AF Gruppen ASA Q4 2021

11 February 2022

Highlights

AF Gruppen with good profitability and solid order backlog

Revenue: NOK 8,112 (7,485) million in Q4 and NOK 27,868 (27,025) million for the full year
Earnings before tax: NOK 635 (614) million in Q4 and NOK 1 580 (1 447) million for the full year
Profit margin: 7.8 % (8.2 %) in Q4 and 5.7 % (5.4 %) for the full year
Cash flow from operations: NOK 301 (-86) million in Q4 and NOK 1 415 (1 189) million for the full year
Order backlog: NOK 38,646 (30,617) million as of 31 December 2021
Net interest-bearing debt of NOK -29 (-90) million as of 31 December 2021
Earnings per share in 2021: NOK 9.60 (9.29). The board of directors suggests a dividend of NOK 6.50 (6.50) per share to be paid in the first half of 2022

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 – quarterly

Return on capital employed

Interest expences added

Cash flow statement

NOK million	Q4 2021	Q4 2020	2021	2020
EBIT	639	633	1 609	1 480
Depreciations, amortisation and impairment	139	169	567	573
Change in net working capital	-316	-472	-340	-233
Other adjustments / taxes paid	-162	-415	-422	-631
Cash flow from operations	301	-86	1 415	1 189
Net investments	202	234	184	112
Cash flow from capital activities	-303	-277	-1 187	-808
Interest paid and change in interest bearing debt	-98	-47	-387	-357
Net change in cash and cash equivalents	101	-176	25	135
Net cash and cash equivalents at beginning of period	593	893	708	563
Change in cash and cash equivalents without cash effect	-14	-9	-52	10
Net cash and cash equivalents end of period	680	708	680	708

Available liquidity: NOK 3,636 million (including financial facilities of NOK 3,000 million)

Balance sheet

NOK million	31.12.21	31.12.20
Non-current assets	7,490	7,760
Current assets, ex. cash	4,937	4,394
Cash and cash equivalents	680	708
Total assets	13,108	12,862
Equity	3,572	3,494
Long term debt	1,343	1,426
Short term debt	8,193	7,942
Total equity and debt	13,108	12,862

*Equity ratio excluding the effect of IFRS 16 would be 28.7% at 31.12.21 All the company's covenants exclude the effect of IFRS 16

Environment

¹ Regulatory requirement of 60%

55,796 tonnes = 55,796 (38,533) tonnes CO -equivalents saved

344,437 tonnes = 26,896 (32,266) tonnes CO -equivalents saved

Business areas

4 th quarter 2021

Strong profitability improvement

NOK million	Q4 21	Q4 20	2021	2021
Revenues	1,522	1,558	6,002	5,218
EBIT	221	141	515	314
EBT	220	123	510	292
EBIT %	14.5%	9.0%	8.6%	6.0%
EBT %	14.5%	7.9%	8.5%	5.6%

Strong profitability improvement both in the quarter and for the full year. Solid operations in all units
Very good results in Målselv Maskin & Transport and AF Anlegg. Eiqon and Consolvo reported revenue growth and good profitability in the quarter
AF Anlegg has signed a contract with Statkraft to renovate Nesjø dam in Tydal. The contract is valued at approximately NOK 235 million excluding VAT
After quarter end, AF Gruppen announced a contract for building the new water distribution tunnels with Oslo municipality, in collaboration with the Italian company Ghella. The contract has an approximate value of NOK 8,750 million excluding VAT for the collaboration. AF Gruppen's share is 60%
Order backlog: NOK 6,878 (7,319) million

Somewhat weaker profitability in the quarter

NOK million	Q4 21	Q4 20	2021	2021
Revenues	2,839	2,247	8,865	8,684
EBIT	154	154	447	502
EBT	154	157	450	513
EBIT %	5.4%	6.8%	5.0%	5.8%
EBT %	5.4%	7.0%	5.1%	5.9%

Haga & Berg, AF Bygg Oslo and Strøm Gundersen reported excellent results in the quarter. AF Bygg Østfold and Åsane Byggmesterforretning also reported good results
AF Nybygg's portfolio was transferred to AF Bygg Oslo in the third quarter. The project portfolio from AF Nybygg was written down with NOK 20 million in Q4
Price developments on raw materials (wood and steel) is challenging in several projects
Haga & Berg signed a contract with SEFF Holding to renovate Kjølberggata 31 at Tøyen in Oslo. The contract has a value of NOK 136 million excluding VAT
Order backlog: NOK 13,549 (9,674) million

Weak profitability, but large variation in the results of the various units

NOK million	Q4 21	Q4 20	2021	2021
Revenues	2,090	2,116	7,170	7,862
EBIT	68	88	171	261
EBT	62	86	149	252
EBIT %	3.3%	4.2%	2.4%	3.3%
EBT %	3.0%	4.0%	2.1%	3.2%

The overall profitability is still weak, however there is large variation in the results of the various units
Good results from Betonmast Oslo, Romerike, Østfold, Trøndelag and Buskerud-Vestfold in the quarter following solid operations and projects in the final phase
Betonmast Boligbygg and Telemark reported weak results. Further write-downs were made to the portfolio of Boligbygg. Telemark will be sold after quarter end
Betonmast Sverige reported weak profitability in the quarter. After quarter end, AF Gruppen bought Betonmast's Swedish business. The transaction will be concluded ultimo Q1. Betonmast Sverige will going forward be a part of AF Gruppen's business area Sweden
Order backlog: NOK 11,400 (7,274) million

