Success with profitable growth

MT Højgaard a/s ended 2008 with pre-tax profits of DKK 359 million, the best ever result in the company's history and slightly higher than expected.

The result was achieved through consistent focus on project profitability, and despite increasing price competition in tough market conditions.

Return on capital employed was just under 30%, compared to 19% in 2007.

- Since 2007, our strategic work has been focused on increased profit-ability and profitable growth, in that order. That is why we today can present a positive result in a challenging time, says CEO Kristian May, who will maintain the focus on profitability in order to create even better results for the company in the long term.

In 2008, MT Højgaard generated revenues of DKK 11.2 billion, 5% less than in the previous year.

Good solidity and a satisfactory order book

The Group's equity topped DKK 1.4 billion at the end of 2008, an ad-vance of more than DKK 200 million, and equity share was 27%.

- At the present time it is important for our customers, suppliers and other collaboration partners, that we stand on a solid foundation, says Kristian May.

At the turn of the year, MT Højgaard had an order book of DKK 9.5 bil-lion, about 10% lower than the previous year but satisfactory in the cir-cumstances. Revenues are forecast to be around DKK 10 billion in 2009. Despite an adjustment of costs to the slightly lower level of activity, the Group does not expect under current market conditions to achieve a re-sult on a par with 2008. MT Højgaard expects a profit margin in 2009 of between 2% and 3% compared to 3.2% in 2008.

Ambitious objectives

MT Højgaard's group strategy sets the objective of reaching a profit margin of 2.0-2.5% by 2010.

- With a profit margin in 2008 of 3.2%, the objective for profitability has been achieved. Although we expect a slight drop in 2009, it is our ambi-tion to lift the profit margin to a level of around 5% in the space of a few years. We aim to achieve this by continued development and strength-ening of risk management, says Kristian May.

- The radical market changes have increased the pressure on prices in the Danish market. But we are maintaining our focus on profitability and the careful selection of new tasks both on an earnings basis and in rela-tion to other conditions. It can lead to a drop in activity, but that has to be accepted, states Kristian May.

- We expect that the building and construction market in Denmark will see a further decline in 2009. Utility services market will be at a lower level in 2009 than in 2008, and we foresee stable development in our international activities, where we will choose carefully among the project opportunities in relation to our own competences and resources. We are focusing particularly on foundations for offshore wind farms, an area where we are among the most experienced in the world, says Kristian May.

2008 in figures

Revenues were DKK 11,171 million, 5% less than last year

• Profit before tax was DKK 359 million
• Profit margin (pre-tax) was 3.2% compared to 2.7% in 2007 (2007: excluding one-off earnings of 1.7%)
• Equity amounted to DKK 1,442 million at year end (2007: DKK 1,231 million), which gave an equity share of 27.3% compared to 24.5% in 2007
• Return on capital employed was 29.7% in 2008 compared to 19.0% in 2007
• Cash flows from operating activities account for DKK 536 million compared to DKK (-)73 million in 2007

Expectations for 2009

The order book totalled DKK 9.5 billion at the end of 2008, of which DKK 6.5 billion is expected to be carried out in 2009. The quality of the order book is satisfactory.

• Revenues for 2009 are forecast at approx. DKK 10 billion. Reve-nues for foreign activities in 2009 are forecast to be at the same level as 2008.
• Continued strong financial resources on a par with the end of 2008
• Profit margin (pre-tax) between 2% and 3%