moment. We have clients who are facing huge challenges on how they are going to meet the demands on environmental issues. They are getting demands also on the reporting. They need to find new solutions to the projects that they want to develop, and they also need new skills. We have an industry that needs to change, an industry that needs new skills, an industry that needs to find new ways of working together and an industry that's being challenged because it has had a low productivity development over a long period. We also see that -- the climate. To find a strategic position, we need to find where are we going to find the solutions that support the drive for better solutions with respect to the climate, to finding solutions that have -- help reduce the CO2 emissions that we're facing. And in this we also need to look at our own employees. That's the most important asset that we have: How are we going to prepare our people for the new future? How are we going to prepare our people to make sure that the skills that they have is also relevant in the future? And how are we going to prepare our people? And how -- what are the people that we want to attract to be able to give to our clients the solutions that they need for the future? And the third -- the last one is the X, and the X is the unknown. The X is how we have to prepare, that there are new solutions. We need to innovate. We need to have a faster innovation speed than we have today, so we need to prepare our organization on the innovation. And we need to also make sure that we are out there seeing the opportunities and picking up the opportunities when they arrive. And based on this, we say that our strategic position in the long run is that we enable value-creating projects. When the customers succeed, we succeed. We shape the industry, as an integrating player. We want to take an active role in that value chain to create the partnerships; to provide the holistic view to our clients; to be able to see a project from A to Z, not only the part that we are normally involved with. We want to be the preferred partner towards the green shift. We create an environment where competence is nurtured and thrive. And last, we challenge tradition and recognize opportunities to innovate new business. And when you take these up against the business idea that I talked about earlier, that we will make it easier to develop and realize value creation project with a life cycle perspective. If we face all these strategic position, we will be that player that will be able to put together the partnerships. We will work with the most competent and reputable players; and together we'll create opportunities, solve challenges and remove barriers in order to realize value-creating projects with a life cycle perspective. We enable successful projects. And from this, we have defined 5 areas of strategic priorities that we will work with in the next period. And the first one, we shall become the industry's solutions architect. It will require people and skills and tools to deliver the solutions as a team, not only as one subject at a time, one discipline at a time which we have had a tradition for. It means acquiring new skills. We shall forge powerful partnerships. In the future, we will have fewer partners, but we will have much stronger partnerships. And we already have a history of partnerships that we see have been the benefits of both parties, yes; and has created some unique opportunities for us over the last 20 years. One of them is, for instance, the partnerships we have had with [indiscernible]. We shall establish an innovation incubator to accelerate new business. We need to innovate faster. We need to innovate in a more systematic way. We need to be able to have a larger turnover of ideas and also to develop the new ideas into new products. And fourth, we shall grasp market opportunities unleashed by society's transition towards a sustainable energy solution. This transition is happening right now. There are huge changes in the market. We have the skills. We have the clients, and we just need to use these to leverage on the new opportunities that derive from this. And we shall strive to leverage the opportunities presented by digitalization in our industry. And just to give you some examples. Looking at an incubator: There are 3 types of innovation that we are defining. One is to be more effective at what we do. Then it's the sustainable innovation to make existing business more relevant. And then it's the third one, the transformative innovations. And the first 2, we will do in the sort of core business, but the last 1, we will actually take out and do on a group level and also in [ future ] with some funding to make sure that we are able to also create new business, yes, in the transition. And we have already launched this thing called [ Alinea. Alinea ] means the beginning of something new. It's a process. It's a tool. And it's the people to support because most people who work with us are not used to driving an innovation process. Another example, on the transition of energy. It's a new battery factory. It's Equinor and Hydro, who are considering building a large battery factory in Norway. Idea here is to use renewable energy to sustainable production of batteries for electric cars. Again we are using all the knowledge that we already have from the industry, yes, and from renewable energy to create this and be part of creating and helping the client realize this project. With respect to digitalization, we are seeing that we are creating new partnerships, new partners that we would not have thought about maybe thinking of as partners and making alliances with just 10 years ago, but together we now create new solutions. We help each other develop new products and on a very different -- in very different areas. The Autodesk is, of course, about nurturing the data that we already have, helping us be more efficient in the way that we work. This 7Analytics is Multiconsult's first investment in a startup, again where we're seeing mutual interest being able to develop brand-new solutions to our clients using the skills and the knowledge of our engineers, yes, along with more software engineering and knowledge. And then Telia: For most of us, Telia is a mobile supplier, whereas we found, working with Telia with developing smart buildings, we are able to provide to our clients totally new solutions that none of us had thought about previously. And then I will take you through some more detail into the market strategies. So this is the -- this was the overall 5 dimensions that we will work on in the next period, and I will take a more -- dive into the market. And the market strategies defines where we're going to work but also what position we want to take within the value chain, yes, in the 5 business areas that we operate. And this is quite a busy one, but within building and properties, our aim in the future in the next sort of 5 years is to leverage in the leading position of the transformation of buildings. We're seeing that we can come in a lot earlier in some of the projects, in particular towards property owners, to supply them with services all the way from an idea until the building is standing but also helping leverage on the running of the building and in the end also when we want to go into reuse. And there's going to be a lot of rehabilitation in the building and properties area. Mobility & Transportation, it's about consolidation really, like Hans-Jørgen said, but there's going to be some massive changes in the way we think about transportations within cities and the way mobility is done in cities. And here we can see new opportunities and we are already positioned to assist in these. Water & Environment, climate risk. An area that we're seeing is a growing need for assistance solutions, but also within biodiversity is being more and more often mentioned. I'm sure you've heard that. We have lots of people skilled in assisting on that. And ensure solid water and sanitation infrastructure, huge improvements required, huge investments; and we are prepared to take those opportunities. And then Industry, utilize our complementary expertise. We have been in this -- we've been a major player in the industry for over 100 years and seeing now how we can use the skill in combination with Renewable Energy, so here we also see a lot of cooperation. And then the Renewable Energy, strengthen our solid position within renewable energy market nationally and internationally to take part in this energy transition that we see. I would also like to mention LINK. Link is the biggest daughter in Multiconsult. And for them, this strategic position that we are aiming at is mainly then related to the building and property market. LINK is a large player in the architect industry. We have 500 employees in Norway, Sweden and Denmark. And LINK is actually among the world's 50 largest architectural firms, so it's a substantial business that we have and within the areas of architecture, interior design, landscaping and planning. And their strategic task is then to make it easier to develop and realize architectural projects in a seamless value chain for property developers and project owners. And again it's being this player that takes away some of the hindrances that we are seeing in our value chain, and their ambition and focus is to become the natural first point of contact for property developers and project owners. And in the same way as Multiconsult engineering part, the architects are also working in the value chain from very early insights and analysis all the way through to detail engineering. And for this period, LINK will work in the segments of housing, urban transformation, trade and office, health and hospitals and education. And finishing off. Value creation is maximized when all actors are jointly able to deliver comprehensive solutions with a life cycle perspective. By collaborating with the most competent players, we will jointly ensure a seamless project implementation and an interconnected value chain. By taking a new market position, we seek to increase our value creation for society, the clients, project owners and Multiconsult. And it is through our projects that we create value. And with this, I would let Heikki give you some more insights into factors affecting the green shift.

