Nature of the enterprise
4Service Holding AS is the parent company within the 4Service Holding Group. Its business includes the provision of Facility Services, staff canteens, restaurants, catering, cleaning, as well as delivery of catering services, kitchen operations and related activities at construction camps, on board ships and at offshore installations.
Facility Services are provided under the following brands: De 3 Stuer, Eir Mat og Drikke, Søtt+Salt, Gastro, and Eir Renhold. Additionally, customised brands have been established in cooperation with those customers who have signed full service contracts, which include the delivery of services such as restaurants and co-working spaces un the brand name Tribe og Events.
The onshore element of the catering services business comprises Camp which supplies construction hotels under the brands 4Service and Eir Camp. The offshore business includes contracts where the company supplies catering to various rigs on the Norwegian continental shelf under the 4Service brand.
True overview of development and profit/loss
It is hereby confirmed that the financial statements presented provide a true overview of the company’s development, profit/loss and financial position. No events have occurred between 31/12/2020 and the present that are of any significance to the company and change the above assessment. The Board of Directors and management team continuously assess the status of the company’s mode of operation, duties and personnel.
The 4Service Holding AS Group had a total operating income in 2020 of NOK 2,104 million, which was a reduction of 3 % compared to 2019 (NOK 2,178 million). EBITDA for 2020 was NOK 200.4 million compared to NOK 208.2 million in 2019. Consequently, profitability was on a par with that of 2019. The pre-tax profit/loss for the year was NOK 50.2 million, of which NOK -1.9 million is the share of non-controlling interests. The profit after tax amounted to NOK 37.9 million compared to a profit of NOK 75.2 million in 2019.
Total ordinary investments in tangible fixed assets in 2020 amounted to NOK 47.7 million (2019: NOK 46.8 million) across the Group. Total assets at year-end amounted to NOK 1,811.0 million. The total available working capital stands at NOK -147.5 million. The company has an unused drawdown reserve amounting to NOK 105 million and the company’s situation in terms of liquidity is deemed to be good.
Total equity including non-controlling stakes amounted to NOK 234.1 million at year-end, which corresponds to an equity ration of 13 % as compared to 11 % the year before. At the end of 2020, minority interests amounted to NOK 1.4 million. The Group’s financial position is deemed to be good.
Cash flow for the year is characterised by good operations with a focus on the balance sheet. The Group’s net cash flow from operating activities amounted to NOK 220.1 million (NOK 141.1 million). Net cash flow from investing activities amounted to NOK -52.9 million (NOK -206.7 million). Net cash flow from financing activities amounted to NOK -163.6 million (NOK 94.3 million). Holding of cash and cash equivalents at the end of 2020 amounted to NOK 92.8 million. The corresponding figure for 2019 was NOK 89.2 million.
4Service Holding AS recorded a profit in 2020 of NOK 0.0 million. The parent company has an equity ratio of 29 % and the company’s financial position is deemed to be good.
Statement on the company’s outlook
2020 saw a decline in the overall markets for the company’s services, especially in the canteen and catering sectors. This was due to COVID-19, which has led to a temporary fall in demand for the Group’s food services in relation to commercial buildings. Our estimates show a reduction of approx. 25 % in total across the Group. The Group’s market share in 2020 rose and it aims to continue in a similar vain in 2021. The general market outlook is good. The Board of Directors continuously assesses a variety of partnerships and acquisitions that may enable the Group to further develop.
Throughout 2020, the Group showed excellent resourcefulness, reduced its costs and demonstrated that its underlying operations are both scalable and robust. At the same time, the Group has recorded significant growth across all areas during 2020 in terms of new sales that are expected to materialise during the course of 2021. COVID-19 was and remains challenging to areas of our business, but at the same time it has represented an opportunity for the Group to restructure, revitalise and innovate in a way that means the Group is now better equipped for the opportunities that are to come. Development has continued during the beginning of 2021 following the same trends noted in 2020, but we have also seen consistently positive signals from across all business areas during 2021. Our investment in sales, including in the midst of a demanding period in 2020, is paying dividends through a constant stream of new contracts across all business areas. Our existing portfolio and new contracts mean that we anticipate a return to our long-term plan by the end of 2021.
Going concern
Based on the above statement of the Group’s profit/loss and financial position, the Board of Directors hereby confirms that the financial statements for 2020 have been prepared on the going concern basis and that they provide a true picture of the Group’s assets and liabilities, financial position and profit/loss. The Group remains in its developmental phase and it is its goal to consolidate and exploit synergies in 2021 while organic growth continues.
