February 14th 2020
Fourth Quarter 2019 AF Gruppen ASA
Highlights
Stable growth and strong earnings
- Revenue: NOK 6,465 million (5,656) in Q4 and NOK 22,612 million (18,767) for the full year
- EBT: NOK 388 million (373) in Q4 and NOK 1,317 million (1,136) for the full year
- EBT margin: 6.0 % (6.6 %) in Q4 and 5.8 % (6.1 %) for the full year
- Record high order backlog: NOK 28,200 million (21,541) as at 31 December 2019
- Net interest-bearing liabilities of NOK 163* million (-894) as at 31 December 2019
- Result per share in 2019 was NOK 8.51 (7.88). The Board of Directors has proposed a dividend for payment of NOK 6.00 (5.00) for the first half of 2020
4 th quarter 2019
Safety
1,2 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 2015 2016 2017 2018 2019 Lost-time injury frequency (LTIF)
Number of lost-time injuries and severe personnel injuries not resulting in lost-time per million hours worked
Total recordable injury frequency (TRIF)
Number of lost-time injuries, injuries involving substitute work and medical treatment injuries per million hours worked. (* Excluding Betonmast)
Reported unwanted incident frequency (RUIF)
Revenues and earnings – quarterly
NOK million 373 388 0 50 100 150 200 250 300 350 400 450 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19
Return on capital employed
12 month rolling average
Cash flow statement
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| EBIT |
391 |
363 |
1,335 |
1,119 |
| Depreciations, amortization and impairment |
198 |
49 |
547 |
184 |
| Change in net working capital |
331 |
282 |
12 |
-178 |
| Other adjustments / taxes paid |
-136 |
-112 |
-386 |
-283 |
| Cash flow from operations |
784 |
582 |
1,508 |
841 |
| Net investments |
-128 |
-15 |
-838 |
-255 |
| Cash flow from capital activities |
111 |
-393 |
-536 |
-993 |
| Interest paid and change in interest bearing debt |
-389 |
-14 |
-221 |
-37 |
| Net change in cash and cash equivalents |
380 |
161 |
-88 |
-444 |
| Net cash and cash equivalents at beginning of period |
186 |
493 |
656 |
1,098 |
Change in cash and cash equivalents without cash
effect |
-3 |
2 |
-5 |
1 |
| Net cash and cash equivalents end of period |
563 |
656 |
563 |
656 |
4 th quarter 2019
Net interest-bearing receivables
All the company's covenants exclude the effect of IFRS 16
The implementation of IFRS 16 from January 1st 2019 led to an increase of interest-bearing debt. As at 31 December 2019, the effect was NOK 941 million
Balance sheet
| NOK million |
31.12.2019 |
31.12.2018 |
| Non-current assets |
7,718 |
4,337 |
| Current assets, ex. cash |
4,573 |
3,493 |
| Cash and cash equivalents |
563 |
656 |
| Total assets |
12,854 |
8,486 |
| Equity |
2,999 |
2,124 |
| Long term debt |
1,423 |
704 |
| Short term debt |
8,432 |
5,659 |
| Total equity and debt |
12,854 |
8,486 |
Equity ratio
Equity ratio excluding the effect of IFRS 16 would be 25,3 % at 31 December 2019 All the company's covenants exclude the effect of IFRS 16 *
4 th quarter 2019
Health and environment
*
A total of 360,368 (512,401) tonnes of waste have been sorted for the full year (* Excluding Betonmast)
4 th quarter 2019
Business areas
E39 - Sognetunnelen
Excellent results
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
1,117 |
1,648 |
5,787 |
5,861 |
| EBIT |
137 |
112 |
373 |
275 |
| EBT |
138 |
113 |
376 |
293 |
| EBIT % |
12.3 % |
6.8 % |
6.5 % |
4.7 % |
EBT
% |
12.3 % |
6.9 % |
6.5 % |
5.0 % |
- Several projects in the closing phase entail a significantly lower level of activity for AF Anlegg in the quarter compared to the same quarter last year, but the results are excellent
- The E39 Kristiansand west-Mandal east project is large and challenging, and the project is proceeding according to schedule with a high level of activity
- Målselv Maskin & Transport has seen a high level of activity and strong results in the quarter
- After year end AF proceeds to the specification phase on E6 Roterud-Storhove (NOK 3,750 excl. VAT)
- Order backlog: NOK 5,424 million (7,664)
High level of activity and strong results
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
2,788 |
2,839 |
10,581 |
9,055 |
| EBIT |
202 |
232 |
656 |
619 |
| EBT |
206 |
241 |
667 |
645 |
| EBIT % |
7.3 % |
8.2 % |
6.2 % |
6.8 % |
EBT
% |
7.4 % |
8.5 % |
6.3 % |
7.1 % |
- Most business units have growth in revenues and report good results for the quarter
- AF Bygg Oslo, AF Nybygg, Strøm Gundersen and Haga & Berg have all delivered excellent results. Additionally, LAB and Åsane Byggmesterforretning in Bergen report good results for the quarter
- In AF Bygg Østfold, AF Byggfornyelse and Eiqon there are great variations in the profitability in the project portfolios, and the units performed below expectations in the 4th quarter
- Order backlog: NOK 10,045 million (9,871)
Results in line with our expectations
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
1,226 |
- |
1,226 |
- |
| EBIT |
49 |
- |
49 |
- |
| EBT |
46 |
- |
46 |
- |
| EBIT % |
4.0 % |
- |
4.0 % |
- |
EBT
% |
3.8 % |
- |
3.8 % |
- |
