NCC Group

Earnings Release • Apr 26, 2023

Good orders received in all business areas

"Good orders received is a sign of activity in the market. A favorable result from property sales boosted the quarter, which was otherwise characterized by seasonally low activity."

Tomas Carlsson, President and CEO of NCC

• Good orders received in all business areas and strong order backlog
• One property sale and one sale of land were recognized in profit with favorable earnings
• Operating profit in Industry and the contracting business seasonally low
• Operating profit in Infrastructure continued to improve, construction operations impacted by lower margins
• Healthy cash flow during the quarter
• The Annual General Meeting resolved in favor of a dividend of SEK 6.00 (6.00) per share for 2022, divided between two payment occasions

First quarter of 2023

• Orders received amounted to SEK 16,288 M (16,635)
• Net sales totaled SEK 12,464 M (10,111)
• Operating profit amounted to SEK 152 M (-170)
• Profit after financial items totaled SEK 185 M (-175)
• Profit after tax was SEK 153 M (-147)
• Earnings per share after dilution amounted to SEK 1.56 (-1.37)

	Q1		R12 Apr-Mar	Jan-Dec
Group, SEK M	2023	2022	2022/2023	2022
Orders received	16,288	16,635	52,938	53,285
Order backlog	58,910	62,510	58,910	54,995
Net sales	12,464	10,111	56,551	54,198
Operating profit/loss	152	-170	1,679	1,358
Operating margin, %	1.2	-1.7	3.0	2.5
Profit/loss after financial items	185	-175	1,659	1,299
Net profit/loss for the period	153	-147	1,368	1,069
Profit/loss per share after dilution, SEK	1.56	-1.37	13.47	10.29
Cash flow from operating activities	190	-378	834	265
Cash flow before financing	19	-360	243	-136
Net cash +/Net debt -	-3,251	-3,529	-3,251	-3,000

For definitions of key figures, see ncc.com/investor-relations/ncc-share/financial-definitions/

CEO Tomas Carlsson comments

NCC began the year with good orders received in all business areas. We reported a good operating profit, supported by previously completed property sales. In other operations, activity was seasonally lower as usual.

The Infrastructure business area continues to perform well, with an increasing operating profit. Its order backlog is fundamentally strong, and orders received were healthy during the quarter. More than a third of the order value for this quarter derived from the water and energy area, where we hold a strong position and where the market is characterized by major investment needs and demand for specialist expertise.

The orders received for the quarter in Building Sweden illustrate the shift between segments, with public buildings being clearly dominant. It is evident that the residential market is being impacted by the economic situation and that this will continue for some time. Operating profit in Building Sweden is impacted by the effects of cost increases for material and energy in ongoing projects.

Orders received were also high in Building Nordics, supported mainly by two large projects in Denmark. As in Sweden, the lower operating profit was due to lower margins in ongoing projects. We are continuously adapting to demand and are implementing changes in Finland to become more effective and to strengthen profitability.

The asphalt operations in the Industry business area essentially stand still as always in the first quarter, but intensive work is under way on contracts and preparations for the rest of the year. Our assessment is that this work has gone well, and we feel well prepared, although it is too early in the year to be able to draw any conclusions. The stone materials operations are less affected by seasonal variations and are displaying good results.

Property Development recognized one office project in Denmark in profit, with a favorable result. In addition, earnings were positively impacted by the sale of land for

a residential housing project. As is well known, activity in the property market is very low, which is highly significant for the business area's opportunity to sell and start up projects. Today, it is difficult to foresee how long this situation will persist.

NCC has a target for the current year of SEK 16 in earnings per share. This target stands firm, but I want to be clear that our ability to achieve it is dependent on activity in the property market gathering pace and that earnings in the Industry business area improve strongly compared with the preceding year. We are working to influence what we can.

Naturally, NCC is impacted by the economic situation, but we can also leverage our focus on our core operations, which makes us competitive, and our strong position in several segments, which gives us stability. We have a strong financial position.

We will carefully monitor developments and remain close to our customers to be able to make adjustments and the right decisions on which projects we should take on. I look forward to the continuation of this year.

Tomas Carlsson, President and CEO Solna, April 26, 2023

Group performance

Market

In the main, NCC is impacted by the general economic situation and the GDP trend. Cost increases and rising interest rates have a dampening effect on the market. Over the long term, higher prices lead to lower demand. Rising interest rates also affect interest in investing in new properties. The market for residential units and offices was impacted most tangibly by the economic situation.

At the same time, the long-term market conditions for contracting operations, property development and industrial operations in the Nordic region remain positive. There are plans for large industrial investments in parts of Sweden. There is an underlying demand for public buildings, such as schools, prisons, hospitals and retirement homes.

Urban expansion and the emergence of new growth regions are driving initiatives for infrastructure in city areas, including roads, public transport, water and wastewater, and energy solutions. In general, the market for renovation and refurbishment is also healthy. There is an underlying demand for residential units, although the economic situation is impacting this.

The countries in which NCC has infrastructure operations have ambitious plans and investment initiatives in renewal, refurbishment and maintenance of national and regional infrastructure. Demand for asphalt and stone materials is driven by investments in infrastructure and maintenance.

Net sales and earnings

Net sales in the first quarter amounted to SEK 12,464 M (10,111), up slightly more than 20 percent. All the business areas reported a positive trend. Changes in exchange rates had an impact of SEK 249 M (173) on net sales.

Operating profit amounted to SEK 152 M (-170) in the first quarter. In Property Development, one major project and one sale of land were recognized in profit compared to only one minor project in the first quarter the preceding year. The improved operating profit in Industry was mainly attributable to the stone materials operations. In the Infrastructure business area, the higher net sales for the quarter had a positive effect on operating profit. Despite the increased sales in Building Sweden and Building Nordics, operating profit declined as a consequence of a lower margin in the order backlog due to the impairments implemented in 2022 in a small number of projects for reasons including the cost situation.

The operating margin was higher than in the preceding year. On a rolling twelve-month basis, NCC had an operating margin of 3.0 percent.

Net financial items for the period were SEK 33 M (-5). Higher capitalization of interest for Property Development and lower pension debt had a positive impact. Higher corporate debt and higher interest expenses had a negative impact.