Property

Good sales in the quarter, seven projects in production

NOK million	Q4 21	Q4 20	2021	2021
Revenues	15	15	35	33
EBIT	32	95	75	135
EBT	33	93	76	132
Capital employed	703	844	703	844

Good sales in the quarter, particularly in AF Eiendom's project Bekkestua Have and Rolvsrud Idrettspark
In total 135 (90) units were sold in the quarter, whereof AF's share was 60 (37)
Seven projects with a total of 848 units are in production (AF's share is 379). Sales ratio on commenced projects are 83%
Residential portfolio under development: 1,715 (2,133) units. AF's share: 821 (1,048)
Commercial portfolio under development: 51,856 (137,380) BTA sqm. AF's share: 25,749 (39,996)

Revenue growth and very good results

NOK million	Q4 21	Q4 20	2021	2021
Revenues	1,309	1,169	4,325	4,138
EBIT	125	88	262	219
EBT	124	87	257	212
EBIT %	9.6%	7.5%	6.1%	5.3%
EBT %	9.5%	7.4%	6.0%	5.1%

Sweden reported revenue growth and strong profitability in the quarter
Kanonaden, HMB and AF Härnösand Byggreturer continue to report very good results with solid operations
AF Bygg Syd reported weak profitability in the quarter due to variations in the project portfolio
Cementa, which is the main supplier of cement to the Swedish construction industry, was granted a temporary permission to produce lime through 2022. The price development on raw materials (wood and steel) is challenging also in Sweden
Five contracts were announced in Q4, with a total value of SEK 742 million ex. VAT
Order backlog: NOK 4,766 (4,120) million

High activity and very good results

NOK million	Q4 21	Q4 20	2021	2021
Revenues	312	294	1,152	962
EBIT	52	22	109	54
EBT	53	21	107	52
EBIT %	16.7%	7.5%	9.4%	5.6%
EBT %	17.1%	7.0%	9.3%	5.5%

Energy and Environment reported growth and very good results in the fourth quarter
AF Decom increased its activity and continues to report very good results. AF Decom has in 2021 sorted metal for recycling and recycled materials at the environmental centers corresponding to 41 702 (51 646) CO² -equivalents
AF Energi reported very good results in the quarter. The result was affected by a settled dispute and final settlement
AF Energi was nominated by the South-Eastern Norway Regional Health Authorities for the contract to build the heating and cooling facilities at the new Drammen Hospital. The contract is worth approximately NOK 200 million excluding VAT
Order backlog: NOK 714 (703) million

Offshore

Revenue growth and a strong profitability improvement

NOK million	Q4 21	Q4 20	2021	2021
Revenues	225	162	848	672
EBIT	40	15	83	-25
EBT	37	10	78	-40
EBIT %	17.6%	9.1%	9.8%	-3.7%
EBT %	16.6%	5.9%	9.2%	-5.9%

Offshore reported a strong revenue growth and very good results in the quarter
AF Offshore Decom had high activity and very good profitability following high production and solid operations at AF Miljøbase Vats, as well as a successful prepcampaign
AF Offshore Decom has in 2021 sorted metal for recycling corresponding to 40 990 (19 153) CO² -equivalents
AF AeronMollier reported a somewhat lower revenue compared to the same quarter last year, but maintained results in the quarter
Order backlog: NOK 1,515 (1,365) million

Strong order backlog

PROFITABLE SOCIETAL CHALLENGES.

Business Area Energy and Environment

2021

Revenues (NOK million)

clean-up EBIT %

Services Lost-time injury frequency (LTIF)

Business units
AF Decom
- Nes Miljøpark
- Rimol Miljøpark
- Jølsen Miljøpark
AF Energi
- Enaktiva
- AF Energija Baltic

AF Gruppen aims to be leading in creating socially beneficial business opportunities that will contribute to solving our times great environmental and societal challenges

Energy efficient, renewable and environmentally friendly solutions

Made 2 million m² more energy efficient

Energy production corresponding to 15.000 housings
New energy sources: Geothermal heating, seawater, sewage and solar energy
Energy savings of 27 million kWh annually
Consumption data enables guaranteed price savings

Profitable – both for clients and the environment

17 C

A climate neutral Europe by 2050 .
Buildings make out approximately . 40% of the consumption
Norway; Improving energy efficiency to phase out fossil energy sources in the industry
AF reduces energy consumption and . establishes local energy production

Provides the entire service specter in a growing energy market

· Environmental competence
Energy solutions with a guaranteed result
150 experts .

1866

FREE

Statnett - safe environmental clean-up and removal of old power lines. Clearing up the past with innovative environmental solutions I

209 power poles were removed and recycled
· 10 km power lines were 12 detonated in 115 simultaneous charges

26 -

Norway's largest clearing job gentle clearing and recycling

The environmental project in Lunckefjell and Svea is the largest nature restoration project that has ever been completed in Norway.

When the area is abandoned, the glaciers and mountain sides should appear as unaffected as possible

Environmental parks receive contaminated mass and clean it in an environmentally secure way

344,000 tonnes recycled in 2021 -
79% recycling rate 1
Sand 291
· Crushed stone, sand and gravel
Asphalt
Concrete

Profitable societal challenges

Decom X

Remotely controlled machines that reduce risk and increase efficiency

Search dogs

Secure environmental clean-up performed by search dogs

Securing areas exposed to avalanches

Complex explosive demolition projects both onshore and offshore

Strategy 2020-2024

Internal professional competence that gives AF Gruppen a competitive advantage
Top three in our markets
Seeking growth in new markets where we can exploit our competence within project industry
Seeking increased productivity and competitiveness through continuous improvement, innovation and digitalisation