I think maybe we should take a 10-minute break here from Oslo. So we're on -- back on schedule, and I think that's good for everyone, if that's okay for you. So we take a 10-minute break. [Break]

Yes. We're back, sorry. And now we will move on to the next subject. It's by Heikki Holmås, and it's sustainability in Multiconsult.

Thank you very much for the opportunity to speak to you on how we intend to use the opportunities that lies within the green shift and also how we work on the topic in what we do. So the way we perceive sustainability in Multiconsult is that we feel it's the right thing to do. We're a company with 100 years long tradition. We aim to be a company in 100 years' time. And for a functioning company, we need a functioning world. So that's why we need to take care of our environment. That's why we need to take part in upholding how society works. And this is why we subscribe to and have taken on the pledge and taken on ourselves to contribute to achieving the sustainable development goals. We have to also -- because this is -- we feel that the regulators are coming up with new regulations. The policymakers, be it the European Union, be it our national ones, are imposing new regulations in order to achieve these sustainable development goals. And we also see that the first movers in the market are there, pressuring on, pushing us on, but also asking from us, "Do you deliver the sustainable solutions for the future?" And that's why we feel that this is also a profitable role to take. Because if we are the first movers, if we are the ones who develop sustainable solutions, we will be the winners in the market. And on the other side, if we are lagging behind, only being able to deliver of the minimum criteria that the regulators set, we will lose out in the long run. And we feel here that, as I say, both the markets and the regulators and our employees are demanding increased efforts on sustainability. You can see here, the European Union with their European Green Deals are, in my opinion and in our opinion, the strongest movers on regulations in the world, and it also influences on us. We also see that, of course, the market actors are pressing the issues on sustainability of us for these reasons, but also for the wrong reason on how they want to adapt to the changing environment. And thirdly, our employees are actively engaging and demanding and asking us on how do we engage, how do we tackle, how do we follow up on our taking on the sustainable development goals. Now this is the EU regulations on the taxonomy that we expect will impact on how the market will work and where financial capital will flow in the years to come. Of course, you sit with the solutions of, what can I say, the answer to that question. But we have definitely taken on ourselves that we will work on it and be in line with that taxonomy. But we've also gotten a new government with maybe what I would call the most ambitious climate targets that we have seen from a government platform, though still not in line with the 1.5 targets that the government has taken on and, as we speak, are working on in Glasgow. In sum, this means that we see a market for sustainable solutions growing in Norway and for the way that we conduct our business. And we are not only -- we don't want to be only on the receiving end of this. As a big actor in Norway, with being as one of the top listed actors on the Oslo Stock Exchange with lots of super-competent employees, we have an obligation also to influence on how the market works, what kind of regulations will be in place to promote sustainable solutions, how should the market work in order to -- for this sustainable future to actually happen. And let me give a couple of examples on that. Where now the former government had the technical demands on buildings and constructions and real estate, [ out on hearing ], we take a role on saying -- stating clearly that this is not in line with the 1.5 goals that the government has taken on themselves and pledge that they will work on. Together with other actors in the market, we are actively promoting regulations that will lead for the built environment to deliver and be Paris-proof in our solutions. When we are -- when the government have ambitions on developing offshore wind in Norway, we are there with our competence and expertise saying that, "Well, we need to move up and step up in our efforts to deliver on this," and we propose solutions of how that can be done. And we challenge the big entities in the construction sector in the road making and the railroad making, saying that "You need to step up your efforts and lift your thresholds on what you -- what is possible for the actors in the business to deliver on and what to demand from us because we are able to deliver overachieving on those demands that you are currently setting in the market." This is the way we want to use our competence to influence on the market and move in a greener direction. As Grethe said, sustainability is a mega trend, and we see it as a mega trend, 1 of 4 key trends. And this is -- and delivering on that is very much in line with our vision. And as you can see on our vision, as I've highlighted here, 2 key aspects on our visions is important to us when it comes to sustainability. And this is -- I mean this is our vision from 2015. So we were early out stating clearly that sustainability is part of our core business. The 2 key topics I would bring up is that we will promote sustainable development. We take it on ourselves in our projects, in our dialogue with our clients, our customers that we promote sustainable solutions that they should know that if they come to us, we will be there and push sustainable solutions as part of the core of what we deliver to them. But of course, it's them to decide what kind of opportunity they will give to us. But we believe that in an active dialogue with our clients, we will be able to deliver better on sustainable solutions because the clients are now more actively engaging on delivering this for themselves. Now as we speak, Glasgow is occurring. The climate summit in Glasgow is going on. And we know that from what has been announced beforehand -- from beforehand, we know that