Effective tax

The effective tax rate for the Group amounted to 18 percent (16) for the period. During the quarter, two tax-free sales were made: one project and one sale of land. During the first quarter of 2022, only one tax-free sale of a small project was completed.

Orders received, Jan-Mar SEK M

16,288

Net sales, Jan-Mar SEK M

Net sales, SEK M

12,464

Cash flow

Cash flow before financing for the quarter amounted to SEK 19 M (-360). The improvement in relation to the preceding year was mainly due to a better operating profit. However, cash flow from investing activities was lower than in the comparative quarter.

Cash flow from property projects was in line with the preceding year, despite higher investments. During the quarter, one project was recognized in profit and one sale of land was completed. In the preceding year, only one minor project, Bettorp, was recognized in profit and handed over to the customer.

Cash flow from investments was lower than in the preceding year since due to the Industry business area receiving – in the comparison period – the purchase consideration from the sale of land completed in December 2021.

Total cash and cash equivalents at the end of the period amounted to SEK 1,077 M (1,740).

The Group's net debt at March 31 amounted to SEK -3,251 M (-3,529). Total net debt was essentially unchanged, since the pension debt decreased, in principle, to the same extent as corporate net debt increased.

The corporate net debt, meaning net debt excluding pension debt and lease liabilities, went from a net cash position to a net debt position and totaled SEK -1,670 M (265) at the end of the quarter. The reason for the increase in corporate net debt was mainly the repurchase program for own Series B shares that the Board of Directors resolved on, and which was implemented in 2022. In total, shares were repurchased for approximately SEK 1 billion. An additional reason is increased investments in ongoing and completed property projects.

The Group's total assets at March 31 amounted to SEK 29,352 M (28,095). It was primarily completed projects in Property Development that increased, at the same time as interest-bearing liabilities in the form of loans increased.

The average maturity of interest-bearing liabilities, excluding the pension debt and lease liability, was 23 months (18) at the end of the quarter. At March 31, 2023, NCC's unutilized committed lines of credit totaled SEK 5.1 billion (3.1), with an average remaining maturity of 26 months (31).

Capital employed

At March 31, capital employed amounted to SEK 11,824 M (11,205). The increase was mainly due to higher investments in property projects during the period. The return on capital employed was 15 percent (16).

The return on equity was 21 percent (29).

Financial targets and dividend policy

NCC has two financial targets: earnings per share and net debt in relation to EBITDA. The target is for earnings per share to be a minimum of SEK 16 by 2023. The company's net debt is to be less than 2.5 times EBITDA. Earnings per share on a rolling 12-month basis amounted to SEK 13.47. Corporate net debt amounted to 0.72 times EBITDA.

NCC's dividend policy states that approximately 60 percent of the profit for the year is to be distributed to shareholders. On March 31, the Annual General Meeting of NCC adopted the proposal by the Board of Directors for a dividend of SEK 6 per share for fiscal year 2022, divided between two payment occasions. This corresponds to 55 percent of after-tax profit for 2022. The record date for the first payment of SEK 3 per share was April 4, 2023, while the record date for the second payment of SEK 3 per share is November 6, 2023.

Earnings per share SEK 10.29 13.47 Target ≥ 16 2022 Q1 2023, R12

Net debt/EBITDA

This refers to the corporate net debt, that is, net debt excluding pension debt and lease liability EBITDA refers to operating profit according to the income statement, with reversal of depreciation and impairment losses according to Note 2, excluding depreciation/amortization of right-of-use assets.

Health and safety targets

Health and safety is a high priority area in NCC and a prioritized area in the Group's sustainability framework. All levels of the Group are focused on reducing the total number of accidents as well as completely avoiding accidents and incidents that lead to or could lead to serious injury or fatalities.

NCC has set a Group-wide target for the accident frequency rate for accidents that lead to more than four days of absence per million worked hours (LTIF4) for the Group's own employees. The goal is to achieve 2.0 in 2026 with annual interim targets. On a rolling 12-month basis, the outcome for the first quarter was 3.5, which is lower than for full-year 2022.

NCC conducts continuous analyses of all serious incidents and accidents and works on measures at Group level and in all business areas. This includes, for example, continuous training and work to create a good safety culture, effective planning, and physical and digital barriers.

Climate and energy targets

NCC has a target for emission intensity that is to reduce emissions from its own operations (Scope 1 and 2, measured as emission intensity) by 60 percent by 2030. At year-end 2022, the emission intensity was 2.5 CO2e (tons)/SEK M, corresponding to a reduction of 52 percent since 2015 (base year). The figures for the base year were recalculated due to the sale of Asphalt Finland in December 2021, in accordance with the Greenhouse Gas Protocol Corporate Standard.

NCC also works to reduce climate emissions in the value chain and has therefore set an interim target of reducing emissions in the value chain (Scope 3) by 50 percent by 2030. NCC focuses on four prioritized areas: concrete, steel, asphalt and transportation. The figures below pertain to parts of these areas for which data is currently available for full-year 2022. For more details on accounting policies, refer to the 2022 Annual and Sustainability Report.

Scope 3	Base year (2015)	2021	2022	Reduction since 2015
Ready-mix concrete (kg CO2e/m³)	350	326	293	16%
Steel reinforcement (kg CO2e/ton)	1,000	590	620	38%
Asphalt (kg CO2e/ton)	35	22	24	31%

Transportation Work to develop a metric is in progress

Accident frequency*

*Accident frequency rate: Worksite accidents resulting in more than four days of absence per one million worked hours.

The figures for the base year were recalculated due to the divestment of Asphalt Finland, in accordance with the Greenhouse Gas Protocol Corporate Standard. Earlier, the following values were reported:

2015	2016	2017	2018	2019	2020	2021
5.9	5.0	4.8	4.0	3.7	3.4	3.5

Order status

Orders received and order backlog

Orders received in the first quarter amounted to SEK 16,288 M (16,635). Orders received for the quarter were only lower than in the preceding year in the Building Sweden business area, where several large projects were registered among orders in the year-earlier period. Orders received in the other business areas were higher than in the comparative period, primarily in Industry.

