May 15th 2019

Q1 2019 AF Gruppen ASA

High growth and solid results

Revenue: NOK 5 214 million (3 883 million). This represents a growth of 34 %
Earnings before tax: NOK 226 million (194 million)
Profit margin: 4,3 % (5,0 %)
Net operating cash flow: NOK 257 million (126 million)
Order backlog: NOK 23 679 million (19 451 million)
HMB was acquired January 2nd 2019
Net interest-bearing liabilities of NOK 189* million (-1 017 million)

*The implementation of IFRS 16 from January 1st 2019 led to an increase of interest-bearing debt of NOK 888 million

1 st quarter 2019

Safety

1,9 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8 2,0 2015 2016 2017 2018 YTD 19 Lost-time injury frequency (LTIF)

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

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

Reported unwanted incident frequency (RUIF)

4,3 %

Revenues and earnings – quarterly

1 st quarter 2019

Return on capital employed

12 month rolling average

*AF's target is to achieve a return on capital employed above 20 %

Cash flow statement

NOK million	Q1 2019	Q1 2018	2018
EBIT	232	185	1 119
Depreciations, amortization and impairment	110	44	184
Change in net working capital	-36	-52	-178
Other adjustments / taxes paid	-48	-50	-283
Cash flow from operations	257	126	841
Net investments	-388	-245	-255
Cash flow from capital activities	-100	-90	-993
Interest paid and change in interest bearing debt	-21	-10	-37
Net change in cash and cash equivalents	-252	-219	-444
Net cash and cash equivalents at beginning of period	656	1 098	1 098
Change in cash and cash equivalents without cash effect	2	-1	1
Net cash and cash equivalents end of period	405	879	656

1 st quarter 2019

Net interest-bearing receivables

Net interest-bearing liabilities as of March 31st 2019 were NOK 189 million (- 1 017 million) The implementation of IFRS 16 from January 1st 2019 led to an increase of interest-bearing debt of NOK 888 million. Implementation with no cash effect

Balance sheet

NOK million	31.03.2019	31.03.2018	31.12.18
Non-current assets	5 741	4 095	4 337
Current assets, ex. Cash	4 228	2 881	3 493
Cash and cash equivalents	405	879	656
Total assets	10 374	7 854	8 486
Equity	2 312	2 127	2 124
Long term debt	1 404	628	704
Short term debt	6 658	5 099	5 659
Total equity and debt	10 374	7 854	8 486

Equity 2 312

Equity ratio

1 st quarter 2019

Health and environment

A total of 48 957 (52 363) tonnes of waste has been sorted in Q1 2019

Business areas

High activity level and good operational performance

NOK million	Q1 2019	Q1 2018	2018
Revenues	1 657	1 246	5 861
EBIT	71	57	275
EBT	74	67	293
EBIT %	4,3 %	4,6 %	4,7 %
EBT %	4,4 %	5,4 %	5,0 %

AF Anlegg had a high activity level and delivered good results in Q1. The unit grew close to 30 % compared to the same quarter last year
The E18 Tvedestrand Arendal project is in a hectic final phase until traffic starts on July 2nd 2019, while E39 Kristiansand west – Mandal east project in general has had a good mobilisation and start-up
Målselv Maskin & Transport continued to deliver very good results in the quarter
Order backlog: NOK 6 628 million (5 723 million)

Strong growth and solid resultats

NOK million	Q1 2019	Q1 2018	2018
Revenues	2 508	1 808	9 055
EBIT	128	90	619
EBT	132	96	645
EBIT %	5,1 %	5,0 %	6,8 %
EBT %	5,3 %	5,3 %	7,1 %

▪ Significant revenue growth of close to 40 % and profit margins in line with the same quarter last year

Most business units with a high level of activity and delivered good results for the quarter, particularly in AF Bygg Oslo and contracting activities in Bergen. Additionally, the rehabilitation operations in Oslo delivered strong results
A number of new contracts were signed in Q1. AF Bygg Oslo entered into a contract of NOK 490 million (excl. VAT) with Hasle Linje 2 AS for the construction of a new Nordic Choice Hotel and office building at Hasle in Oslo
Order backlog: NOK 11 300 million (9 936 million)

Property

A solid start in 2019

NOK million	Q1 2019	Q1 2018	2018
Revenues	3	4	73
EBIT	37	17	166
EBT	35	14	157
EBIT %
EBT %

Good sale in projects with high completion ratio contributed to a pre-tax result of NOK 35 million (14 million) in Q1
162 (55) sold apartments in the 1st quarter, of which AF's share is 55 (22)
Six residential property projects with a total of 843 apartments under construction (AF's share is 313). 78 % sales ratio for projects in progress as of 31. March 2019
Land and development rights in progress: 2 034 (2 113) residential units. AF's share is 861 (856)
AF has 53 683 (92 084) m² gross area of urban premises under development. AF's share is 26 264 (45 273)

Good activity level and stable margins

NOK million	Q1 2019	Q1 2018	2018
Revenues	217	186	875
EBIT	9	8	44
EBT	7	6	41
EBIT %	4,0 %	4,1 %	5,0 %
EBT %	3,2 %	3,1 %	4,7 %

A good start to the year with a growth of 16,7% and a stable margin compared with the same quarter last year
AF Energi & Miljøteknikk with increased activity level and higher margins
AF Decom delivered good results. The market for receiving and recycling masses is good and AF is considering the possibility of establishing more facilities
Ambition is to become the industry leader in green solutions through our expertise in energy and the environment
Order backlog: NOK 650 million (563 million)

Strong growth and satisfactory results

NOK million	Q1 2019	Q1 2018	2018
Revenues	838	507	2 270
EBIT	33	22	114
EBT	32	21	113
EBIT %	3,9 %	4,3 %	5,0 %
EBT %	3,8 %	4,2 %	5,0 %

▪ Acquisition of HMB closed January 2nd 2019. High activity and good results in the quarter

Kanonaden Entreprenad had a stable level of activity and reported a satisfactory result for the 1st quarter. Pålplintar with higher activity compared to the same quarter last year, and delivered improved results
AF Härnösand Byggreturer and AF Bygg Syd with high activity level, both units continue to deliver projects with high profitability
AF Bygg Göteborg with higher activity compared to the same quarter last year, but the results were somewhat below expectations
Order backlog: NOK 3 056 million (1 746 million)

Low activity and still weak results

NOK million	Q1 2019	Q1 2018	2018
Revenues	123	182	655
EBIT	-8	3	-21
EBT	-12	4	-27
EBIT %	-6,8 %	1,8 %	-3,2 %
EBT %	-9,7 %	2,2 %	-4,1 %

AF Offshore Decom reported as expected a low activity level in Q1, thus reporting weak results. Engineering phase ongoing at our Offshore projects for upcoming offshore campaigns over the next years
No activity at the environmental centre in Vats. A successful conclusion of an offshore campaign with delivery of structures to Vats in April will ensure activity for the remainder of the season
AF AeronMollier with increased activity level compared to the same quarter last year. The unit reported a weak positive result for the quarter
Order backlog: NOK 1 486 million (922 million)