as we are today, the commitments by the politicians are not in line at all with the 1.5 target that they have set out for the world. We are now currently going towards 2.7 degrees, which is a world that is not possible for us to do business in a relevant way in 100 years. So it's a challenging time. But we see that the politicians are increasing their efforts to strengthen the target, the goal of delivering 1.5 and reducing or hindering global temperature to increase more than 1.5. And we see cities and companies being the first movers and strengthening their efforts, which is quite encouraging, in my opinion, because delivering on solutions by companies will also make it a lot more easy for politicians to move afterwards. And this means strengthening the efforts towards 1.5 degrees would also mean a rapid decrease to 0 emissions as soon as possible. And that is something that we aim to deliver on and contribute to in the years to come. We have 3 pillars of our ESG efforts. It's in our operations, it's in our business, and it's how we influence on society. And let me first say something about our business because as I stated, we aim to promote sustainable solutions as part of what we deliver to all our clients. And in that dialogue with our clients, we hope that they will also take on the obligations and take on the proposals that we have in order to deliver. And then we can use our expertise and our sustainability competence built up over very, very many years to deliver on that. And how will this reflect in what we do? Now you probably know this lady. She is not as known a Donald Trump here in Norway, but she is far more important to how we do business. This is the President of the EU Commission, Ursula von der Leyen. And the European Green deal, as I stated, is promoting a green shift that has not been seen the like of in Europe and in our market. But the regulations on finances and the regulations on all the different aspects of society and renewable energy and on CO2, the phasing out of CO2 will be important macro drivers in the years to come. And we aim to set the baseline for our taxonomy compliance and taxonomy performance in this year and next year. And we aim to increase our share of revenues that are taxonomy-compliant; and b, in the utmost tier among our peers. So that is what we aim to do. But of course, this is regulation that is still in the making. So we will see how our baseline is in the 2 years to come, but our ambition is to go in that direction. And that is something that the financial market and the capital market now can monitor very closely in a much better way than has been possible before. Now what about our operations? Well, most of our operations, most of our climate emissions comes from the indirect emissions. But it's being as part of shift, the network shift in Norway, we are already taking on the obligation to be climate-neutral by 2030. And we see that as an obligation that we will work on in our direct emissions and our emissions from our energy use up to 2030. And we aim to commit to the science-based targets to cut our emissions year-on-year in line with a 1.5-degree target, together with other big actors like Yara, Orkla and Aker Solutions that take on similar obligations and will push this on in their supply chain in the years to come. So we will be able to deliver to them because we are also taking on the same kind of obligations. As Grethe mentioned, we see an increased demand in environmental sustainability from many actors in the market. Fornebu -- the Fornebubanen public transportation, the Fornebu Lane, the floating offshore wind and 0 emission energy building and also on the climate adaptation efforts. This, we expect, will increase in the years to come. And we will use our influence, and that's the final thing I'm going to say, we will use our influence, as I said, because as we are a big actor and as we are also enabling solutions that have not been seen before, like, for instance, [indiscernible], we show that what was earlier perceived as impossible to be possible. And we all know that regulators, policymakers, other actors get inspired by each other. We all know that when our neighbor bought the first electric car in the -- when the first electric car in the neighborhood came, many were skeptical. But when you see that it works, well, then it's much easier to buy an electrical car for yourself as well. And this is the same that we do in our projects. When we are able to show that what was previously thought of as impossible, now is possible, it's much easier to scale it up as a solution for society. This is what we do. We will also, through our engagement in Skift, Klima 2050 and in Zero Emission Neighbourhoods, we share the knowledge within the business, within the sector and are able to increase the total work and the total environmental output by sharing knowledge. Knowledge is there for sharing. And by sharing knowledge, we are able to deliver on a better society and also learn from others that they're able to move and who are first movers in their field. And as I spoke -- talked about that by actively influencing on our decisions makers, we aim to move the rules of the game in the built environment so that we are able to play in a greener market. And we believe that we will be able to capitalize on that. And by doing common initiatives in the business, for instance, on recycling, which has been really difficult in the built environment, by moving on common initiatives in the built environment, together with other actors, we are able to increase the bar and lift the bar for what should be something that is compulsory for everyone to do in the market. And by that, I will end my speech and my presentation on what we do in sustainability. And give it a word to one of our specialists, he is a PhD in Hydrogen from many years back, an early mover, now able to deliver sustainable solutions to lots of clients out there. He is a specialist in energy system and are thereby -- and in photovoltaics and are thereby, these are key competences in enabling the transition, the green transition and the energy transition that we all know is happening right now. And I give the word -- the floor to Bjørn Thorud.

