AF Gruppen

Investor Presentation • Nov 8, 2019

Highlights

Continues to grow and delivers strong results

• Revenue: NOK 5,069 million (4,536) in Q3 and NOK 16,146 million (13,111) year-to-date
• EBT: NOK 339 million (313) in Q3 and NOK 929 million (764) year-to-date
• EBT margin: 6.7 % (6.9 %) in Q3 and 5.8 % (5.8 %) year-to-date
• Solid order backlog: NOK 23,000 million (18,920) at the end of Q3
• Net interest-bearing liabilities of NOK 598* million (-680) at the end of Q3
• After the end of the quarter, on 31 October 2019, the purchase of 100 % of the shares in Betonmast AS was completed
• Following a repair issue, the board intends to approve a dividend of NOK 3.50 (3.50) per share, to be paid to shareholders in December

Safety

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

Reported unwanted incident frequency (RUIF)

Revenues and earnings – quarterly

Revenues

Earnings before tax

Profit margin

Return on capital employed

12 month rolling average

Cash flow statement

N O K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
E B I T	3 4 3	3 1 5	9 4 3	7 5 6
D i t i t i t i d i i t e p r e c a o n s, a m o r z a o n a n m p a r m e n	1 2 2	4 9	3 4 9	1 3 4
C h i k i i l t t a n g e n n e w o r n g c a p a	2 0 3 -	1 8 8 -	3 1 9 -	4 6 0 -
O / t h d j t t t i d e r a u s m e n s a x e s p a	8 0 -	6 7 -	2 0 5 -	1 1 7 -
C h f l f t i a s o w r o m o p e r a o n s	1 8 2	1 0 0	7 2 4	2 6 0
N i t t t e n e s m e n s v	2 2 0 -	1 5 -	1 0 7 -	2 4 0 -
C h f l f i t l t i i t i a s o w r o m c a p a a c v e s	9 4	6 -	6 4 9 -	6 0 0 -
I i d d h i i b i d b t t t t t n e r e s p a a n c a n g e n n e r e s e a r n g e	2 3 5 -	4 7	1 6 8	2 4 -
N t h i h d h i l t e c a n g e n c a s a n c a s e q u v a e n s	1 7 9 -	1 2 5	4 6 8 -	6 0 4 -
N h d h i l b i i f i d t t t e c a s a n c a s e q a e n s a e g n n n g o p e r o u v	3 0 7	3 6 8	6 6 5	1, 0 9 8
C h i h d h i l i h h t t t a n g e n c a s a n c a s e q a e n s o c a s u v w u f f t e e c	5 -	1 -	2 -	1 -
N h d h i l d f i d t t e c a s a n c a s e q u v a e n s e n o p e r o	1 8 6	4 9 3	1 8 6	4 9 3

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 per 30. September 2019, the effect was NOK 881 million

Equity ratio

Equity ratio excluding the effect of IFRS 16 would be 24,0 % YTD 19 All the company's covenants exclude the effect of IFRS 16 *

Health and environment

Sick leave Source separation rate

A total of 278,190 (200,128) tonnes of waste have been sorted YTD 19

Civil Engineering

High activity level and solid results

O N K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
R e e n e s v u	1, 3 0 7	1, 4 8 5	4, 6 7 0	4, 2 1 2
E B I T	7 5	5 7	2 3 6	1 6 4
E B T	7 5	6 0	2 3 8	1 8 0
% E B I T	% 5. 8	% 3. 8	% 5. 1	% 3. 9
% E B T	% 5. 7	0 % 4.	1 % 5.	3 % 4.

• AF Anlegg has maintained a high level of activity in the quarter and the unit is delivering solid results
• The E18 Tvedestrand–Arendal project was opened to traffic on 2 July, but follow-up work will continue to the end of the year. The E39 Kristiansand vest–Mandal øst project is a large and challenging project, but it is progressing according to plan
• There are several projects contributing to the good overall performance in AF Anlegg
• Målselv Maskin & Transport has seen a high level of activity and delivers solid results in the quarter
• Order backlog: NOK 6,018 million (4,619)

Building

Growth and solid results continue

N O K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
R e v e n u e s	2, 4 9 5	2, 1 0 5	7, 7 9 3	6, 2 1 6
E B I T	1 6 2	1 5 8	4 5 4	3 8 8
E B T	1 6 1	1 6 2	4 6 2	4 0 4
E B I T %	6. 3 %	7. 3 %	5. 8 %	6. 2 %
% E B T	% 6. 3	% 7. 6	% 5. 9	% 6. 5

Revenue growth of 19 % and solid profit margins

• Most business units have seen growth in revenues and are delivering good results for the quarter, including the construction companies AF Bygg Oslo, AF Nybygg and Strøm Gundersen. LAB, HTB and ÅBF in Bergen, as well as the units engaged in renovation jobs in Oslo are also delivering strong results
• In AF Byggfornyelse and AF Bygg Østfold there are wide variations in profitability in the project portfolios, and the units performed below expectations in the 3rd quarter
• Order backlog: NOK 11,529 million (10,273)

Property

Good results

N O K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
R e v e n u e s	4	1 1	1 1	6 4
E B I T	2 7	8 2	8 8	1 4 3
E B T	2 6	9 7	8 4	1 3 4
C i l l d t a p a e m p o e y	9 6 9	8 2 7	9 6 9	8 2 7

