Norva24 Group (NORVA) Q3 2024 earnings summary

Executive summary

• Revenue from customer contracts grew 22.7% year-over-year in Q3, with total reported revenue up 18% to NOK 934.8 million; organic growth was 5.4%.

• Adjusted EBITA/EBITDA margin for Q3 was 14.2%, down 1.4 percentage points year-over-year, with adjusted EBITA up 7.1% to NOK 132.8 million.

• Strong operating cash flow of NOK 243 million in Q3, up from NOK 132 million last year, with LTM cash conversion at 89.6%.

• Six acquisitions signed year-to-date, adding NOK 400 million in annual revenues; Vitek deal pending regulatory approval.

• Well positioned as market leader in Northern Europe’s underground infrastructure maintenance sector, benefiting from long-term growth drivers and low cyclicality.

Financial highlights

• Revenue from customer contracts increased 22.7% year-over-year to NOK 963.2 million in Q3 2024.

• Adjusted EBITA/EBITDA margin was 14.2% in Q3, 11.5% year-to-date; adjusted EBITA up 7.1% year-over-year.

• Net financial costs reduced due to NOK 17.7 million earn-out gain from reversal of accrual for underperforming German branch.

• Net interest-bearing debt at NOK 1.6 billion, with net debt/adjusted EBITDA at 2.2x.

• Cash and cash equivalents at quarter-end were NOK 318.4 million.

Outlook and guidance

• Confident in achieving NOK 4.5 billion revenue in 2025, with organic growth at least in line with market growth.

• Targeting mid-term EBITDA/EBITA margin of 14%-15%.

• Expect tax rate to normalize to 25% going forward.

• Margin expansion expected for full year 2024, with Q4 anticipated to outperform last year.

• No annual dividends expected in the medium term as cash flows are reinvested into growth and acquisitions.