Navigating Margin Pressure and Strategic Growth in Multiconsult ASA (STU:3MC)

In the high-stakes world of consulting, where margins are razor-thin and competition is fierce, Multiconsult ASA (STU:3MC) has emerged as a case study in balancing short-term cost discipline with long-term strategic ambition. The Norwegian engineering and consulting giant's Q2 2025 results underscore the challenges it faces: a 0.6% decline in net operating revenue, a 4.8% EBITDA margin (down from 13% in Q2 2024), and a billing ratio of 72.9%—all pressured by a 6% calendar effect due to fewer working days. Yet, beneath these numbers lies a company actively recalibrating its approach to navigate a volatile market while laying the groundwork for sustainable growth.

The Margin Squeeze: A Perfect Storm of External and Internal Factors

Multiconsult's margin compression in Q2 2025 was not an isolated event but a confluence of external headwinds and internal adjustments. The calendar effect alone shaved NOK 85.5 million off revenue, while rising employee costs outpaced billable rates, squeezing profitability. The company's billing ratio decline—driven by a shift in project portfolios and startup costs in new frame agreements—further exacerbated the issue. Meanwhile, the broader Norwegian consulting sector is grappling with commoditization of services, fee erosion, and a 5.6% rise in personnel costs in 2024, as talent shortages drive up salaries for tech specialists.

Cost Management: Precision Over Panic

Multiconsult's response to these pressures has been methodical. The company is tightening staffing planning to align workload with capacity, prioritizing larger projects with higher billing ratios, and scrutinizing wage inflation to ensure it does not outpace revenue per full-time equivalent (FTE). CFO Ove Haupberg emphasized a “selective project bidding” strategy, leveraging a robust order backlog of NOK 4.575 billion to avoid unprofitable contracts. These measures are not about slashing costs but optimizing resource allocation—a critical distinction in a sector where client relationships and project complexity demand flexibility.

The ViaNova acquisition, expected to close in Q3 2025, is a prime example of this balance. Priced at NOK 300 million, the deal is not just a growth play but a cost-control lever. ViaNova's expertise in digital tools for road infrastructure and its lean operational model are expected to generate IT and operational synergies. CEO Grethe Bergly noted that the acquisition aligns with Multiconsult's goal of becoming “Norway's strongest mobility and transportation team,” a sector poised for growth as the country invests in infrastructure modernization.

Strategic Growth: Beyond the Balance Sheet

While cost management is essential, Multiconsult's long-term value creation hinges on its ability to differentiate in a crowded market. The company is doubling down on high-growth areas like energy transition, defense, and digital engineering—sectors less susceptible to commoditization. Framework agreements with the Norwegian Defence Estates Agency and a 25% year-over-year revenue surge in the Water & Environment segment highlight its pivot toward stable, high-margin work.

The acquisition of ViaNova also underscores a broader trend: consulting firms are increasingly leveraging M&A to scale niche capabilities. By integrating ViaNova's 129 employees and NOK 227.5 million in FY 2024 revenues, Multiconsult is not just expanding its workforce but enhancing its digital engineering toolkit. This aligns with industry-wide shifts toward AI-driven solutions and hybrid delivery models, which reduce travel costs and improve scalability.

Financial Resilience: A Strong Foundation for Future Moves

Multiconsult's recent refinancing of credit facilities—from NOK 1.12 billion to NOK 2.5 billion—provides the liquidity needed to fund both organic and inorganic growth. With a debt-to-equity ratio of 0.4 and a current ratio of 1.8, the company is in a strong position to manage its obligations while funding strategic initiatives. The order backlog, though slightly down from NOK 4.943 billion in Q2 2024, remains a buffer against short-term volatility.

Investment Considerations: Weighing Risks and Rewards

For investors, Multiconsult presents a compelling but nuanced opportunity. The company's 10% EBITDA margin target is ambitious given current pressures, but its strategic moves—ViaNova, defense contracts, and digital investments—position it to outperform peers. Risks include integration challenges with ViaNova, continued margin erosion in commoditized services, and macroeconomic headwinds like inflation. However, the company's selective growth approach and strong liquidity cushion these risks.

Conclusion: A Calculated Path to Resilience

Multiconsult ASA's Q2 2025 results may paint a picture of margin strain, but they also reveal a company in motion. By marrying disciplined cost management with strategic acquisitions and sector diversification, it is navigating a turbulent market without sacrificing long-term potential. For investors, the key takeaway is clear: Multiconsult's ability to balance short-term pragmatism with long-term vision makes it a standout in a sector where many firms are struggling to adapt. As the Norwegian consulting landscape evolves, those who recognize this balance early may find themselves well-positioned for the next phase of growth.