• Good sale in projects contributed to a good pre-tax result of MNOK 26 million (79). Earnings in the 3rd quarter of 2018 were marked by the sale of a commercial property at Hasle in Oslo
• 61 (65) sold apartments in the 3rd quarter, of which AF's share is 22 (25)
• Six residential property projects with a total of 645 apartments under construction (AF's share is 248). 81 % sales ratio for projects in progress as of 30. September 2019
• Land and development rights in progress: 1,962 (1,878) residential units. AF's share is 949 (782)
• 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)

Energy and Environment

Increased activity and good profitability

O N K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
R e e n e s v u	2 6 7	2 1 0	7 7 3	6 4 4
E B I T	1 9	1 1	4 3	2 8
E B T	1 9	1 0	4 1	2 4
% E B I T	% 7. 0	% 5. 1	% 5. 6	% 4. 4
% E B T	1 % 7.	6 % 4.	3 % 5.	3. 8 %

• Revenue growth of 27 % and good margins compared with the same quarter last year
• AF Energi & Miljøteknikk delivered solid results. Among other things, several energy saving contracts (EPCs) contributed to the revenue growth and good profitability in the quarter
• AF Decom is also delivering solid results in all departments. Activity levels in the bulk recycling centres are on a par with the same quarter last year, and profitability is good. Increased activity in the new facility at Nes makes up for a lower activity level at the Rimol centre
• Order backlog: NOK 510 million (456)

Sweden

Revenue growth, but variable profitability

N O K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
R e e n e s v u	8 2 7	4 7 5	2, 5 9 0	1, 6 1 2
E B I T	3 6	2 0	9 7	8 7
E B T	3 5	2 0	9 4	8 6
% E B I T	% 4. 4	% 4. 2	% 3. 7	% 5. 4
% E B T	% 4. 3	% 4. 1	% 3. 6	% 5. 3

• Revenue growth of 74 % compared to the same quarter last year, which is caused by the acquisition of HMB and revenue growth in all entities
• Good profitability in AF Bygg Syd, AF Bygg Göteborg and HMB. In the demolition business, AF Härnösand Byggreturer continues to deliver strong results in the quarter
• Kanonaden had a higher level of activity compared to the same quarter last year, but somewhat weaker results. Activity levels for Pålplintar are still too low and results are poor
• AF Projektutveckling currently has no projects under production, but several in the development phase
• Order backlog: NOK 3,125 million (1,510)

Offshore

A low activity level contributing to weak results

O N K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	2 0 1 9 Y T D	2 0 1 8 Y T D
R e v e n u e s	1 8 6	1 5 4	5 0 1	5 2 0
E B I T	2 -	3 -	6 -	6
E B T	1 -	5 -	1 2 -	3
E B I T %	1. 2 % -	2. 0 % -	1. 1 % -	1. 1 %
E B T %	0. % 7 -	3. 0 % -	2. 4 % -	0. 6 %

• AF Offshore Decom (AFOD) reported a low level of activity, and the unit delivered weak results for the quarter.
• AFOD has several platform construction projects at Vats, but a lower than expected production level has hit profitability for the quarter
• AF AeronMollier has a significantly increased activity level compared to the same quarter last year and delivers positive results
• Order backlog: NOK 1,312 million (1,510)

Order backlog

A strong order backlog

Order backlog

Order backlog per business area

Quarterly presentation Q3

Property Business Area

Property development within AF looks relatively modest

In reality, AF is a major player within property

PROJECT

REVENUE (2018)

2,756

RESIDENTIAL PLOTS

1,962

SQM OF COMMERCIAL PROPERTY IN DEVELOPMENT

645

NUMBER OF HOMES IN

PRODUCTION

52,183

Figures show 100% of projects; AF's share averages around 40%

Each project is profiled with its own brand name in the marketplace

In this field, several projects are under construction and in development at Hasle together with Høegh Eiendom, along with Construction City

400 homes sold on average in the last four years – The target is an average of 500 going forward

AF Eiendom is a partner to many different players

Property is a standalone business area within AF

The AF model AF GRUPPEN Separate profitability Not desirable due to requirements, and coinciding financial requirements. interest of the project.	EXTERNAL	Expedient to carry out the process with other than AF Building units.	Not applicable.
> OWNERSHIP

IG1 Endre tekst i Ekstern-Eiendom ruten til: "Resultat om pris fra AF Bygg vurderes som ikke markedsmessig" Ida Aall Gram; 06.11.2019

Our competitiveness depends on our ability to adapt

AF Eiendom has adopted a concrete climate and environmental strategy

Halve greenhouse gas emissions from production

Provide for an environmentally friendly living environment

Price growth has helped practically all property developers to earn good money

Property development costs (illustration)

The competitive situation is now quite different

Property development costs (illustration)

Future

Conditions in place for us to strengthen our position considerably

Skills and energy

Customer focus

AF behind us

Summary

N O K i l l i m o n	Q 3 2 0 1 9	Q 3 2 0 1 8	Y T D 2 0 1 9	Y T D 2 0 1 8
R e e n e s v u	5, 0 6 9	4, 5 3 6	1 6, 1 4 6	1 3, 1 1 1
E B I T	3 4 3	3 1 5	9 4 3	7 5 6
E B T	3 3 9	3 1 3	9 2 9	7 6 4
% E B I T	% 6. 8	% 7. 0	% 5. 8	% 5. 8
% E B T	% 6. 7	% 6. 9	% 5. 8	% 5. 8

• Strong revenue growth continues (12 %)
• Solid results
• High order backlog: NOK 23,000 million (18,920)
• After the end of the quarter, the purchase of 100 % of the shares in Betonmast AS was completed

Thank you for your attention!

Illustration, Construction City

Q4 2019: February 14th 2020