Changes in exchange rates impacted orders received by SEK 310 M (259).

The Group's order backlog totaled SEK 58,910 M (62,510) at the end of the quarter. The order backlog declined in Infrastructure, Building Sweden and Building Nordics, but was offset by the positive development in Industry.

Changes in exchange rates impacted the order backlog by SEK -138 M (367).

Orders received, SEK M

Examples of orders and contracts during the first quarter of 2023. A list of orders valued at more than SEK 150 M and announced via press releases during the quarter is available at ncc.com/ir.

• Building Nordics is to construct a new Scandic hotel in Aarhus. The order value is approximately SEK 2 billion
• Building Nordics signed an agreement for a further phase of the New North Zealand Hospital project. The order value is SEK 1.7 billion
• Building Sweden is to build two new schools: The new Håsten school in Varberg (SEK 530 M) and the Granelund school in Tranås (SEK 250 M)
• Building Sweden is also to construct 213 new residential units in Järva krog with an order value of SEK 400 M
• Industry signed a number of asphalt contracts during the first quarter. For example, NCC is to lay new asphalt on the bridge over the Great Belt strait and will lay asphalt on a stretch of the E18 highway in Norway
• Infrastructure is to build a municipal water and sewage system along Njurunda coastline in Sundsvall with an order value of SEK 250 M
• Infrastructure is also to expand the Forslunda waterworks in Umeå (SEK 180 M) and remodel the hydropower plant in Hammarforsen, Jämtland (SEK 160 M)

NCC Infrastructure

Orders received and order backlog

Orders received amounted to SEK 4,617 M (4,404) in the first quarter. The increase is attributable to several major projects being registered among orders in Sweden. Energy and water treatment accounted for more than one third of the total orders received.

The order backlog was lower than in the year-earlier period and amounted to SEK 17,845 M (20,170).

Net sales and earnings

Net sales in the first quarter amounted to SEK 3,935 M (3,501). Groundworks accounted for a quarter of the total net sales, followed by Energy and water treatment.

Operating profit amounted to SEK 67 M (42) in the first quarter. The higher net sales for the quarter had a positive effect on operating profit for the business area.

The business area's operating profit is negatively impacted by some large infrastructure projects with low margins that have been in progress for some time and will continue a number of years.

	Q1		R12 Apr-Mar	Jan-Dec
	2023	2022	2022/2023	2022
Orders received	4,617	4,404	15,604	15,391
Order backlog	17,845	20,170	17,845	17,291
Net sales	3,935	3,501	17,690	17,256
Operating profit/loss	67	42	455	429
Operating margin, %	1.7	1.2	2.6	2.5

Orders received Jan–Mar

Share of sales Jan–Mar

NCC Building Sweden

Orders received and order backlog

Orders received amounted to SEK 3,398 M (4,792) in the first quarter. The lower level of orders received compared with the preceding year was primarily attributable to several major projects being registered in the first quarter of 2022. Public buildings accounted for the largest share of orders received and increased most. Residential units declined most due to the prevailing market situation and rebalancing of the portfolio. 90 percent of orders received for residential units comprised rental apartments.

The order backlog was lower than in the year-earlier period but remained at a high level compared with net sales. It amounted SEK 18,480 M (19,679) at the end of the quarter.

Net sales and earnings

Net sales in the first quarter amounted to SEK 3,490 M (3,099). Residential units accounted for nearly one-third of total net sales, followed by public buildings.

Operating profit amounted to SEK 60 M (92) in the first quarter. Impairment of a small number of residential housing projects in 2022 have resulted in a decline in project margins in the order backlog.

	Q1		R12 Apr-Mar	Jan-Dec
	2023	2022	2022/2023	2022
Orders received	3,398	4,792	13,317	14,711
Order backlog	18,480	19,679	18,480	18,587
Net sales	3,490	3,099	14,570	14,178
Operating profit/loss	60	92	219	252
Operating margin, %	1.7	3.0	1.5	1.8

Orders received Jan–Mar

Share of sales Jan–Mar

NCC Building Nordics

Orders received and order backlog

Orders received in the first quarter amounted to SEK 5,098 M (4,852). The increase during the quarter was attributable to Denmark, which registered two large projects among orders, and to Norway. The SEK 440 M order for the refurbishment av residential units for BO-VEST in Copenhagen that was communicated for the first quarter was already registered during the fourth quarter of 2022. In Finland, orders received declined. The two large projects in Denmark lead to that Public buildings and Other accounted for the largest share of orders received. Other includes a large order for the construction of a Scandic hotel in Aarhus. The share of residential units was zero during the quarter, a sharp decrease compared with the preceding year.

The order backlog totaled SEK 18,545 M (19,464) at the end of the quarter.

Net sales and earnings

Net sales in the first quarter amounted to SEK 3,503 M (2,855). All countries contributed to the increase. Public buildings and residential accounted for more than half of net sales.

Operating profit declined and amounted to SEK 18 M (56) during the quarter. The lower operating profit was mainly due to lower margins in the order backlog for projects that required impairment in the preceding year due to the cost situation, primarily in Finland and Norway, and to some smaller items related to specific projects. Denmark reported a strong operating profit. In Finland changes are made to adjust the operations to the market conditions and improve profitability.

	Q1		R12 Apr-Mar	Jan-Dec
	2023	2022	2022/2023	2022
Orders received	5,098	4,852	12,567	12,321
Order backlog	18,545	19,464	18,545	17,127
Net sales	3,503	2,855	14,216	13,568
Operating profit/loss	18	56	309	347
Operating margin, %	0.5	2.0	2.2	2.6

Orders received Jan–Mar

Share of sales Jan–Mar

NCC Industry

Orders received

Orders received in the first quarter amounted to SEK 3,307 M (2,755). Orders received were higher year-on-year in both the asphalt and stone materials operations, driven by price increases to customers.

Net sales and earnings

The business area is always characterized by a seasonally low level of activity during the first quarter. Net sales were higher than in the preceding year and amounted to SEK 1,058 M (977) in the first quarter. The higher sales derived mainly from stone materials and asphalt operations in Denmark and from price increases.

