Financial review
In 2022, Ramboll delivered strong growth, recording our highest ever revenue, operating profit (EBITA), and profit. The results are overall satisfactory, and with growth above our expectations for the year.
The order book increased 8.8% and amounts to DKK 7.9 billion compared to DKK 7.3 billion in 2021, corresponding to an increase in months-secured revenue from 7.5 in 2021 to 7.6 months in 2022.
The financial results and outcomes of 2022 show that we are on the right track with our strategy, The Partner for Sustainable Change, as there is high demand in the market for our services within renewable energy and Power-to-X, water and climate adaptation, sustainable buildings, and establishing sustainability strategies for clients.
Our dedicated employees are a key enabler in delivering a solid financial result, while our diversified approach to clients and markets, combined with a focus on cost, proved to be resilient in a year of higher geopolitical and macroeconomic uncertainty.
Key numbers
- : 16BN
Gross Revenue, DKK
- : 937 M
EBITA, DKK
- : 12.6%
Revenue Growth
- : 7.6
Order book months secured 2022
Operational results
Our gross revenue of DKK 16,006 million was 12.6% higher than our gross revenue of DKK 14,212 million in 2021. Organic growth was 9.9% compared to 4.1% in 2021.
Net project revenue, which is Ramboll’s own production excluding revenue from subcontractors, was DKK 13,169 million, which is 11.7% higher compared to DKK 11,786 million in 2021. Organic growth from net project revenue was 9.5% compared to 5.2% in 2021.
We have witnessed strong growth across all our markets business units. Buildings, Water, Energy, and Management Consulting all delivered double digit organic growth.
From a geographical business unit perspective, we had positive growth in all geographies except Sweden. The highest growth rates were delivered in the UK, Germany, and Central Europe, Middle East & Africa business units, with high double-digit organic growth rates. Growth was also strong in Denmark and Norway.
Operating profit before amortisation of goodwill, brand, and customer contracts (EBITA) increased by DKK 88 million to DKK 937 million compared to DKK 849 million in 2021, corresponding to an EBITA margin of 5.9%, compared to 6.0% in 2021. Adjusted for the impact of working days (DKK 5 million) and currency (DKK 20 million), the underlying EBITA increased by DKK 63 million.
The year was impacted by higher employee sick leave rates in the wake of the Covid-19 pandemic, as well as higher employee attrition rates following a period of low attrition rates during the pandemic-related lockdowns in countries. Both had an impact on our billing ratio, which ended lower than for 2021.
We saw improvements in the EBITA margin in Denmark, Norway, and UK, whereas margins declined particularly in Sweden and Asia-Pacific. In Germany, the margin was impacted by acquisitions and investments into growth. From a markets perspective, Environment & Health and Energy showed strong EBITA margins, while there was also improved profitability in Buildings. We saw a slight decrease in profitability in Architecture & Landscape (Henning Larsen).
Net other costs amounted to DKK 53 million compared to DKK 125 million for 2021 and was positively impacted by divesting part of our Water business in the US. Other income is related to gain on divestments and gain on disposals of fixed assets. Other costs are related to integration and restructuring. The restructuring costs are mainly related to re-organising our support functions and the closing down or turnaround of low performance operational activities. These costs are non-recurring costs, such as costs related to lay-offs and rental costs related to closing offices.
Amortisation from goodwill, brand, and customer contracts was DKK 237 million compared to DKK 220 million in 2021. There was no goodwill impairment in 2022 or 2021.
Net financial expense was DKK 22 million as compared with DKK 34 million for 2021. Although financial income and expenses were affected by fluctuations in exchange rates, the net effect has been very limited.
The effective tax rate was 37.6% for 2022, as compared with 32.7% for 2021. The effective tax rate exceeds the statutory country specific tax rates. The main explanatory components are non-deductible goodwill amortisation and non-deductible merger and acquisition costs.
Profit for the year 2022 was DKK 390 million, compared to DKK 316 million for 2021.