Working environment
The Board of Directors considers the company to have a good working environment. No special measures have been implemented in this regard. Sixteen meetings of the Working Environment Committee were held across four committees in total. During 2020, 41 workplace injuries to employees were reported. 24 of these injuries caused employee absences, while 17 of them required medical treatment. These injuries were primarily burns, cuts and injuries incurred in falls, as was the case in 2019. The introduction of cut resistant gloves and the delivery of training on appropriate carrying and lifting techniques were both measures implemented to reduce the risk of injury. In 2020, the Group provided 71,335 instances of courses, registrations and training via our training platform. In 2020, the 4Service Group achieved certification in accordance with ISO 9001:2015 and ISO 14001:2015. Short-term absences in the Group amounted to 2.5 % (2.5 %) and long-term absences amounted to 3.5 % (3.8 %). The 4Service Holding Group emphasises the creation of a safe working environment in all of our workplaces.
Equal opportunities
At year-end, the Group had 3,336 employees, of which 59 % were women and 41 % were men. Working hours and salaries are fairly distributed between the sexes. There are 6 members of the Board of Directors, including a deputy member, of which one person is a woman. The Group’s stated HR policy is to be gender neutral in all areas of the business. The Group aims to be a workplace where there is no discrimination and therefore consciously seeks to ensure equality between male and female applicants during recruitment processes. Throughout all processes, it is the principle of competence that guides all decisions made. The 4Service Holding Group seeks to be an attractive employer to people from a range of backgrounds, regardless of their ethnicity, gender, religion or age.
External environment and sustainability
The Group does not engage in any activities that contaminate the external environment. In 2020, the Group undertook several initiatives seeking to develop a conscious position on sustainability. At present, the Group is a large workplace that leaves behind a large, overall footprint every single day. During 2020, we secured certification for the Group in accordance with ISO 14001:2015, while also putting the spotlight on following up on goals and outcomes that relate to the environment. In 2020, a sustainability report was prepared by an external, independent party. We measure food waste in the majority of our canteens and have invested in electric vehicles. In 2020, we won the prestigious Matprisen culinary award for large-scale kitchen of the year thanks to our work on sustainable seafood. In 2020, we appointed our own social sustainability officer to work in a targeted fashion on the inclusion of people through training, workplace education and personnel development.
Research and development
In 2020, 4Service further developed and strengthened the position of IZY, our market-leading digitalisation initiative for Facility Services. This solution transforms business models and patterns of action through the use of technology to help landlords, tenants and building users. By focusing on user experiences, this has delivered a unique market position and in excess of 30,000 daily users across 29 buildings. This solution brings all user service requirements in any given commercial building together into one mobile solution that is just a tap away.
The goal is to contribute to smart cities and smart buildings through connections to IT infrastructures and smart city and building solutions, while also contributing to increased interaction between people and technology. This will make it possible to strengthen the local business sector, contribute to providing better service to industry, residents/users and ensure the smart operation of buildings and facilities. By digitalising processes, we increase the use of technology such as cloud-based services, sensors, portable smart devices and communications solutions that create added value for users, while also supporting a number of the UN’s Sustainable Development Goals.
Financial risk
Financial market risk
The Group is exposed to financial market risk through interest-bearing debts to credit institutions. These amounted to NOK 742 million at year-end. The floating interest rate on the loan is partially converted to a fixed rate through the purchase of interest derivatives (interest swap). As at 31/12/20, a total of 17 % had been converted to fixed rates. The Group has significant exposure to exchange rate fluctuations.
Credit risk
The risk of losses on receivables is considered to be low. The Group has not to date had significant losses on its receivables. Gross credit exposure as at the balance sheet date amounted to a total of NOK 310.8 million. The Group has not entered into any set-off agreements or other derivative agreements in order to reduce its credit risks.
Liquidity risk
The Board of Directors considers the Group’s liquidity to be good, with a cash balance as at 31/12/2020 of NOK 92.8 million, in addition to drawing facilities available via the Group’s bank.
Allocation of this year’s profit/loss
As per the income statement.
Other matters
The Board of Directors is not aware of any matters of material significance to the assessment of the company’s position and profit/loss that are not set out in the profit and loss account and balance sheet with accompanying notes. Furthermore, no matters have arisen following the end of the financial year that are, in the view of the Board of Directors, of any significance in the assessment of the financial statements.
It is the view of the Board of Directors that given the company’s current state of development, conditions for further operations and development are good.
Oslo, 29 April 2021
Board of Directors of 4Service Holding Group