The operating result amounted to SEK -261 M (-305) in the first quarter. The result, which is usually negative due to low activity in the first quarter, was less negative year-on-year, supported by improved earnings in stone materials operations.

Operating capital employed

.

The operating capital employed was slightly lower than in the first quarter of the preceding year.

	Q1		R12 Apr-Mar	Jan-Dec
	2023	2022	2022/2023	2022
Orders received	3,307	2,755	12,190	11,638
Net sales	1,058	977	11,349	11,268
Operating profit/loss	-261	-305	52	8
Operating margin, %	-24.7	-31.2	0.5	0.1
Operating capital employed ¹	4,411	4,565	4,411	4,411
Stone materials thousand tonnes, sold volume	5,829	6,347	27,924	28,443
Asphalt thousand tonnes, sold volume	188	199	4,793	4,803
Return on operating capital employed, % ¹	-	-	1.2	0.3

1) See definition at NCC:s website, ncc.com/investor-relations/ncc-share/financial-definitions/

Orders received Jan–Mar

Net sales Jan–Mar Asphalt and paving 34 (33)% Stone materials 66 (67)%

Share of sales Jan–Mar

NCC Property Development

Net sales and earnings

Net sales increased and amounted to SEK 1,146 M (329) in the first quarter. Operating profit also increased and amounted to SEK 256 M (29).

In the first quarter, one office project, Kontorværket 1 in Denmark, was recognized in profit. During the quarter, the previously announced sale of land with development rights in Sweden (Järva krog) also made a positive contribution to earnings. In the preceding year, earnings were derived from profit recognition of a small project, Bettorp, in Sweden, as well as supplementary purchase considerations from earlier sales.

Property projects

One project, Park Central, was started in Sweden during the quarter. The project is being developed in cooperation with Jernhusen through a joint venture. NCC has acquired 50 percent of the company owning the property from Jernhusen, which will repurchase this shareholding when the property is fully developed. The project is expected to be recognized in profit during the second quarter of 2027.

Letting in the first quarter amounted to 8,600 square meters (17,600). A total of 11 new leases (12) were signed in Sweden and Finland.

At the end of the first quarter, 11 projects (10) were either ongoing or completed but not yet recognized in profit. The costs incurred in all projects amounted to SEK 7.4 billion (6.3), corresponding to a total completion rate of 64 percent (61). The completion rate in ongoing projects was 55 (61) percent. The total letting rate during the quarter was 56 percent (64). Operating net for the quarter amounted to SEK 30 M (9).

Operating capital employed

Operating capital employed increased at the end of the quarter, totaling SEK 8,046 M (6,586). The increase was attributable to investments in ongoing projects.

	Q1		R12 Apr-Mar	Jan-Dec
	2023	2022	2022/2023	2022
Net sales	1,146	329	2,118	1,301
Operating profit/loss	256	29	708	482
Operating margin, %	22.3	8.9	33.4	37.0
Operating capital employed ¹	8,046	6,586	8,046	7,996
Return on operating capital employed, % ¹	-	-	9.4	6.7

1) See definition at NCC:s website, ncc.com/investor-relations/ncc-share/financial-definitions/

Net sales Jan–Mar

1) Total letting also includes previously sold and profitrecognized property projects where NCC works with letting.

* Arendal Albatross has been sold, and the letting rate is 100 percent since the letting risk has passed to the buyer at the time of sale.

Property projects

Share of sales Jan–Mar

NCC Property Development

Property development projects as of 2023-03-31

Ongoing Property development projects1

Project	Type	Location	Sold, estimated recognition in profit	Completion ratio, %	Lettable area (sqm)	Letting ratio, %
Kulma21	Office	Helsinki		85	7,700	100
We Land	Office	Helsinki		50	21,300	35
Total Finland				60	29,000	53
Brick Studios	Office	Gothenburg		86	16,100	95
Våghuset	Office	Gothenburg		85	10,900	99
MIMO ²	Office	Gothenburg	Q4 2024	59	31,700	35
Nova	Office	Solna		73	9,900	26
Arendal Albatross ³	Logistics	Gothenburg	Q1 2024	67	34,000	100
Habitat 7	Office	Gothenburg		31	8,100	0
Flow Hyllie	Office	Malmö		29	10,200	40
Park Central ⁴	Office	Gothenburg	Q2 2027	3	15,200	0
Total Sweden				52	136,100	47
Total				55	165,100	48

Completed Property development projects

Project	Type	Location	Sold, estimated recognition in profit	Lettable area (sqm)	Letting ratio, %
Bromma Blocks	Office	Stockholm		52,000	79
Total Sweden				52,000	79
Total				52,000	79

1) The tables refers to ongoing or completed property projects that have not yet been recognized as revenue. In addition to

these projects, NCC also focuses on rental (rental guarantees / additional purchase) in six previously sold and revenue recognized property projects, a maximum of approximately SEK 25 M.

2) NCC announced in Q2 2017 that Platzer had an option to acquire the property in Mölndal when the project is completed. During Q3 2021, Platzer chose to realize the option and the parties have signed a sales agreement. The sale is conditioned by a letting ration of 80% or more.

3) The project has been sold and the letting ratio is 100 percent as the letting-risk has passed to the buyer.

4) The project covers approximately a total of 40,000 square meters and lettable area of approximately 30,400 square meters. The project is carried out together with Jernhusen, a Swedish state-owned property company, and was included in December 2021 agreement to jointly develop Park Central in joint venture through a jointly owned company. NCC has acquired 50 percent of the property-owning company by Jernhusen that will repurchase the part when the property is completed, and some criteria is fulfilled. The data in the table refers to NCCs share of the project.

Geographical areas

Sweden

Denmark

Norway

Finland

Other

Significant risks and uncertainties

A description of the risks to which NCC may be exposed is provided in the 2022 Annual Report (pages 24–29). This assessment still applies.

In February 2022, Russia began an invasion of Ukraine, which has had a number of consequences for the global economy. NCC has no operations in Ukraine, Russia or Belarus, nor does it have any major direct suppliers in these countries.

