AF Gruppen

Earnings Release • May 15, 2024

AF Gruppen ASA Q1 2024

15 May 2024

AF Anlegg rehabilitating Nesjødammen for Statkraft Energi. Photo: Hans Fredrik Asbjørnsen

Overview

Improved results and stable order backlog

• Revenue of NOK 7,187 (7,393) million in Q1
• Earnings before tax of NOK 186 (13)
• Profit margin of 2.6% (0.2%)
• Cash flow from operations of NOK 128 (-24)
• Order intake of NOK 5,472 (9,296) million in Q1
• Order backlog of NOK 40,275 (41,668) million as of 31 March 2024
• Net interest-bearing debt of NOK 974 (570) million as of 31 March 2024
• The Board of Directors suggest a dividend of NOK 3,50 (6,50) per share to be paid out

1 st 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

Return on Capital Employed

Earnings before tax and interest expense * 2,000 NOK million

* Last four quarters

Interest expences added

* Rolling average last four quarters

1 st quarter 2024

Cash Flow Statement

NOK million	Q1 2024	Q1 2023	2023
EBIT	201	15	749
Depreciation, amortisation and impairment	156	131	576
Change in net working capital	-158	-63	675
Taxes paid	-58	-81	-470
Other	-13	-27	22
Cash flow from operations	128	-24	1,552
Net investments	-110	-77	-613
Dividend	-49	-53	-842
Other capital transactions	-157	-30	56
Interest paid and change in interest bearing debt	190	50	-615
Net change in cash and cash equivalents	2	-134	-462
Net cash and cash equivalents at beginning of period	347	765	765
Change in cash and cash equivalents without cash effect	0	45	44
Net cash and cash equivalents end of period	348	677	347

Cash flow from operations

Net Interest-bearing Debt and Liquidity

Components net interest-bearing receivables (debt)

Balance Sheet

NOK million	31.03.24	31.03.23	31.12.23
Non-current assets	8 543	7 859	8 407
Current assets, ex. cash	6 146	6 643	5 894
Cash and cash equivalents	348	677	347
Total assets	15 038	15 180	14 647
Equity	3 288	3 458	3 203
Long term debt	1 389	1 323	1 338
Short term debt	10 360	10 399	10 106
Total equity and debt	15 038	15 180	14 647

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

Environment

¹ Regulatory requirement of 70%

5,938 tonnes = 5,938 (16,193) tonnes CO² -equivalents saved

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

63,923 tonnes = 5,164 (3,587) tonnes CO² -equivalents saved

Business Areas

1 st quarter 2024

10

Very High Level of Activity and Good Result

NOK million	Q1 24	Q1 23	2023
Revenues	2,044	1,451	6,776
EBIT	116	77	550
EBT	131	78	572
EBIT %	5.7%	5.3%	8.1%
EBT %	6.4%	5.4%	8.4%

• Civil Engineering increases revenues by 41% compared to the same quarter last year and reports a good result in the first quarter of the year
• AF Anlegg reports record high quarterly turnover in the quarter and a good result, with solid profit contributions from several projects. There is generally high activity and good operations in the projects
• Målselv Maskin & Transport and Stenseth & RS report good results in Q1. VSP reports a result below expectations. Eiqon has a low level of activity and a weak result this quarter
• Order intake: NOK 508 (3,599) million. Order backlog: NOK 16,604 (17,517) million

Construction

Improved Profitablity and Solid Order Intake

NOK million	Q1 24	Q1 23	2023
Revenues	2,203	2,591	10,182
EBIT	64	51	396
EBT	66	46	378
EBIT %	2.9%	2.0%	3,9%
EBT %	3.0%	1.8%	3,7%