Thank you very much, Heikki. Thank you for listening. The energy transition, my talk today, I will try to explain that to you, how it affects Multiconsult and what is our role in it. And I'll try to explain by using an example from something more familiar perhaps to most of you. To the right here, to my right, your left, you have the traditional media, which used to be something tangible, a magazine, a newspaper that came in your mailbox, could also be radio or TV. But anyway, that moved on to Internet when the Internet came. It pretty much looked the same, but it was a bit faster, more accessible, accessible from everywhere. It could get tips off from the readers and update rather quickly. But then came social media, that was a revolution that changed everything. What happened is that the information flows 2 ways. From here to there, the information is bidirectional, it's much faster. What also happened is that people could create their own content and become influencers. They have a group of influencers that have a lot of followers through Facebook, their own blogs, TikTok, YouTube. YouTubers have a huge outreach. So the traditional media became less dominant, but not necessarily less important. Now the parallel to the power grid, 1.0 as we know it and as we have known it for 100 years through the Multiconsult history as well. It looks more like this. Here to the left, the power generation capacity, the power plants, the centralized power plants producing power and sending it through the transmission and distribution grid to the consumers that we have here. This is a one-way direction of power. One way, the power flows in this direction, and the money flows the other direction. Now this has been challenged through 3 innovations or more, of course, but I would like to emphasize on these 3. First of all, you have solar power, which is actually a very old invention. So perceived as a revolution, this has been an incremental improvement, driven by the market and partly also subsidies. It was invented in 1839 or discovery in 1839. It gave the Nobel Peace Prize to Einstein. He discovered it -- described it in 1905. And he founded niche markets after 1950s, puts on satellites and then cabins and lighthouses and then Germany decided to subsidize this. And they created a huge market demand that drove down the prices. And we know the history. Now you don't need subsidies anymore in most markets. Batteries has a similar history. It's even older discovery than solar cells. And it has been used -- widely used up through the time until 1991 when we got portable devices becoming more important. And at the same time, we got the lithium-ion, the first commercial lithium-ion batteries. That portable device demand drove an improvement for even cheaper, even better batteries. And the willingness to pay was high. But as the technology improved, it moved into markets where willingness to pay was less and eventually ended up in electrical cars and now even in the power grid. And we're talking gigawatts-hour battery concepts to stabilize the grid. The communication and computing technologies has a similar story, which I guess is familiar to you. But all of these come together in the power grid 2.0. Now what this has in parallel to the media transition is that now power flows both way, so does the money. You still have up here the traditional large-scale power plants, but now also being hybridized with other technologies. Wind and solar power produce power at different times of the day at different times of the year, but they're very -- they fill the gaps of each other. And if you add a battery to that, that can become a baseload power plant. And those power plants are being built. Hydropower and solar power, we see the same. And combined with bioenergy and large-scale solar, you see that there's renewables now taking over the large part of the picture. But on the consumer side, the consumers are also becoming important actors in the power grid. They produce, they consume, they store, they exchange with each other. And they can also be aggregated to become virtual power plants active in the power market, but also delivering services to the power grid, stabilizing. And you have new entrants into the power system like electrical cars, shipping through hydrogen or just electrical and chains, which were always there. And as well batteries balancing the grid and becoming an alternative to the grid. So the picture is more complicated. You have more possibilities. And you see also the amount of money that can drive change is now much larger. It used to be limited by the utilities and their pockets. Now it's the pockets of everyone, so you can go very fast. For Multiconsult, we report our numbers like that, but this is how we work. Because if you want to get up in the forefront, you need to create those interdisciplinary solutions where you work together to create solutions where examples such as a building can become an actor in the power market. You need knowledge of the power market and how that can be captured by digitalization in order to make those solutions. So I would like to give you some examples. But first, I would like to say where we are. Michael Liebreich said in December 2017 that by 2030, erecting a new building without integrating solar power, without equipping it with a battery, a heat pump, without capturing rainwater, will be an act of deliberate economic self-harm. Now that was in 2017, he proposed that for 2030, but that is happening today. So I'll give you 3 examples. This is Ekofisk, land-based fish farming. Their main purpose is to produce fish, and that requires a lot of power when you go on land. So covering the roof with solar power is a good idea, which is actually commercially viable, it's profitable. But looking into the other process streams where we have done in an energy concept study, we see that we could use the manure from the fish to create biogas and heat and power. We can use batteries to balance the grid to reduce the grid cost. And the oxygenation, which is needed for the fish production, has a byproduct, which is hydrogen. And of course, we can use that as well. So you kind of combine all the process streams to create a solution that supports the main business. And at the same time, you capture the benefits of the energy system. As for hybridization, we see that floating PV can be a solution to finding new land for power generation. As for this project from Africa, where an existing reservoir is used for a large-scale solar power plant, where the solar plays together with hydropower. So the solar engineers and the hydropower engineers and the power grid engineers need to work together to find solutions where we can optimize how they work together. How do we capture the value of the sun to create a higher water level in the dam so that we can produce more power for the same amount of water. So that's kind of a new field. It's very promising, and we have initiated a PhD to look further into that optimization. We see more of this coming. Now my last example is from Fjordbyen in Lier, where the company of Eidos has taken on the challenge to develop a 0 emission community, dwellings for -- 8,000 dwellings for 16,000 people and an equal amount of workspaces, where -- and that's 2.5 kilometers along the coast line adjacent to the new hospital in Drammen. The ambition here is to create a 0 emission society, where quality of life and where power and energy is used and consumed on-site. You can only do that when you work together. So here LINK and Multiconsult, almost 80 people has worked together to find solutions with the balanced energy efficiency of the building, on-site power generation and also business models in order how to increase the -- to achieve these or realize this system. The mobility concept is made in such a way that you don't need a car, but you still have a high quality of life. And today, also, it was announced that this will be a place for probably the first larger floating PV solar system in Norway. Having a client like Eidos, they would like to bring innovation into sites. So we connected them with a startup. And that startup and Eidos has come together and has now received a building permit for the system. Now this is only achievable when you capitalize on all the competence that you have in the organization. And for that, Multiconsult is very well positioned. So we will take on this going forward. That concludes my talk. So I would like to give the words to [ Hans ].