The conflict has also strengthened an already ongoing trend of cost increases for key input materials, not least energy, which could have an impact on NCC and NCC's customers. High inflation, a declining economy and falling GDP also represent risks for NCC in the longer term. Higher interest rate could also have an impact on factors such as the conditions for selling properties. This also has an impact on the construction market in general in accordance with the description in the risk section of the Annual Report.

Related-party transactions

Related parties are NCC's subsidiaries, associated companies and joint arrangements. Related-company sales during the first quarter amounted to SEK 6 M (9) and purchases to SEK 1 M (2).

Seasonal effects

Operations in the Industry business area and certain operations in Building Sweden, Building Nordics and Infrastructure are impacted by seasonal variations due to weather conditions. Earnings in the first quarter are normally weaker than the rest of the year.

Amounts and dates

Unless otherwise indicated, amounts are stated in SEK millions (SEK M). All comparative figures in this report pertain to the year-earlier period. Rounding-off differences may arise in all tables.

Annual General Meeting

NCC's Annual General Meeting was held on March 31, 2023, at Space, Sergelgatan 2 in Stockholm, Sweden.

Dividend

The Annual General Meeting (AGM) resolved in favor of the Board's proposal that a dividend of SEK 6.00 per share be paid for the 2022 fiscal year, divided between two payment occasions. The record date for the first payment of SEK 3.00 per share was April 4, 2023, with disbursement on April 11, 2023. The record date for the second payment of SEK 3.00 per share has been set as November 6, 2023, with disbursement on November 9, 2023.

Board of Directors and director fees

The AGM resolved that the Board of Directors is to comprise seven AGM-elected members. Board members Simon de Château, Alf Göransson, Mats

Jönsson, Angela Langemar Olsson and Birgit Nørgaard were re-elected. Daniel Kjørberg Siraj and Cecilia Fasth were elected as new Board members. Geir Magne Aarstad declined re-election. Alf Göransson was elected Chairman of the Board.

It was resolved that director fees be paid in a total amount of SEK 4,500,000, excluding fees for work on committees, distributed so that the Chairman of the Board receives SEK 1,500,000 and each other member receives SEK 500,000. The fees per director are unchanged from earlier years.

Fees will be paid to the members of the Audit Committee as follows: the Chair of the Committee will receive SEK 175,000 and each other member will receive SEK 125,000. Fees will be paid to the members of the Project Committee as follows: the Chair of the Committee will receive SEK 125,000 and the other member will receive SEK 100,000. The resolved fees are unchanged from earlier years. Members of the Audit Committee include Angela Langemar Olsson (Chair), Mats Jönsson and Birgit Nørgaard. Members of the Project Committee include Alf Göransson (Chair) and Daniel Kjørberg Siraj.

Auditor

The registered auditing firm PricewaterhouseCoopers AB (PwC), with Ann-Christine Hägglund as Auditor-in-Charge, was re-elected auditor of the company. PwC was elected until the close of the 2024 AGM.

Nomination Committee

The following members were elected to the Nomination Committee: Peter Hofvenstam (Chair), CEO of Nordstjernan, Simon Blecher, fund manager at Carnegie Funds, and Trond Stabekk, CFO of OBOS. The Chairman of the Board, Alf Göransson, is a co-opted member of the Nomination Committee but has no voting right.

Cancellation of shares

The Annual General Meeting decided on a reduction of the share capital by SEK 69,398,928 through the cancellation of 8,674,866 own Series B shares and an increase in the share capital of SEK 69,398,928 through a bonus issue without the issue of new shares, to restore the share capital.

Repurchased shares and cancellation of shares

As of March 31, NCC AB holds a total of 10,843,582 repurchased Series B shares, of which 765,842 are to cover commitments according to the long-term incentive program.

The Annual General Meeting decided on the cancellation of 8,674,866 shares outstanding. This process is ongoing. Once it is completed, this will be announced in a press release.

Financial calendar

Interim report Q2 and Jan–Jun: July 18, 2023 Interim report Q3 and Jan–Sep: October 31, 2023 Interim report Q4 and Jan-Dec: January 30, 2024 Interim report Q1 2024: April 26, 2024

Signatures

Solna, April 26, 2023

Tomas Carlsson President and CEO

This report is unaudited.

Condensed consolidated income statement

	Note	Q1		R12 Apr-Mar	Jan-Dec
SEK M	1	2023	2022	2022/2023	2022
Net sales	4	12,464	10,111	56,551	54,198
Production costs	2	-11,569	-9,534	-52,236	-50,202
Gross profit		895	577	4,315	3,996
Selling and administrative expenses	2	-748	-752	-2,977	-2,981
Other operating income/expenses		4	5	342	343
Operating profit/loss	4	152	-170	1,679	1,358
Financial income		29	15	43	29
Financial expense ¹		4	-21	-63	-87
Net financial items	4	33	-5	-20	-59
Profit/loss after financial items	4	185	-175	1,659	1,299
Tax		-32	28	-291	-230
Net profit/ loss		153	-147	1,368	1,069
Attributable to:
NCC´s shareholders		153	-147	1,368	1,069
Net profit/loss for the period		153	-147	1,368	1,069
Earnings per share
Net profit/loss for the period, before and after dilution, SEK		1.56	-1.37	13.47	10.29
Number of shares, millions
Total number of issued shares		108.4	108.4	108.4	108.4
Average number of shares outstanding before and after dilution during the period		97.6	107.6	101.6	103.9
Number of shares outstanding at the end of the period		97.6	107.6	97.6	97.6

1) Whereof interest expenses including capitalized interest expenses for the quarter SEK 12 M (-10).

