AF Gruppen ASA Q3 2024

15 November 2024

Overview

High activity level with improved profitability in the 3rd quarter

Revenue of NOK 7,204 (6,907) million in Q3 and NOK 22,043 (22,152) million year-to-date
Earnings before tax of NOK 289 (103) million in Q3 and NOK 496 (408) million year-to-date
Profit margin of 4.0% (1.5%) in Q3 and 2.2% (1.8%) year-to-date
Cash flow from operations of NOK 348 (494) million in Q3 and NOK 1,137 (697) million year-to-date
Order intake of NOK 5,393 (4,078) million in Q3 and NOK 16,493 (24,251) million year-to-date
Order backlog of NOK 36,442 (41,864) million as of 30 September 2024
Net interest-bearing debt of NOK 780 (1,381) million as of 30 September 2024

3rd quarter 2024

Health and Safety

Number of lost-time injuries and severe personnel injuries not resulting in lost-time, including subcontractor employees, per million hours worked

Number of lost-time injuries, injuries involving substitute work and medical treatment injuries, including subcontractor employees, per million hours worked

Revenues and earnings

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 NOK million Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 6,907 7,204

Return on Capital Employed

* Last four quarters

Interest expences added

* Rolling average last four quarters

The Group's target return on capital employed is 20%

Cash flow statement

NOK million	Q3 2024	Q3 2023	YTD 2024	YTD 2023	Cash flow from operations
EBIT	304	128	542	447	NOK million
Depreciation, amortisation and impairment	185	142	514	408	1,552
Change in net working capital	-101	240	285	62	1,600
Taxes paid	-24	-41	-142	-193	1,400
Other	-16	24	-62	-27	1,200
Cash flow from operations Net investments Dividend to shareholders in ASA Other capital transactions Interest paid and change in interest bearing debt	348 -57 0 -31 -161	494 -104 0 -22 -330	1,137 -278 -380 -336 30	697 -504 -700 -185 407	1,000 800 697 600 400 200
Net change in cash and cash equivalents	98	38	172	-285	0
Net cash and cash equivalents at beginning of period	411	494	347	765	2021 2022 2023
Change in cash and cash equivalents without cash effect	13	-7	3	45	YTD 2023
Net cash and cash equivalents end of period	522	526	522	526	YTD 2024

Net interest-bearing debt and liquidity

Components net interest-bearing receivables (debt)

Balance Sheet

NOK million	30.09.24	30.09.23	31.12.23
Non-current assets	8,703	8,242	8,407
Current assets, ex. cash	6,486	6,241	5,894
Cash and cash equivalents	522	526	347
Total assets	15,711	15,009	14,647
Equity	3,051	2,973	3,203
Long term debt	1,306	1,337	1,338
Short term debt			10,106
Total equity and debt	15,711	15,009	14,647

All the company's covenants exclude the effect of IFRS 16

Environment

¹ Regulatory requirement of 70%

YTD 2024

Recycling environmental parks Recycling rate 77% (78%) YTD in 2024

Business Areas

3rd quarter 2024

High activity and good profitability

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	2,353	1,680	6,797	4,636
EBIT	150	129	406	310
EBT	169	135	454	320
EBIT %	6.4%	7.7%	6.0%	6.7%
EBT %	7.2%	8.0%	6.7%	6.9%

Civil Engineering reports high activity and a good result in Q3
AF Anlegg deliver strong revenue growth and a good result in Q3. Målselv Maskin & Transport, VSP and Stenseth & RS deliver very good results
AF Anlegg was awarded a contract for expansion of a sewage treatment plant in Romerike. The collaboration contract has an expected value of NOK 1,000 million excl. VAT and will be included in the order backlog once phase 2 contract is signed
After the close of the quarter AF Anlegg announced the signing of phase 2 of the contract with Oslo kommune for new water treatment system in Huseby with a value of ca NOK 7,600 million excl. VAT
Order intake: NOK 1,684 (1,092) million. Order backlog: NOK 14,383 (19,441) million

Increasing order intake

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	2,016	2,285	6,499	7,549
EBIT	60	93	219	256
EBT	62	89	225	240
EBIT %	3.0%	4.1%	3.4%	3.4%
EBT %	3.1%	3.9%	3.5%	3.2%

Construction reports revenue decline of 12% relative to Q3 of last year. AF Bygg Østfold, Strøm Gundersen, Haga & Berg and ÅBF deliver very good results in the quarter. AF Byggfornyelse deliver good results
AF Bygg Oslo, Strøm Gundersen Vestfold, LAB and HTB have results somewhat below expectations, FAS reports results below expectations and AF Håndverk has a weak result in the quarter
Four new contracts were announced in the quarter with a combined value of NOK 550 million excl. VAT. After the close of the quarter Construction announced contracts with a combined value of approximately NOK 2,430 million, of which Diakonhjemmet Campus accounts for NOK 1,400 million excl. VAT
Order intake: NOK 1,317 (1,150) million. Order backlog: NOK 9,444 (9,335) million

Betonmast

Stable activity and improved profitability

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	1,061	1,059	3,045	3,382
EBIT	38	19	28	86
EBT	50	25	59	102
EBIT %	3.6%	1.8%	0.9%	2.6%
EBT %	4.7%	2.3%	1.9%	3.0%

