Financial review

In 2023, Ramboll delivered strong growth, recording our highest ever revenue and operating profit (EBITA). The year was marked by challenging market conditions. Like much of its industry, Ramboll also witnessed the impact of high inflation and interest rates, and strained supply chains. Despite these global economic effects and headwind from currency, Ramboll delivered solid financial results for the year, and better than expected.

The results show the solidity in our diversified and global approach to clients and markets. We are on the right track with our strategy and initiatives and see continued high demand in the market for our services within renewable energy, Power-to-X, water and climate adaptation, the built environment, and supporting clients on their sustainability journeys, and in helping them establish sustainability strategies. Demand was also strong for solutions that drive climate and nature impact on projects.

Our order book increased by 2.2% and amounts to DKK 8.1 billion as compared to an order book of DKK 7.9 billion at the end of 2022, although the number of months of secured revenue decreased to 7.1 at the end of 2023 due to the higher revenue, as compared to 7.6 in 2022.

Key numbers

: 17.0BN
Gross Revenue, DKK

: 1,033M
EBITA, DKK
: 6.3%
Revenue growth
: 7.1
Order book months secured 2023

Operational results

Our gross revenue of DKK 17,015 million was 6.3% higher than our gross revenue of DKK 16,006 million in 2022. Organic growth was 8.8% compared to 9.9% in 2022. Net growth from acquisitions and divestments was 0.5%, whilst the reporting currency DKK against foreign currencies had negative 3.0% impact on revenue.

Net project revenue, which is Ramboll’s own production excluding revenue from subcontractors, was DKK 14,054 million, which is 6.7% higher compared to DKK 13,168 million in 2022. Organic growth from net project revenue was 9.3% compared to 9.5% in 2022.

We had strong growth across many of our markets and business units where Energy, Environment & Health, and Management Consulting all delivered double-digit organic growth. From a geographical business perspective, we had strong growth in most geographies. We had double-digit growth in Denmark and UK, but also strong growth in Americas and Asia Pacific.

Several initiatives have been implemented to improve our billing ratio and both sick leave rates and employee attrition rates have decreased compared to 2022. However, our billing ratio did not improve satisfactorily.

In 2023, we continued to focus on costs and driving scalability in our global setup to enable Ramboll to manage and adapt to changing market conditions and secure long-term growth of the business.

Operating profit (EBITA) was DKK 1,033 million and increased by DKK 80 million compared to DKK 953 million in 2022. EBITA margin was 6.1% compared to 6.0% in 2022. Adjusted for the impact of working days (DKK 50 million) and currency (DKK 27 million), operating profit (EBITA) increased by DKK 157 million compared to 2022 and the underlying margin was 0.3 percentage points higher than in 2022.

We saw improvements in the EBITA margin for business units for Water, Environment & Health, Energy, and Architecture & Landscape. From a geographical perspective, the EBITA margin has improved in Denmark, UK, Americas, and Asia Pacific. However, high inflation and interest rates challenged some of Ramboll’s clients, leading to the delay or cancellation of projects, especially in the business units for Buildings, Transport, and Architecture & Landscape, which dampened performance in Nordic countries outside of Denmark, in 2023.

Net other costs amounted to DKK 158 million compared to DKK 53 million for 2022, where net other costs for 2022 were positively impacted by divesting part of our Water business in the US. The results for 2023 were negatively impacted by several non-recurring restructuring initiatives focusing on the reduction of the company’s office footprint, integration of acquired entities, and adjusting capacity to demand.

Amortisation was DKK 211 million compared to DKK 237 million in 2022. There was no goodwill impairment in 2023 or 2022. Net financial expense was DKK 46 million compared to DKK 22 million for 2022 due to increased foreign exchange loss.

The effective tax rate was 35.7% for 2023 compared to 37.6% for 2022. 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 2023 was DKK 391 million compared to DKK 390 million for 2022.

Return on invested capital (ROIC) was 15.8 and has decreased from 18.1% for 2022, which is due to the increase in working capital and decrease in Operating profit (EBITA), less net other cost income due to higher other cost in 2023, and gain on divestment in 2022.

We have strong growth across many of our markets and business units where Energy, Environment & Health, and Management Consulting all delivered double-digit organic growth.

From a geographical business perspective, we had strong growth in most geographies. We had double-digit growth in Denmark and UK, but also strong growth in Americas and Asia Pacific

Dividend

The Board of Directors propose a dividend of DKK 100 million. A dividend of DKK 100 million corresponds to 25.6% of profit for the year.

Cash flow

Cash flow from operating activities DKK 459 million was lower than DKK 469 million in 2022. The decrease is mainly due to the increase in working capital, partly offset by higher cash flow from operating activities before changes in working capital, and lower tax paid.

Cash conversion is 63% compared to 69% in 2022. At the end of 2023, Ramboll had a positive net interest-bearing cash position of DKK 435 million compared to DKK 673 million for 2022.

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 10.4 billion for 2023 are higher than DKK 9.7 billion for 2022 due to increase in receivables, prepayments, and cash at bank compared to 2022.

Total liabilities of DKK 6.7 billion for 2023 are higher than DKK 6.2 billion for 2022 due to increase in banks loan and other payables offset by decrease in prepayments from clients.

Equity has increased by DKK 171 million to DKK 3,378 million. The solvency ratio was 32.5% compared to 33.0% in 2022. The movements in equity mainly comprised of profit for the year, negative exchange rate adjustments related to foreign subsidiaries and associates, paid dividends, and the purchase of own shares. Ramboll has purchased own shares for DKK 30.8 million during the year – 105,000 shares for a nominal value of DKK 0.1 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 0.9% of the share capital.

Risk management at Ramboll

We face 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 risks 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 and Risk Committee meetings.

In 2023, increased global geopolitical tensions, high inflation, and recessionary fears were experienced in some of our key markets. Throughout the year, we worked on monitoring and mitigating these risks. Our exposure to these risks was reassessed in Q4, 2023. Consequently, we updated our key risks and associated mitigation plans which will be tracked during 2024.

Subsequent events

Ramboll is not aware of any events subsequent to 31 December 2023 that are expected to have a material impact on Ramboll’s financial position.

Outlook for 2024

Ramboll’s full-year organic growth rate is expected to be between 4-6% and the EBITA margin is expected to be between 5.8%-6.3%.

Halfway into Ramboll’s current strategy period 2022- 2025, the company is delivering as expected and on track to meet its 2025 strategic objectives. Ramboll will continue to invest in employees and the competencies needed to meet evolving client needs, including by addressing emerging sustainability challenges and biodiversity impacts.