Nordecon

Investor Presentation • Feb 9, 2023

NORDECON

Investor presentation Q4 2022

Business model

Industrial buildings

Public buildings

Residential buildings

Commercial buildings

Other infrastructure Environmental engineering Utility networks

Specialist engineering Bridges, viaducts Port construction Rail construction

Road construction and maintenance Road construction Road maintenance

STRATEGIC AGENDA FOR 2019-2022

The Group will grow, mostly organically, with a focus on more efficient use of its existing resources.

In Estonia, we will operate, as market leader, in both the building and infrastructure construction segments.

In Sweden, we will focus on general contracting in Stockholm and the surrounding area.

In Finland, we will focus on general contracting and concrete works in Helsinki and the surrounding area.

In Ukraine, we will focus on general contracting and concrete works, primarily in Kiev and the surrounding area.

Improving profitability through more precise planning of our design and construction operations.

Increasing our design and digitalisation capabilities.

Simplifying and automating work and decision-making processes.

Monitoring the balance between the contract portfolios of different business segments.

Valuinq balanced teamwork where youthful energy and drive complement long-term experience.

Noticing and recognising each employee's individual contribution and initiative.

Revenue will grow at least 10% per year.

The contribution of foreign markets will increase to 20% of revenue.

Real estate development revenue will grow to at least 10% of revenue earned in Estonia.

Operating margin per year will be consistently above 3%.

Operating profit per employee will increase to at least 10 thousand euros per year.

On average, at least 30% of profit for the year will be distributed as dividends.

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FINANCIAL TARGETS

BUSINESS LINES AND MARKETS

ACTIVITIES

AJAMAJA OFFICE BUILDING AT ROTERMANNI 6

LOCATION Tallinn

customer Rotermann City OÜ

ARCHITECT KOKO architects

construction period April 2019 - April 2021

CONTRACTOR Nordecon AS

PROJECT MANAGER Oleg Kaas

Period In Brief

The group's revenue for 2022 was €322,860 thousand, roughly 12% larger than in 2021 when the group generated revenue of €288,543 thousand. The revenue of the Buildings segment grew by 21% while the revenue of the Infrastructure segment decreased by 14%. Revenue decline in the Infrastructure segment is attributable to cutbacks in the investments of the largest customer. the Transport Administration.	Nordecon ended 2022 with a gross profit of €8,495 thousand (2021: €4,021 thousand) and a gross margin of 2.6% (2021: 1.4%). Margin improvement was due to the Buildings segment, which strongly improved its gross märgin, whereas the Infrastructure segment ended both the fourth quarter and the year with a loss. Rising input prices and persisting difficulties with the supply of materials were the key factors affecting the overall performance.	The group's administrative expenses for 2022 amounted to €7,287 thousand. Compared with a year earlier, administrative expenses grew by 20% (2021: €6,053 thousand) due to a general uptrend in the cost of goods and services and growth in personnel expenses. The ratio of administrative expenses to revenue (12 months rolling) was 2.3% (2021: 2.1%).
The group earned an operating profit of €2,305 thousand in 2022 (2021: an operating loss of €4,336 thousand).	The group's order book stood at €149,799 thousand at 31 December 2022, reflecting a roughly 44% decrease year on year.	Operating activities produced a net cash inflow of €2,620 thousand in 2022 (2021: an inflow of €7,365 thousand).
EBITDA for the period amounted to €5,766 thousand and the EBITDA margin was 1.8% (2021: EBITDA was negative at €797 thousand and the EBITDA margin was (0.3)%).	In 2022, we signed new contracts of €163,498 thousand (2021: €314,758 thousand), of which contracts of €25.381 thousand in the fourth quarter (Q4 2021: €37,612).	Operating cash flow is increasingly affected by the need to make prepayments to materials suppliers, as well as increased contractual retentions, which extend from 5 to 10% of the contract price.

KOHTLA-JÄRVE SPORTS AND HEALTH CENTRE

LOCATION Kohtla-Järve, Ida-Viru County

CUSTOMER Kohtla-Järve City Government

ARCHITECT OU Zoroaster

CONSTRUCTION PERIOD April 2019 - March 2021

CONTRACTOR Nordecon AS

PROJECT MANAGER Oleg Kaas

REVENUE AND OPERATING PROFIT

The gross margins of the Buildings segment were 4.1% for the full year and 6.7% for the fourth quarter of 2022 compared with 2.0% for the full year and (0.7)% for the fourth quarter in 2021.