Thank you, Bjørn and Heikki, for talking about the future in Multiconsult. We are -- we believe that combined with what Grethe said, we are well positioned for the next years. We have the competence, we have the people, we have the ideas, and we will nurture these good ideas to stay competitive and give solutions for the future. Putting all this together, we have challenged ourselves on our goals, our targets, our financial targets, which is, of course, important to the shareholders, it's important to the company and to our ability to deliver these good solutions. Grethe talked about our journey, starting from 2019 when we had our Capital Markets Day, as some of you were present there. And to a large extent, we have delivered on these projects -- on this project. We have turned the business around. We have created sustainable profitability. And I think we've also given our shareholders a fair return. For those who believed in what -- in our message in 2019. So our challenge in the future is to bring what Bjørn said, what Heikki said and what Grethe said, what is really our future. And when we set our objectives in 2019, we were all pretty fresh in our job, including myself, but we set some targets. And we have really been able now to dive into these. Are these targets -- are these growth targets realistic? Or is this what we believe in? What about the margin targets? We came from a very low level. Is it fair to set a 10% margin, a double-digit margin? Or was that just guess work? Although we did a lot more than guessing. But anyway, we've been really putting all of these ideas together, everything that we worked on as a company into challenging our goals, our objectives. Are they the right ones, or should we change them? So this is kind of the background for this section, which we think is very important that we have these overall financial targets driving our decisions making, driving our investments, driving how we act and how we drive the company. I briefly mentioned this journey we've been through. And you may recall this graph here. When we met in our Capital Markets Day, it started here. It stopped here. We were here and our top tier, our tier 1 competitors -- listed competitors were up there. We were up there in '20 before the IPO. What happened? And we've been talking about that for a few years, so I will not repeat it. So what we've been able to do is to bring our profitability up to our -- to the level which was our target. We even, I think, surpassed it. And we briefly said that, that's probably to do with COVID as well. We had a positive COVID effect, lower costs, maybe some really, really strong efforts, unusually strong efforts by everyone to deliver. But what we're seeing, and we've had a little bit of a setback in this third quarter, which is maybe something that can be expected. But it is important for us to put this into perspective and say that we're still in the top tier. We are where we plan to be. We -- our top-tier here would be the typically listed non-Norwegian companies. And our ambition is to stay there. We would like to be in the top tier. We would, of course, try to exceed our peers. It's not that we put our target there. But realistically, as long as we are in the top 3, top 4 positions, we -- I think it's a signal that we're doing something right. So that is our ambition. And I would just comment on this one, just to make very clear, these are not exactly comparing apples and apples all the way because we all measure our margin in a different way. But we're right there in this same group, which is important. It's not millimeter precision in these figures, but it gives a very clear signal. So this is our journey. And just very clearly on the profitability, very -- the columns is the -- in kroner and [ ora ] in the mounts and then the margin, making a steep upwards jump in 2020. And on the LTM, which would be including the fourth quarter of 2020 and 3 quarters in 2021. We're seeing profitability coming down a little bit, but again, staying at a sustainable level. On this basis and based on our experience and everything that we've been presenting today, we are repeating our EBIT margin target of 10%. We had, when -- in 2019, we said we would go in steps. We said initially 8%, then going 10% long term. Now we've taken out the 8%. We're saying our target is 10%, and we will do everything possible to achieve that. It needs to be measured on an annual basis because we do have fluctuations, of course, in our quarterly results. So it has to be measured on an annual basis. And if we have extraordinary items like restructuring costs and those sort of things, it should be taken out. So we have been thinking together with our board very thoroughly through this, and we are repeating our EBIT margin target for the long-term EBIT margin objectives of 10%. Moving over to revenues. This has been our historic journey. It's a good growth story. Since 2010, we've had organic and inorganic growth of 11%. This is our history. And more importantly, I think for the present management is what's happening since 2019 when we set our 10% growth objective of -- we set it at 10%. And now including the Erichsen & Horgen acquisition, we are at 8%. So we're pretty close to achieving that 10% target. What we've done here in the figure in this gray column is to include the 2020 revenue for Erichsen & Horgen just to make it comparable. So an 8% target. Again, we've challenged ourselves. We challenged our management, our organization on what should be the future? Is it -- if it's sustainable to have a continuous 10% growth ambition? Is it too aggressive? Because 10% for 5 years means we have -- we're adding 50% -- we're growing the company by 50%. That's a lot of people. That's a lot of people to integrate. And we have to make sure that our growth is profitable. We should not grow for the sake of growing. It needs to be controlled. It needs to be done in the right way. So our conclusion to that is that we have set an ambition of a growth on a CAGR basis through the cycle, including M&A, of 8% to 10%. We're not setting 10% flat. We're saying 8% to 10%. That's because we need -- we would like to -- first of all, we think it's a good target. 