Consolidated statement of comprehensive income

	Note		Q1	R12 Apr-Mar	Jan-Dec
SEK M	1	2023	2022	2022/2023	2022
Net profit/loss for the period		153	-147	1,368	1,069
Items that have been recycled or should be recycled to net profit/loss for the period
Exchange differences on translating foreign operations		-15	43	172	229
Cash flow hedges		-56	2	-0	58
Income tax relating to items that have been or should be recycled to net profit/loss for the period		11	-0	-0	-12
		-59	45	171	275
Items that cannot be recycled to net profit/loss for the period
Revaluation of defined benefit pension plans		-162	-53	1,930	2,039
Income tax relating to items that can not be recycled to net profit/loss for the period		33	11	-398	-420
		-129	-42	1,533	1,619
Other comprehensive income		-188	3	1,704	1,894
Total comprehensive income		-35	-144	3,072	2,963
Attributable to:
NCC´s shareholders		-35	-144	3,072	2,963
Total comprehensive income		-35	-144	3,072	2,963

Condensed consolidated balance sheet

	Note
SEK M	1	31 Mar 2023	31 Mar 2022	31 Dec 2022
ASSETS
Goodwill		1,924	1,876	1,943
Other intangible assets		340	335	326
Right-of-use assets	3	1,465	1,631	1,420
Owner-occupied properties		895	875	909
Machinery and equipment		2,481	2,309	2,504
Long-term interest-bearing receivables	5	184	129	184
Pension receivable		-	-	68
Other financial fixed assets		760	735	684
Total fixed assets		8,049	7,890	8,037
Properties held for future development		1,144	942	1,179
Ongoing property projects		4,634	5,685	7,171
Completed property projects		2,737	-	-
Participations in associated companies		139	437	74
Materials and inventories		1,214	1,247	1,079
Accounts receivable		7,061	6,734	8,205
Worked-up, not-invoiced revenues		1,656	1,784	1,410
Current interest-bearing receivables		167	103	117
Other current receivables	3	1,472	1,535	1,364
Short-term investments		486	461	394
Cash and cash equivalents		591	1,279	534
Total current assets		21,302	20,205	21,528
Total assets		29,352	28,095	29,565
EQUITY
Shareholders´ equity		7,145	5,705	7,183
Total shareholders´ equity		7,145	5,705	7,183
LIABILITIES
Long-term interest-bearing liabilities	5	3,312	2,057	3,286
Provisions for pensions and similar obligations		35	2,073	-
Other long-term liabilities		1,029	466	1,003
Other provisions		2,534	2,593	2,481
Total long-term liabilities		6,909	7,190	6,770
Current interest-bearing liabilities	5	1,333	1,369	1,012
Accounts payable		4,754	4,040	5,165
Invoiced revenues not worked-up		5,316	5,676	4,754
Other current liabilities		3,895	4,114	4,681
Total current liabilities		15,298	15,200	15,612
Total liabilities		22,207	22,389	22,382
Total shareholders´ equity and liabilities		29,352	28,095	29,565

Condensed consolidated changes in shareholders' equity

		31 Mar 2023		31 Mar 2022
	Share	Total	Share	Total
	holders	shareholders´	holders	shareholders´
SEK M	equity	equity	equity	equity
Opening balance	7,183	7,183	5,844	5,844
Total comprehensive income	-35	-35	-144	-144
Performance based incentive program	-2	-2	5	5
Closing balance	7,145	7,145	5,705	5,705

Condensed consolidated cash flow statement

		Q1		Jan-Dec
SEK M	2023	2022	2022/2023	2022
OPERATING ACTIVITIES
Operating profit/loss	152	-170	1,679	1,358
Adjustments for items not included in cash flow	252	287	846	881
Interest paid and received	-25	-7	-43	-24
Taxes paid	-39	-113	-143	-218
Cash flow from operating activities before changes in working capital	340	-3	2,339	1,997
Divestment of property projects	640	234	1,812	1,406
Gross investments in property projects	-893	-545	-3,273	-2,924
Cash flow from property projects	-254	-311	-1,461	-1,518
Other changes in working capital	104	-65	-44	-213
Cash flow from changes in working capital	-149	-376	-1,505	-1,731
Cash flow from operating activities	190	-378	834	265
INVESTING ACTIVITIES
Acquisition/sale of subsidiaries and other holdings	-16	13	183	211
Acquisition/sale of tangible fixed assets	-123	14	-716	-579
Acquisition/sale of other fixed assets	-32	-8	-58	-33
Cash flow from investing activities	-171	19	-591	-401
Cash flow before financing	19	-360	243	-136
FINANCING ACTIVITIES
Cash flow from financing activities	38	-924	-934	-1,896
Cash flow during the period	57	-1,284	-690	-2,031
Cash and cash equivalents at beginning of period	534	2,561	1,279	2,561
Effects of exchange rate changes on cash and cash equivalents	1	1	3	4
Cash and cash equivalents at end of period	591	1,279	591	534
Short-term investments due later than three months	486	461	486	394
Total liquid assets at end of period	1,077	1,740	1,077	928

Condensed consolidated net debt

		Q1		Jan-Dec
Net debt, SEK M	2023	2022	2022/2023	2022
Net cash +/Net debt - opening balance	-3,000	-2,932	-3,529	-2,932
- Cash flow from operating activities	190	-378	834	265
- Cash flow from investing activities	-171	19	-591	-401
Cash flow before financing	19	-360	243	-136
Change in provisions/receivables for pensions	-104	-75	2,038	2,066
Change in leasing debt	-167	-162	-381	-376
Paid dividend	-	-	-618	-618
Acquisition/sale of treasury shares	-	-	-1,009	-1,009
Currency exchange differences in cash and cash equivalents	1	1	3	4
Net cash + /Net debt - closing balance	-3,251	-3,529	-3,251	-3,000
- Whereof provisions/receivables for pensions	-35	-2,073	-35	68
- Whereof leasing debt	-1,545	-1,721	-1,545	-1,507
- Whereof other net cash/net debt	-1,670	265	-1,670	-1,561

Parent Company condensed income statement

	Q1		R12 Apr-Mar	Jan-Dec
SEK M Note 1	2023	2022	2022/2023	2022
Net sales	9	10	152	153
Selling and administrative expenses	-65	-56	-240	-231
Operating profit	-55	-46	-88	-78
Result from participations in Group companies	-	-	1,081	1,081
Result from other financial fixed assets	14	13	14	13
Result from financial current assets	2	-	3	1
Interest expense and similar items	-7	-3	-14	-10
Result after financial items	-46	-36	996	1,006
Appropriations	-	-	233	233
Tax on net profit/loss for the period	12	7	-29	-34
Net profit/loss for the period	-34	-29	1,199	1,205

Net sales pertain to charges to Group companies. The average number of employees was 61 (55).