Growth across markets and geographies
Ramboll has grown overall 13% on gross revenue since 2019. Organic growth has on average since 2019 been around 3% including 2020 which was significantly impacted by Covid-19.
From a Market perspective, we have primarily grown in Buildings, Environment & Health, Transport, and Water. In Energy, we have had an expected decrease in revenue due to our transitioning into the renewables market.
From a Geography perspective, the primary areas of growth were Denmark, Finland, Americas, UK, Germany, and Central Europe, Middle East & Africa.
Dividend
The Board of Directors propose a dividend of DKK 100 million. A dividend of DKK 100 million corresponds to 25.7% of net profit and 46.9% of free cash flow for the year.
Cash flow
Cash flow from operating activities of DKK 469 million was higher than the DKK 333 million in 2021 due to an increase in cash flow from operating activities and changes in working capital offset by significant higher tax paid. Cash conversion ended at 68% as compared with 48% in 2021.
At year-end, Ramboll had a positive net interest-bearing cash position of DKK 673 million compared to DKK 902 million for 2021. Ramboll has a solid financial position with a committed funding facility of DKK 2,500 million expiring in November 2025.
Balance sheet
Total assets of DKK 9.7 billion for 2022 are higher than DKK 9.1 billion for 2021. Both work in progress, receivables, and prepayments from customers have increased compared to 2021 due to the increased activity level in the business.
Equity has increased by DKK 285 million to DKK 3,207 million. The movements mainly comprised of profit for the year, positive exchange rate adjustments related to foreign subsidiaries and associates, paid dividends and bought own shares.
Ramboll has bought own shares for DKK 53 million during the year – 201,333 shares for a nominal value of DKK 0.2 million. These shares are acquired to hedge a proportion of the expected future payout under Ramboll’s performance share programme, which is a retention programme for Ramboll leaders. Ramboll owns 0.58 % of the share capital.
The solvency ratio was 33.0% compared to 32.2% for 2021.
Risk management at Ramboll
Ramboll faces a variety of risks and uncertainties as part of conducting our business activities.
The enterprise risk management (ERM) process established within Ramboll is designed so that key risks to the business, at both a business unit and Group level, are identified, assessed, managed, and monitored. Identified risks are assessed on both financial and non-financial impact measures as well as the likelihood of the risks materialising.
Based upon feedback from business units and stakeholders within the business, risks at a local and global level are identified as part of the annual ERM cycle. The Group Executive Board assess these and determines which are the key risks facing the Group. Each key risk is appointed a risk owner who is overall responsible for ensuring that risk-mitigating activities are completed to bring the risk to the targeted level.
The Group Executive Board is responsible for the management of risks resulting from Ramboll’s activities. The Board of Directors has overall responsibility for ensuring the ongoing adequacy and effectiveness of the ERM process. Group Internal Audit is responsible for facilitating the ERM process, monitoring the key risk mitigation status during the year, and reporting to the Group Executive Board and the Board of Directors. Risk management is an agenda item at the quarterly Audit & Risk Committee (ARC) meetings.
During 2022, risks impacting our business emerged as a consequence of the conflict in Ukraine, specifically, increased sanction measures, higher inflation, and global recessionary fears. Ramboll has throughout the year worked to monitor and mitigate these risks. Our exposure to these risks was reassessed in Q4 2022. We updated key risks and associated mitigation plans agreed for tracking.
Subsequent events
Ramboll is not aware of any events subsequent to 31 December 2022 that are expected to have a material impact on Ramboll’s financial position.
Outlook for 2023
Our 2023 outlook is challenged by several significant geopolitical and macro-economic uncertainties such as the war in Ukraine, and global inflation and interest rate increases. Despite the uncertainty, our outlook is overall positive, and growth is expected to continue in 2023. We continue to focus on improved profitability. Full-year profit for the year is expected to be above 2022 level.
Our strategy gives us a solid foundation for our work towards 2025 and beyond. We look forward to continued growth in our markets and geographies, in line with our strategic priorities.