8% is not a low target. But it takes a lot of energy from a company to grow. It takes energy for -- in the company to -- we need to recruit the right people, not just a lot of people, but the right people with the right competence to meet the future demands. We need to make sure that our profitability is stable. So we -- that's why we have set a range from not 10%, but from 8% to 10%. And this is something, which is fully supported by our -- also our local management. They thought that 10% flat would be a little bit on the high side because they see the challenges of growing a business. So -- but we think this is an ambitious target. It's a sustainable target. And of course, it includes M&A. And it also includes a little bit of, let's say, that we will succeed in some of our efforts. I mentioned that we believe that the underlying growth is 3% to 4%. And on top of that would be some M&A, and we're also believing that we will be able to take market share based on our -- some of the things that have been mentioned here earlier today. So that's our revenue ambition on the growth side for the next 5 years. Then on the gearing and equity side, we have also thoroughly been thinking through our gearing policy and/or what should be a sustainable level. What is very important for us is to maintain a solid financial strength. That is very important for us. It's important for the shareholders, we believe. It is important for our bankers. It's important for our employees and also for our customers. So this is very important. So when we're managing our gearing, which may fluctuate a little bit from time to time, we need to take into consideration, of course, our financial position, our loan balance, our expected organic growth initiatives. It's something, which as briefly mentioned here, that there is a change. There is a shift in some of the focus. We will be driving some initiatives internally and -- in terms of digitalization and other factors. And of course, also our M&A portfolio is something we need to take into consideration when we're thinking about our gearing. We have seasonal change in working capital. You know that from our third quarter, we had a weak working capital development, but it fluctuates quite a bit between quarters. And we also have to -- of course, have to take into account the market outlook and any uncertainty, which may impact our business. And we would like to be a company, which has a stable and predictable dividend policy. A lot of words, but we ended up with the same results. So our -- we said that our gearing ratio should be normal between 1 and 2. We're now -- at the end of the third quarter, we're at 0.9. So we're pretty close to our range. And we're saying that it should be maximum 2.5 and can go to 3. The 3 is quite a high number, but it also matches with our bank covenant. So that's why we also have that. And also on the equity side, it's equity percentage [ high ], we're keeping the 25% target. So anyway, a lot of words. We've been thinking through it. We've been challenging ourselves, but we ended up with the same results. I think the same goes for the dividend payout ratio. We've been challenged -- we've challenged ourselves and we've been challenged by shareholders, and we've been testing how -- what we think about dividend as we move forward. We have ended up with the same dividend policy that has been with the company for several years. And ambition is to distribute at least 50% of the group's net profit annually. And it's also important to note what's in the asterisks on here, which says that when deciding the annual dividend, the Board of Directors will take into consideration the various aspects of the financing strategy such as expected cash flow, capital expenditure plans, financing requirements and appropriate financial flexibility. So it links a little bit with the gearing policy. But I think we've demonstrated as a company and the Board -- through its decisions has demonstrated through these 2 years that we have -- we take an active view on managing our balance sheet. We did have a very, very strong balance sheet at the end of last year, which resulted in a dividend payout of 80%. So signaling this is that we will continue to have an active view on our balance sheet management and our capital management. We're signaling that the 50% is a minimum. And that we will also maintain the flexibility in theory than to have it lower if our capital requirements for M&A is a lot higher than it would normally be. So we are taking this kind of dynamic and proactive approach to our -- how we will manage our dividend historically. But anyhow, we ended up with the same wording. We could have tweaked a little bit on it, but we think it works. And I think we've demonstrated how we intend also in the future to think about dividend, as an example, through our more than 80% payout last -- for 2020. Then lastly, on the M&A strategy. We've also challenged ourselves on that, should be a very, very aggressive M&A strategy where we plan to double the size of the business or, let's say, do something very, very different from our core business. Is that the future for us? Or should we pretty much stay with where we are and focus on our core business, of course, with a view supporting our strategy to take a wider role in the value chain. We ended up with this kind of strategy. It's a moderate and selective M&A strategy with primary focus on our core business. We will, however, as we do, as we have been doing for the last at least year, have been monitoring opportunities as they come up. As an example, the Erichsen & Horgen came up, it came to us this spring. And we -- this was a unique opportunity for us, which we took, which was a pretty large transaction for us, which we're working very hard on the integration as we speak. So we will continue to take these opportunities when they come to us, but we're also actively also seeking opportunities with smaller acquisition and bolt-on transactions. And of course, we will also be talking -- thinking about the digital changes to our society and follow very closely whether actually we should do everything ourselves or whether we should do it through partners, either asset incorporation and sometimes potentially also through an acquisition or a partial investments like we did with the 7Analytics example that Grethe mentioned. So that, I think, concludes our financial strategy and our targets review. Grethe, I think we're pretty much on time, maybe a little bit ahead of time. And we're ready to take on any questions.