Parent Company condensed balance sheet

SEK M Note 1	31 Mar 2023	31 Mar 2022	31 Dec 2022
ASSETS
Financial fixed assets	4,572	4,564	4,562
Total fixed assets	4,572	4,564	4,562
Current receivables	62	174	603
Treasury balances in NCC Treasury AB	587	882	213
Total current assets	649	1,056	816
Total assets	5,221	5,621	5,378
SHAREHOLDERS´ EQUITY AND LIABILITIES
Shareholders´ equity	4,496	4,928	4,532
Provisions	6	6	6
Long-term liabilities	2	5	3
Current liabilities	717	681	836
Total shareholders´ equity and liabilities	5,221	5,621	5,378

Total approved dividends amounted to SEK 586 M, of which SEK 293 M was paid in April and SEK 293 M will be paid in November.

Notes

Note 1.Accounting policies

This interim report has been compiled pursuant to IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The interim report has been prepared in accordance with the International Financial Reporting Standards (IFRS), as approved by the European Union (EU).

A small number of changes to existing standards and interpretations came into effect for the fiscal year commencing after January 1, 2023. IFRS 17 Insurance contracts was adopted by the EU in November 2021 and came into force on January 1, 2023. In its evaluation of the new standard, NCC made the assessment that it will not result in any changes for the Group. Other changes that came into force on January 1, 2023, had no material impact on this financial report either.

Parent Company

The Parent Company has prepared its interim report pursuant to the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities.

The interim report for the Parent Company has been prepared in accordance with the same accounting policies and methods of calculation as the 2022 Annual Report (Note 1 and in connection with the subsequent notes) except that the Parent Company applies the exemption in RFR 2 and recognizes all lease commitments as operating leases.

Note 2.Depreciation/amortization

	Q1		R12 Apr-Mar	Jan-Dec
SEK M	2023	2022	2022/2023	2022
Other intangible assets	-12	-12	-50	-50
Owner-occupied properties ¹	-63	-72	-298	-307
Machinery and equipment ²	-207	-218	-863	-874
Total depreciation	-283	-302	-1,212	-1,231

1) Whereof depreciation of right-of-use assets for the quarter SEK 53 M (61) and for the period April 2022 - March 2023 SEK 239 M

2) Whereof depreciation of right-of-use assets for the quarter SEK 76 M (81) and for the period April 2022- March 2023 SEK 317 M.

Note 3.Right-of-use assets

SEK M	31 Mar 2023	31 Mar 2022	31 Dec 2022
Owner-occupied properties	915	970	864
Machinery and equipment	550	662	555
Land leases¹	1	2	2
Total right-of-use assets	1,466	1,634	1,422

1) Land leases are classified as current assets.

Note 4.Segment reporting

		NCC	NCC
	NCC	Building	Building	NCC	NCC Property	Total	Other and
Q1 2023	Infrastructure	Sweden	Nordics	Industry	Development	segments	eliminations ¹	Group
Net sales, external	3,847	3,141	3,262	1,005	1,146	12,402	63	12,464
Net sales, internal	87	349	242	53	-	731	-731	-
Net sales, total	3,935	3,490	3,503	1,058	1,146	13,133	-669	12,464
Operating profit	67	60	18	-261	256	140	12	152
Net financial items	-	-	-	-	-	-	-	33
Profit/loss after financial items	-	-	-	-	-	-	-	185

		NCC	NCC
	NCC	Building	Building	NCC	NCC Property	Total	Other and
Q1 2022	Infrastructure	Sweden	Nordics	Industry	Development	segments	eliminations ¹	Group
Net sales, external	3,375	2,787	2,605	927	329	10,024	87	10,111
Net sales, internal	126	312	250	50	-	737	-737	-
Net sales, total	3,501	3,099	2,855	977	329	10,761	-650	10,111
Operating profit	42	92	56	-305	29	-86	-84	-170
Net financial items	-	-	-	-	-	-	-	-5
Profit/loss after financial items	-	-	-	-	-	-	-	-175

1) The figures for the quarter include among others NCC's head office and results from small subsidiaries and associated companies, totalling SEK -70 M (-60). Further, the figures includes eliminations of internal profits of SEK 23 M (-13) and other Group adjustments of SEK 60 M (-11). These items primarly correspond to pensions and leases.

Note 5.Fair value of financial instruments

In the tables below, disclosures are made concerning how fair value has been determined for the financial instruments that are continuously measured at fair value in NCC's balance sheet. When determining fair value, assets have been divided into three levels. No transfers were made between the levels during the period.

In level 1, measurement complies with the prices quoted on an active market for the same instruments. Derivatives in level 2 comprise currency forward contracts, currency options,

interest-rate swaps, oil forward contracts and electricity forward contracts used for hedging purposes.

The measurement at fair value of currency forward contracts, currency options, oil forward contracts and electricity forward contracts is based on accepted models with observable input data such as interest rates, exchange rates and commodity prices. The measurement of interest-rate swaps is based on forward interest rates based on observable yield curves. In level 3, measurement is based on input data that is not observable in the market.

SEK M		Mar 31 2023				Mar 31 2022				Dec 31 2022
		Level				Level				Level
	1	2	3	Tot	1	2	3	Tot	1	2	3	Tot
Financial assets measured at fair value through profit and loss
Short-term investments	432			432	375			375	374			374
Derivative instruments		34		34		28		28		34		34
Derivative instruments used in hedge accounting		63		63		87		87		117		117
Financial assets measured at fair value through other comprehensive income
Equity instruments			68	68			68	68			68	68
Total assets	432	97	68	597	375	115	68	558	374	151	68	593
Financial liabilities measured at fair value through profit and loss
Derivative instruments		1		1		30		30		3		3
Derivative instruments used in hedge accounting		8		8		31		31		6		6
Total liabilities	0	9	0	9	0	61	0	61	0	9	0	9

In the table below, disclosures are made concerning fair value for the financial instruments that are not recognized at fair value in NCC's balance sheet.