• Construction has a revenue decrease of 15% and improved profitability compared to the corresponding quarter last year
• AF Bygg Østfold reports very good results in Q1. AF Byggfornyelse, Haga & Berg, Strøm Gundersen, Strøm Gundersern Vestfold, ÅBF and HTB report good results
• AF Bygg Oslo has a result somewhat below expectations this quarter. LAB Entreprenør has results below expectations. AF Håndverk and FAS have weak results
• Construction announced seven new contracts to the stock exchange this quarter with an estimated value of NOK 2,356 million excluding VAT.
• Order intake: NOK 3,386 (1,887) million. Order backlog: NOK 10,647 (9,342) million

Betonmast

Reduced Level of Activity and a Negative Result

NOK million	Q1 24	Q1 23	2023
Revenues	1,005	1,206	4,553
EBIT	-20	34	34
EBT	-11	40	58
EBIT %	-2.0%	2.8%	0,7%
EBT %	-1.1%	3.3%	1,3%

• Betonmast has a revenue decrease of 17% compared to the same quarter last year and a negative result for the quarter
• Betonmast Røsand and Østfold report good results in the quarter. Buskerud-Vestfold and Innlandet have results somewhat below expectations
• Romerike and Asker og Bærum have results below expectations. Oslo, Boligbygg and Trøndelag have weak results
• Order intake: NOK 342 (1 906) million. Order backlog: NOK 5,539 (5,115) million

Property

Low Sales and Uncertain Market Sentiment

NOK million	Q1 24	Q1 23	2023
Revenues	6	10	27
EBIT	-7	-1	-20
EBT	-3	1	-8
Capital employed	870	678	818

• A challenging property market with high interest has contributed to low sales. Sales contracts for 19 (20) residential units were signed in the quarter, AF's share was 8 (9). A total of 103 units were handed over in the quarter
• AF Eiendom has together with a partner completed the purchase of the plot Ullevålsveien 114 in the quarter
• Three residential projects with a total of 735 residential units are in production (AF's share is 319). The sales ratio in commenced projects is 70%
• Residential portfolio in development: 1,707 (1,580) units. AF's share: 852 (788) Commercial portfolio in development: 73,407 (58,899) GFA sqm. AF's share: 36,524 (29,270)

Sweden

Revenue Decline and Break-Even Result

NOK million	Q1 24	Q1 23	2023
Revenues	1,361	1,927	7,501
EBIT	2	-162	-152
EBT	0	-163	-160
EBIT %	0.1%	-8.4%	-2,0%
EBT %	0.0%	-8.5%	-2,1%

• Sweden has a revenue decline of 29% compared to the corresponding quarter last year and a weak result in the 1st quarter
• AF Prefab Mälardalen contributes with a very good result and Kanonaden has a good result in the 1st quarter. AF Bygg Syd and AF Härnösand Byggreturer report results somewhat below expectations and HMB has a weak result this quarter
• The former Betonmast Sweden business units had negative results this quarter
• Order intake: NOK 905 (1,934) million. Order backlog: NOK 4,672 (7,645) million

Revenue Growth and a Good Result

NOK million	Q1 24	Q1 23	2023
Revenues	338	287	1 417
EBIT	17	11	90
EBT	17	13	96
EBIT %	5.1%	3.7%	6,3%
EBT %	5.1%	4.4%	6,8%

• Energy and Environment increased revenues by 18% compared to the same quarter last year, and reports a good result in the 1st quarter
• AF Energi has significantly increased the activity level compared to the corresponding quarter last year. High activity and good operations in the projects contribute to a very good result in the 1st quarter
• AF Decom has increased revenues compared to the same quarter last year with a result somewhat below expectations
• AF Decom has during 1st quarter sorted metal for recycling and recycled materials at the environmental centers corresponding to 6,330 (8,129) CO² -equivalents
• Order intake: NOK 347 (341) million. Order backlog: NOK 1,258 (694) million

Offshore

Increased Level of Activity this Quarter

NOK million	Q1 24	Q1 23	2023
Revenues	295	244	1 082
EBIT	14	18	-124
EBT	7	16	-139
EBIT %	4.7%	7.2%	-11,5%
EBT %	2.3%	6.4%	-12,9%