Yes, thank you. We also -- it's also possible to have questions from the audience here at MUNCH, of course. So please let me know. Actually we don't have any questions from the webcast, which we had some problems with during the day. But I don't know if there's any questions from the audience. Please state your name and where you come from.

Sindre Sørbye, Arctic Asset Management. 2 questions. First, more near term and also in light of the third quarter figures. How do you, let's say, balance the wage inflation? And obviously, there is some cost increase. We can see that from the numbers. With growth -- because -- I mean in light of history, growth has, at least in the past, been quite expensive, so to say, and sometimes negatively correlated with margins. So what are you doing to, let's say, avoid this pitfall again? And listening to other players in the industry, it seems like there's been increased, let's say, wage demands for new employees, and they are obviously very important to recruit a few on the growth business?

Yes. Was the first question, was it about wages? Is that correct? Did I understand it correct?

Obviously. And the flip side is what you do to increase prices, because that's a key margin driver in the industry. The kind of gap between...

That's right. Yes, well, we -- first of all, we are careful in how we distribute really. When we have the annual salary increases, we look at where we -- how we want to distribute it. We're also closely following the development of the -- how the rates in the industry is going. And we're seeing at the moment that we are maintaining and continuing to have an increase in the rate, which we haven't seen for a long time. If you also see, there's a report from the Consulting Engineers' Association in Norway, which shows the same tendency that the industry seems to have managed to maintain and raise the rates. On the other hand, we have set profitable growth. We are extremely concerned with that as well. And it means that when we grow, we will grow because we have the business to support and keep people active. On the other hand, moving in a strategic position also means moving into a more profitable part of the market so that we're seeing also quite a substantial potential in moving into and taking another position in the value chain.

Okay. And that's a follow-up or a different topic regarding the 8% to 10% growth target. Is that from -- it's stated 22% to 26%. Is that from the year 2021 up to 2026? And secondly, if you can give some flavor on the expected split between organic and M&A costs? I mean I think you said market growth was about 3% to 4%. But when you went through the markets, your 2 largest segments, you have actually flat arrows there, 70% of the turnover. And you sounded much more optimistic on the remaining 3 segments. But today, they're only 30% of the turnover. So if you can kind of put some more flavor on that?

