MT Højgaard Holding A/S: Continued improvement in earnings in the MT Højgaard Group in the third quarter of 2019
MT Højgaard Group (MT Højgaard A/S and subsidiaries)The MT Højgaard Group continues to deliver on the revitalisation plan launched by the contracting group in November 2018. The business as a whole was strengthened in the quarter after a reduction in costs and an improvement in the quality of execution. In addition, net write-downs on projects were reduced.Revenue for the first nine months of the year was DKK 5,077 million compared with DKK 4,827 million in the same period last year. Third-quarter revenue was DKK 1,652 million compared with DKK 1,583 million in the third quarter of 2018.EBIT for the first three quarters of the year was DKK 49 million compared with a loss of DKK 548 million in 2018. Third-quarter EBIT was DKK 28 million compared with a loss of DKK 459 million in the third quarter of 2018.Operating activities generated a cash outflow of DKK 148 million in the first nine months of the year, compared with an outflow of DKK 358 million in the same period last year. However, third-quarter cash flows were affected by month-end accruals and consequently were an outflow of DKK 69 million compared with an inflow of DKK 116 million in the same period in 2018.YTD order intake in the Group was DKK 4.7 billion, compared with DKK 4.6 billion in the same period in 2018. Third-quarter order intake was DKK 2.0 billion, compared with DKK 1.4 billion in the same period last year.The results confirm the expectations that 2019 will be a turning point in terms of earnings.As part of the revitalisation, MT Højgaard A/S is now creating a paradigm shift, where a number of employees from the staff and support functions will move closer to the projects in order to strengthen focus on production, increase efficiency and improve competitiveness still further. The paradigm shift means that 130-140 salaried jobs mainly in staff and support functions will be cut and costs will be reduced by approx. 130-150 million per year with full effect in 2021. The cost reductions will be achieved through approx. DKK 90-110 million reduction in payroll costs and approx. DKK 40 million through other cost reductions.President and CEO Anders Heine Jensen will be stepping down today and Morten Hansen will become acting President and CEO, see company announcement No. 9/2019.The organisational changes will result in restructuring cost related to the revitalisation plan in MT Højgaard A/S of estimated DKK 35 million in 4th quarter.The outlook is unchanged: revenue of around DKK 7 billion (2018: DKK 6.8 billion) and EBIT before restructuring cost of around DKK 75 million (2018: DKK 547 million loss). Operating cash flows are still expected to be in line with 2018 (DKK 142 million outflow), but with an upside potential.– MT Højgaard A/S is stabilising itself, and the sharper focus on projects is producing good results; bidding has improved, execution has been strengthened, write-downs are under control, and order intake has increased. We are now taking further steps to make MT Højgaard A/S profitable in 2020 – like the rest of the Group – by organising ourselves in a completely new way and moving as many functions as possible closer to projects and customers. That will make us even better equipped to continue the efforts to realise the Group’s commercial potential, says Chairman of the Board Carsten Dilling, MT Højgaard Holding A/S.The other companies in the Group have undergone continuous organisational and strategic adjustments, which means that they continue to cope well overall.MT Højgaard Holding A/S (the whole Group incl. the parent company MT Højgaard Holding A/S)Højgaard Holding A/S and Monberg & Thorsen A/S merged on 5 April 2019. The continuing company changed its name to MT Højgaard Holding A/S, which, on implementation of the merger, became the owner of 100% of the MT Højgaard Group (the contracting activities).The financial figures and outlook for MT Højgaard Holding A/S differ from those of the MT Højgaard Group in the interim financial report because MT Højgaard Holding A/S did not consolidate the MT Højgaard Group for accounting purposes until with effect from 5 April. Furthermore, purchase price allocation was charged against profit in connection with the merger, and MT Højgaard Holding A/S incurred transaction costs and administrative expenses. For further details of the accounting effect of the merger, see pages 3-4 of the interim financial report.For the first three quarters of 2019, MT Højgaard Holding A/S delivered revenue of DKK 3,383 million, while EBIT was a loss of DKK 4 million. Profit before tax was DKK 118 million and operating cash flows an outflow of DKK 45 million. For the period 5 April-31 December 2019, MT Højgaard Holding A/S expects unchanged revenue of DKK 5.3 billion and an EBIT before restructuring cost of around DKK 0 million. Restructuring cost related to the organisational changes in MT Højgaard A/S is estimated to be approx. DKK 35 million. In addition operating cash outflow of around DKK 20 million (previous expectation: around DKK 0 million).Contact: Ann-Louise Elkjær, Vice President Communications and HR, +45 2033 8693, ale@mth.dkAttachmentCompany announcement_10_2019_Continued improvement in earnings in the MT Højgaard Group in the third quarter of 2019