The gross margins of the Infrastructure segment, were (2.4)% for the full year and (12.1)% for the fourth quarter compared with 1.0% for the full year and (1.4)% in 2021.

Figure / Ratio		12M 2020 12M 2021 12M 2022
Revenue (EUR '000)	296 082	288 534	322 860
Revenue change	26,5%	-2,5%	11.9%
Net profit/loss (EUR '000)	4 118	-5 506	-1 441
Gross marqin	3.7%	1.4%	2.6%
EBITDA margin	2.4%	-0,3%	1,8%
Net marqin	1.4%	-1,9%	-0.4%
Administrative expenses to revenue (12 month rolling)	2.4%	2.1%	2,3%

NORDECON

RAATUSE HEALTH CENTRE

LOCATION Tartu city

customer Tạrtu Kesklinna Perearstikeskus ou

DESIGNER U-Disain OÜ

CONSTRUCTION PERIOD February 2020- August 2021

CONTRACTOR Nordecon Betoon OÜ/ Embach Ehitus OU

PROJECT MANAGER Ahti Kala

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Revenue by Geographic Regions

	12 M 2020	12 M 2021	12 M 2022
Estonia	82%	94%	96%
Finland	6%	3%	2%
Latvia	0%	0%	1%
Lithuania	0%	1%	1%
Ukraine	1%	2%	0%

dropping to 4% of the group's first months of the war but mainly total revenue for 2022.

since the second quarter subcontracting revenue from resumed work on selected concrete works. projects.

consist

The revenue contribution of Dueto Russia's military invasion The group did not generate any foreign markets decreased of Ukraine, our subsidiary project basis in Latvia and had no ongoing substantially year on year, halted its operations during the Lithuania, Finnish contracts in the of Swedish market.

Order book and revenues

The group's order book stood at €149,799 thousand at 31 December 2022, reflecting a roughly 44% decrease year on year.

The Buildings segment continues to dominate with 88% of the order book while the share of the Infrastructure segment is 12% (31 December 2021: 87% and 13%, respectively).

The order books of both segments have decreased compared with 31 December 2021: by 45% and 32%, respectively.

ORDER BOOK

KINDLUSE SCHOOL

LOCATION Rae, Harju County

customer Rae Rural Municipality Government

DESIGNER Sweco Projekt AS

construction period November 2019 - May 2021

CONTRACTOR Nordecon AS

PROJECT MANAGER Silver Sein

Revenue distribution

In 2022, the Buildings segment and the Infrastructure segment generated revenue of €260,585 thousand and €62,048 thousand, respectively. The corresponding figures for 2021 were €216,070 thousand and €72,115 thousand.

The largest revenue contributors in the Buildings segment were the public buildings and the apartment buildings subsegments, which increased their revenue by 31% and 21%, respectively.

The strongest revenue growth (57%) was delivered by the industrial and warehouse facilities subsegment, which contributed 18% to the revenue of the Buildings segment.

In the Infrastructure segment, the largest revenue contributor is still road construction and maintenance although its revenue has decreased year on year by roughly 28%.

NORDECON

COOP/KONSUM SUPERMARKET

LOCATION Käina, Hiiu County

customer Hiiumaa Consumers Cooperative Association

ARCHITECT DAGOpen Arhitektuuribüroo

CONSTRUCTION PERIOD December 2020— June 2021

CONTRACTOR Nordecon Betoon OÜ

PROJECT MANAGER Reino Mälk

Share and shareholders

Largest shareholders in Nordecon AS at 31 December 2022

Shareholder	Number of shares	Ownership interest (%)
AS Nordic Contractors	16 563 145	51.16
Luksusjaht AS	4 322 342	13.35
Toomas Luman	700 300	2.16
Olegs Radcenko	574 200	1.77
Lembit Talpsepp	376 239	1.16
Nõmme Erahariduse SA	370 370	1.14
SEB Pank AS clients SEB Life and Pension Baltic SE	300 000	0.93
Estonian branch	255 000	0.79
Genadi Bulatov	250 600	0.77
Endel Palla	200 000	0.62

Index/equity		1 January 2022* 31 December 2022	+ / -
OMX Tallinn	2,001.03	1,766.73	(11.71)%
PNCN1T	€1.2	€0.69	(42.5)%

NORDECON

Nordecon AS Tel: +372 615 4400 www.nordecon.com Toompuiestee 35, Tallinn 10149 Estonia

Head of Investor Relations Andri Hõbemägi Tel: +372 615 4400 andri.hobemagi@nordecon.com