SEK M	Mar 31 2023		Mar 31 2022		Dec 31 2022
	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount	Fair value
Long-term interest-bearing receivables - amortized cost	184	177	129	125	184	175
Short-term investments - amortized cost	55	54	85	85	20	20
Long-term interest-bearing liabilities	3,312	3,270	2,057	2,051	3,286	3,240
Current interest-bearing liabilities	1,333	1,333	1,369	1,368	1,012	1,012

For other financial instruments recognized at amortized cost (accounts receivable, current interest-bearing receivables, other receivables, cash and cash equivalents, accounts payable and other interest-free liabilities) the fair value does not materially deviate from the carrying amount.

Note 6.Pledged assets, contingent liabilities and guarantee obligations

SEK M
Group	31 Mar 2023	31 Mar 2022	31 Dec 2022
Assets pledged	404	434	424
Contingent liabilities and guarantee obligations ¹	227	252	249
Parent company
Contingent liabilities and guarantee obligations ¹	30,557	22,663	30,167

1) Among these, NCC AB has sureties which are indemnified by Bonava AB based on the Master Separation Agreement. Bonava is working on formally replacing these sureties with other forms of collateral in a gradual process, which means that this item will decline further over time. In addition, NCC AB has received guarantees from credit insurance companies for the remaining outstanding commitments on behalf of now wholly owned Bonava companies.

Summary of key figures

	Q1		R12 Apr-Mar	Jan-Dec
	2023	2022	2022/2023	2022	2021	2020	2019
Profitability ratios
Return on shareholders equity, % ¹	21	29	21	17	32	37	32
Return on capital employed, % ¹	15	16	15	12	16	12	13
Financial ratios at period-end
EBITDA % including effects of dividends	3.5	1.3	5.1	4.8	5.9	5.2	4.7
Interest-coverage ratio, times ¹	27	23	27	16	23	13	9
Equity/asset ratio, %	24	20	24	24	20	14	10
Interest bearing liabilities/total assets, %	16	20	16	15	21	26	25
Net cash +/ Net debt -, SEK M	-3,251	-3,529	-3,251	-3,000	-2,932	-4,823	-4,489
Debt/equity ratio, times	0.5	0.6	0.5	0.4	0.5	1.2	1.5
Capital employed at period end, SEK M	11,824	11,205	11,824	11,480	12,055	11,375	10,382
Capital employed, average, SEK M	11,720	11,396	11,720	11,766	11,430	10,983	9,936
Capital turnover rate, times¹	4.8	4.7	4.8	4.6	4.7	4.9	5.9
Closing interest rate, % ³	4.4	1.0	4.4	4.1	1.1	1.1	1.1
Average period of fixed interest, years ³	1.0	0.6	1.0	1.0	0.5	1.0	1.2
Per share data
Profit/loss after tax, before and after dilution, SEK	1.56	-1.37	13.47	10.29	14.02	11.68	8.09
Cash flow from operating activities, before and after dilution, SEK	1.95	-3.52	8.21	2.55	21.00	14.56	20.50
Cash flow before financing, before and after dilution, SEK	0.20	-3.34	2.40	-1.30	17.62	10.26	14.01
P/E ratio ¹	7	10	7	9	12	13	19
Dividend, ordinary, SEK	-	-	6.00	6.00	6.00	5.00	2.50
Dividend yield, %	-	-	6.5	6.2	3.6	3.3	1.6
Shareholders´ equity before and after dilution, SEK	73.21	53.03	73.21	73.60	54.32	36.89	28.21
Share price/shareholders´ equity, %	126	253	126	132	309	407	543
Share price at period-end, NCC B, SEK	91.90	134.00	91.90	97.25	167.70	150.00	153.20
Number of shares, millions
Total number of issued shares ² ⁴	108.4	108.4	108.4	108.4	108.4	108.4	108.4
Treasury shares at period-end	10.8	0.8	10.8	10.8	0.8	0.8	0.5
Total number of shares outstanding at period-end before and after dilution	97.6	107.6	97.6	97.6	107.6	107.7	107.9
Average number of shares outstanding before and after dilution during the period	97.6	107.6	101.6	103.9	107.6	107.8	108.0
Market capitalization before and after dilution, SEK M	9,009	14,450	9,009	9,636	18,035	16,144	16,548
Personnel
Average number of employees	12,166	12,250	12,166	12,485	13,002	14,388	15,273

1) Calculations are based on the rolling 12 month period.

2) All shares issued by NCC are common shares.

3) Refers to interest-bearing liabilities excluding pension liabilities according to IAS 19 and leases according to IFRS 16.

4) Withdrawal of shares is ongoing

For definitions of key figures, see https://ncc.com/investor-relations/ncc-share/financial-definitions/

Invitation to presentation of the Interim Report for the first quarter of 2023

NCC's President and CEO Tomas Carlsson and Chief Financial Officer Susanne Lithander will present the interim report in a webcast and teleconference on April 26, 2023, at 9:00 a.m. CEST. The presentation will be held in English.

Presentation material will be available at ncc.com/ir from approximately 8:00 a.m. (CEST).

Link to webcast: Webcast Q1

To participate by phone, please call one of the following numbers five minutes prior to the start of the conference.

SE: +46 8 505 100 31 UK: +44 207 107 06 13 US: +1 631 570 56 13

For further information, please contact:

Susanne Lithander

Chief Financial Officer (CFO) tel. +46 730 37 08 74

Maria Grimberg

Head of Communication & Investor Relations tel. +46 708 96 12 88

Financial calendar

Interim report Q2 and Jan-Jun 2023 July 18, 2023 Interim report Q3 and Jan-Sep 2023 October 31, 2023 Interim report Q4 and Jan-Dec 2023 January 30, 2024 Interim report Q1 2024 April 26, 2024

This is the type of information that NCC AB is obligated to disclose pursuant to the EU Market Abuse Regulation. The information was issued for publication through the agency of the contact persons set out above on April 26, 2023, at 7:10 a.m. CEST.

Telephone +46 8 585 510 00 Website ncc.com E-mail ir@ncc.se

Visitor address Herrjärva torg 4, SE-170 80 Solna Postal address NCC AB, SE-170 80 Solna, Sweden