• Offshore has increased its level of activity compared to the same quarter last year
• Aeron maintains a high level of activity and reports good profitability in the 1st quarter
• AF Offshore Decom has completed several offshore campaigns this quarter and reports a weak result in the 1st quarter
• Metal sorted for recycling during the 1st quarter corresponds to savings of 4,772 (11,651) CO² -equivalents at AF Miljøbase Vats
• Order intake: NOK 183 (175) million. Order backlog: NOK 1,297 (1,625) million

1 st quarter 2024

Stable Order Backlog

Energy

Q1 2024 | Theme presentation

Construction City. Foto: Eirik Førde

Good Growth and Profitability

All numbers: Q1 2024

20 Fredrikstad Avløpsrenseanlegg. Foto: AF Gruppen From Radiumhospitalet. Photo: AF Gruppen

AF Energi Delivers Energy-efficient and Industrialised Solutions that Society Needs

Energy

Broad Project Portfolio with Diversified Customer Groups

COMMERCIAL BUILDINGS

PROJECT Møller Bil

PROJECT

Vestlia Hotel

CUSTOMER Møller Eiendom

CUSTOMER Vestlia Resort

AIRPORTS

PROJECT Oslo Airport Gardermoen CUSTOMER Avinor

HOSPITALS

PROJECT	CUSTOMER
Radiumhospitalet	Helse Sør-Øst RHF

HOTELS HOUSING UNIVERSITIES

PROJECT Life Science Building CUSTOMER Statsbygg

Energy

Life Science Building

Norway's largest university building at 97,500 square meters with a overall cost limit of NOK billion 12.5.

• Project value NOK million 680.
• Social mission Facilitating interdisciplinary collaboration to solve major social challenges within health and environment.
• Execution Implementation agreement includes sanitary, heating, fire extinguishing, gas and compressed air, process- and comfort cooling.

The contract is the largest to date entered by AF Gruppen's energy division

Radiumhospitalet

Radiumhospitalet is Norway's leading cancer hospital with the country's first proton therapy center.

• Project value NOK million 90.
• Social mission Contribute to better treatment options in Norway, with functional and energyefficient solutions.
• Execution Establish energy hub and cooling system for the new clinic and proton building.
• Focus area Optimise efficient prefabrication to ensure that equipment and materials arrive at the right place, at the right time, and with the correct quality.

The Big Picture: Development of Future Energy Sectors

Bioenergy is a preferred renewable energy source and a central part of future energy solutions as fossil fuels are phased out and district heating systems are expanded.

Illustration: Enova.no

New Area: Bioenergy

ETA Norge AS is Norway's leading supplier of bioenergy

• Environmentally friendly
• No emission of greenhouse gases
• Efficient resource utilisation
• Versatile (complements solar/wind/district heating)
• Efficiently utilises residual products

Bioenergy is a preferred renewable energy source and is a central part of future energy solutions as fossil fuels are phased out.

Energy

Solution Combining Renewable Energy Sources

Energy

Our Curiosity Moving Forward

• Energy and environment-related services
• Solution for reducing energy consumption
• Further develop competencies in sustainable and functional solutions that provide value
• Efficient and industrialised project implementation

1 st quarter 2024

Summary

NOK million	Q1 24	Q1 23	2023
Revenues	7,187	7,393	30,530
EBIT	201	15	749
EBT	186	13	700
EBIT %	2.8%	0.2%	2,5%
EBT %	2.6%	0.2%	2,3%

• Improved results
• Strong financial position
• Order intake: NOK 5,472 (9,296) million
• Stable order backlog: NOK 40,275 (41,668) million
• The Board of Directors suggests a dividend of NOK 3,50 (6,50) per share to be paid in the first half of 2024

Thank you for your attention

Presentation of Q2 30 August 2024

AF Decom decommissioning the Earth Observatory in Ny-Ålesund. Photo: Dag S. Roland