- Betonmast became part of AF Gruppen on 31 October 2019. In the last two months of 2019 Betonmast saw revenues of NOK 1,226 million and reported a pre-tax profit of NOK 46 million
- The result is in line with our expectations. Betonmast Oslo and Betonmast Romerike stand out with strong results, while Betonmast Bergen, Betonmast Boligbygg, Betonmast Telemark and Betonmast Ringerike report poor results
- After year end, organisational changes have been made in several units and the corporate management of Betonmast has been strengthened
- Order backlog: NOK 7,293 million
Good sale and a solid 2019
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
7 |
10 |
18 |
73 |
| EBIT |
20 |
24 |
107 |
166 |
| EBT |
16 |
23 |
100 |
157 |
| Capital employed |
785 |
837 |
785 |
837 |
▪ Good sales in several projects contributed to a pre-tax result of NOK 16 million (23). Results also includes an additional gain related to previous sale of commercial property at Hasle in Oslo
- 60 (47) sold apartments in the 4th quarter, of which AF's share is 22 (17)
- Five residential property projects with a total of 634 apartments under construction (AF's share is 244). 84 % sales ratio for projects in progress as of 31 December 2019. Unsold completed apartments at year end is 32 (1)
- Land and development rights in progress: 1,865 (1,831) residential units. AF's share is 916 (871)
- AF has an ownership stake in commercial property under construction with a gross floor area of 52,183 (53,683). AF's share is 25,764 (26,264)
Increased activity and excellent results
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
299 |
232 |
1,072 |
875 |
| EBIT |
35 |
15 |
78 |
44 |
| EBT |
34 |
17 |
75 |
41 |
| EBIT % |
11.7 % |
6.7 % |
7.3 % |
5.0 % |
EBT
% |
11.5 % |
7.2 % |
7.0 % |
4.7 % |
- AF Energi & Miljøteknikk reports very good results. Several project write-ups and conclusions of service and energy saving contracts (EPC) have contributed to this. Now the unit has also chosen to focus especially on electrical engineering
- AF Decom also reports a very good result for the quarter, both in demolition and recycling. AF Gruppen is looking at the possibility of establishing more recycling centres in the time ahead
- Order backlog: NOK 371 million (501)
Revenue growth and improved margins
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
1,093 |
658 |
3,683 |
2,270 |
| EBIT |
52 |
27 |
149 |
114 |
| EBT |
53 |
26 |
146 |
113 |
| EBIT % |
4.8 % |
4.0 % |
4.0 % |
5.0 % |
EBT
% |
4.8 % |
4.0 % |
4.0 % |
5.0 % |
- Revenue growth of 66 % compared to the same quarter last year, which is primarily related to the acquisition of HMB and revenue growth in Kanonaden
- In the demolition business, AF Härnösand Byggreturer continues to deliver strong results in the quarter. The building units AF Bygg Syd, AF Bygg Göteborg and HMB also deliver good results
- Kanonaden with a higher level of activity and good results. Pålplintar has decided to discontinue the foundation business and continue the concrete business. AF Projektutveckling currently has no projects under production, but several in the development phase
- Order backlog: NOK 2,946 million (1,578)
Low activity level and write down with impact on results
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
178 |
135 |
679 |
655 |
| EBIT |
-78 |
-27 |
-83 |
-21 |
| EBT |
-82 |
-30 |
-94 |
-27 |
| EBIT % |
-43.5 % |
-20.1 % |
-12.2 % |
-3.2 % |
EBT
% |
-46.1 % |
-22.5 % |
-13.9 % |
-4.1 % |
- AF Offshore Decom (AFOD) reported a low level of activity, and the unit delivered weak results for the quarter. The unit has several platform construction projects at Vats, but a lower than expected production level has hit profitability for the quarter. Preparatory work is also ongoing for future offshore campaigns and demolition at Vats, primarily in 2021
- AF AeronMollier has a significantly increased activity level compared to the same quarter last year and delivers positive results. Still, write down of goodwill related to the unit of NOK 50 million in the quarter as a result of poor results over a longer period
- Order backlog: NOK 1,351 million (1,456)
A record high order backlog
Order backlog
Order backlog per business area
ENERGY AND ENVIRONMENT
Demolition, recycling and energy efficiency in construction and industry.
271 NUMBER OF EMPLOYEES
1,072 TURNOVER (2019) NOK millions
OPERATING PROFIT 7.3 % 78 NOK millions
Environmental Centre
Tøyenbadet
▪
▪
Life Sciences Building
▪
Fyri tunet - Hemsedal
▪
▪
▪
Bærum Kulturhus
Summary
| NOK million |
Q4 2019 |
Q4 2018 |
2019 |
2018 |
| Revenues |
6,465 |
5,656 |
22,612 |
18,767 |
| EBIT |
391 |
363 |
1,135 |
1,119 |
| EBT |
388 |
373 |
1,317 |
1,136 |
| EBIT % |
6.0 % |
6.4 % |
5.9 % |
6.0 % |
EBT
% |
6.0 % |
6.6 % |
5.8 % |
6.1 % |
- Stable revenue growth (14 %)
- Solid earnings and a good cash flow
- Record high order backlog: NOK 28,200 million (21,541)
- The Board of Directors has proposed a dividend for payment of NOK 6.00 (5.00) for the first half of 2020
Thank you for your attention!
Q1 2020: May 15th 2020