Yes. I can start on that. [indiscernible] and you're right, 3% to 4% organic growth, which leaves the balance there of 4% to 6% of nonorganic growth. And I said, we haven't been specific on the split of that between organic and M&A. But what we're saying is that we will do some bolt-on transactions from time to time, which we are doing. We have the closing of Nordland Consult -- Teknikk now 2 days ago, which is a small acquisition in Mo in Nordland. But we have -- we -- on purpose, we've not said that 50% is organic, 50% is nonorganic because we will take the opportunities that pop up. But we're also quite confident that we will be able to, with our expertise, also gain market share. So if the market grows -- underlying market grows 3% to 4%, we also conceptually can add maybe 2% -- 2% to 3% conceptually on our what we believe is our ability to gain market share, not year-on-year, not necessarily, but on average through the cycle. So yes, we will be specific, not specific on that particular topic. Grethe, do you have something to add?

No, I think that's right. And I think also we will see contracts where partnerships and also then revenue from partnerships will be a larger part than we are having at the moment. But we already do have a fair amount of sort of sub-suppliers' revenue in our figures.

Okay. Yes. Then if there's -- are there any other questions from the audience?

[ Carl Frederik Waage ] from Arctic Securities. I have a follow-up question on the rising IT license costs you mentioned earlier. Are you sort of able to quantify a little bit more how much of an impact that has on your cost base? And if you sort of expect this to be a temporary increase or more a permanent shift?

I think the impact is probably exceeding NOK 20 million on an annual basis. So it's a significant increase. We're working very hard to understand that. We had partially budgeted for it. So we were -- and we knew that it was coming. But it's an area which we're not introducing a next level cost program just for that, but we're doing a deep dive into the potential of reducing that. We think there is -- there could be some potential. I think if our IT teams listens to this, they will say, no, there is no opportunity to do that. But of course, we will not give up and say that this is -- we saw that we were able to deliver on in 2020. We're seeing the cost in 2021. On the other hand, we also know that the suppliers know their position. And I think a lot of the businesses around Norway and also around the world are experiencing a little bit of the same picture where license costs are only increasing to a larger extent than the general inflation. Grethe?

That's right. It's an industry challenge. And I guess the main challenge is trying to see how can we get it recovered in the rates that we have. And of course, that again depends a bit on the business models that we hope to develop in the future. But it is a challenge, and it's a challenge that's been raised actually in the European Union because there is a suspicion of somebody using a competitive position not in the right way.

But there could be some potential for improved discipline, number [indiscernible] licenses we have internally. I'm not promising anything, but we're really diving into that because that -- it is impacting our P&L and our results.

And to sort of follow-up on that, are -- have you seen any sort of permanent changes to the way you work now that you have opened up your office completely? And are people back in the office at the same extent as before? Or are you experiencing some vacancy in your footprint, et cetera?

The -- what we have said is that we would like everybody now to come back to our offices because we want to see them. But we also expect that the way we work in the future will be different. And we will have to take into some of the learnings that we've taken from the COVID. And it will mean a lot to how our offices look in the future and probably also the area that we need for offices. We're doing a pilot in Oslo, which we call the future way of working to set up the whole way of our offices in a different way because we work -- some will now be on teams. Some will be in big groups. But I think we're just on the starting point of that. And I think the world is actually challenged on how are we going to work together in the future. But we believe that some of our people will work from home to a larger extent than they have done previously, but we don't expect to have anybody working only from home.

And then just a final question on the potential for adjusting your prices. How is the current business model in terms of -- is each project on a fixed price through its life cycle? Or how frequently do you have these discussions?

We are -- we operate -- I think roughly 50-50 of our revenue is public and private. And as you know, the public are under the much stronger regulations in the way that they can do purchasing. But we are seeing tendencies now that price counts less and less, and they are more concerned with the skills of the people that we have and the way and the methods that we describe on how we're going to solve the challenge. But it is a huge variation. It's 10,000 projects. And -- but I think what we are aiming at is trying to, together with our clients, come with proposals on how can they ask for our services in a way that will actually maximize their values as well and use the skills in the whole industry and be a part of actually creating the teams that they require for their challenge.

Hans-Erik Jacobsen, Nordea. Your [indiscernible] growth going forward is likely to be within sustainability. Can you explain a little bit about the margins, operating margins within this area compared to your more traditional businesses?

I will try. A lot -- it's different areas. If you look at climate risk, for instance, a lot of that is within the area of geotechnics, and that is already a high-margin business for us. So we do believe that, that's an area where we can continue to have the high margins. When it comes to sustainability on developing buildings, again, it's multidisciplinary teams. And what we're seeing, for instance, unfortunately, this road project that got canceled, but we actually won that because we had the solution that gave the least CO2 footprint. And price wasn't that sensitive then. It was -- so we are actually being awarded projects on different criteria as our clients are facing stronger and stronger regulation demands. So I think the skills that we have in helping this solution will also drive a more profitable business for us. And I think in some of the growth that we're going to do is to do a higher-margin market.

Okay. Thank you. And there's no further questions, I believe. So maybe you could wrap it up.

Okay. Then we thank you all for coming here to the MUNCH [ VCM ] and to all of you who've been listening, and that concludes the session for this year. Thank you.