Betonmast maintains activity levels from Q3 of last year
Betonmast Asker og Bærum delivers a very good result in the quarter. Trøndelag, Røsand, Innlandet, Buskerud-Vestfold and Østfold deliver good results
Betonmast Romerike has a result somewhat below expectations, and Betonmast Boligbygg and Oslo have weak results in the quarter
Three new contracts have been announced in the quarter with a combined value of NOK 521 million
Order intake: NOK 776 (1,047) million. Order backlog: NOK 5,027 (4,887) million

Property

Low sales

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	4	4	15	20
EBIT	-14	-4	-28	-9
EBT	-10	0	-16	0
Capital employed	937	792	937	792

An uncertain market sentiment and high interest rates affect sales negatively and contribute to low sales in the quarter. Sales contracts for 22 (5) residential units were signed in the quarter, whereof AF's share was 11 (2)
Three residential projects with a total of 368 units are in production (AF's share is 184). The sales ratio in commenced projects is 63%
Residential portfolio under development: 1,464 (1,629) units. AF's share: 742 (813)
Commercial portfolio under development: 73,407 (73,107) GFA sqm. AF's share: 36,524 (36,374)

Sweden

Continuing low profitability

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	1,165	1,567	3,927	5,644
EBIT	1	0	4	-135
EBT	-3	-4	-6	-141
EBIT %	0.1%	0.0%	0.1%	-2.4%
EBT %	-0.3%	-0.2%	-0.2%	-2.5%

Sweden still has large variations in the entities' performances
AF Prefab deliver very good results. Kanonaden og HMB deliver good results. AF Bygg Syd and AF Härnösand Byggreturer have results somewhat below expectations in the quarter. Remaining entities have weak results in Q3
HMB has entered a turnkey contract for the construction of 333 new apartments in Stockholm for Reliwe with a combined value of SEK 459 million excl. VAT
After the close of the quarter Kanonaden together with Hitachi Energy have been awarded a contract by Svenska kraftnät. Kanonadens share amounts to SEK 900 million excl. VAT with options of additional SEK 400 million excl. VAT
Order intake: NOK 1,245 (511) million. Order backlog: NOK 4,518 (5,156) million

Stable revenue and good result

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	383	381	1,109	994
EBIT	24	21	64	51
EBT	23	22	61	56
EBIT %	6.3%	5.6%	5.8%	5.1%
EBT %	6.0%	5.9%	5.5%	5.6%

Energy and Environment maintains activity levels compared to Q3 of last year and reports a good result in the quarter
AF Energi reports significant revenue growth from Q3 of last year with a very good result in Q3. AF Decom delivers a good result
AF Decom has so far this year sorted metal for recycling and recycled materials at the environmental centers corresponding to 24,356 (24,342) CO2-equivalents
Order intake: NOK 361 (300) million. Order backlog: NOK 1,186 (1,403) million

Offshore

Higher activity than same quarter last year

NOK million	Q3 24	Q3 23	YTD 3Q 24	YTD 3Q 23
Revenues	242	208	823	795
EBIT	14	-119	-206	-84
EBT	8	-126	-226	-98
EBIT %	6.0%	-56.9%	-25.0%	-10.6%
EBT %	3.2%	-60.2%	-27.5%	-12.3%

Aeron has strong revenue growth from Q3 of last year and delivers good profitability in the quarter
AF Offshore Decom maintains activity levels from Q3 of last year and has a weak result
As of the third quarter, metal sorted for recycling corresponds to savings of 13,878 (23,894) CO2-equivalents at AF Miljøbase Vats
Order intake: NOK 73 (125) million. Order backlog: NOK 1,702 (1,362) million

Considerable order intake after quarter close

Order Backlog Business Areas

Concrete: Trends and outlook

Q3 2024 | Theme presentation

Current situation for concrete

Globally

Concrete is one of the most widely used construction materials in the world
A considerable source of emissions
- estimated 5-7% of global greenhouse gas emissions

Norway

Concrete is a significant input factor in all construction projects
Considerable efforts are made in developing environmentally friendly solutions within concrete

Concrete

How do we work with concrete in AF Gruppen?

A wide range of our construction entities have specialised competencies within concrete

In total 800 employees

We experience increased demand for competance and capacity

«Internal forum for concrete» for developing competance, connections and arenas for innovation

Concrete

We have a wide range of projects in AF Gruppen

Norway is a leading country in developing robust concrete solutions

Concrete

Most concrete structures have a relatively similar distribution of input factors and cost allocation

Ongoing significant price pressures in 20 24 and beyond

Prices of concrete have increased: Prices have increased 60% from 2015 to 2024
Expected increase in Norwegian CO2 fees: Will increase costs for the industry. Norwegian CO2 fee increases by 19% in 2024 with further linear increases to reach the government goal of 2,000 in 2030
Largest effects from cement: Contributes to increased project costs
Increased energy prices: Increases production costs of concrete

Concrete

Future challenges

All construction projects include use of concrete - there are no alternative solutions
A shortage of input factors is expected in the future
New CO2-friendly binders create challenges related to progress and frost resistance
Still a considerable source of emissions