AF Gruppen — Earnings Release 2013

Feb 14, 2014

Q4 2013 Summary

Record result

•Revenues

Q4: MNOK 2,508 (2,709) 2013: MNOK 10,127 (9,830)

•Earnings before tax

Q4: MNOK 213 (116) 2013: MNOK 580 (317)

•Cash flow from operations

Q4: MNOK 545 (226) 2013: MNOK 1,031 (194)

•Earnings per share

2013: NOK 5.26 (2.40)

•Dividend proposal

2013: NOK 6.00 (4.50)

• Order backlog MNOK 10,976 (9,074)

• 12 month share price perf.(total return) AFG: +28.4 % (OSEBX: +23.6 %)

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

Revenues

NOK million

Earnings before tax

NOK million

Return on capital employed

12 month rolling average

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

Cash flow statement

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

* Cash flow before change in net interest bearing receivables

Net interest bearing receivables

Development last 3 years

Net interest bearing receivables as of 31 December is NOK 751 million (204).

Balance sheet

8

i i N O K l l m o n	3 1. 1 2. 2 0 1 3	3 1. 1 2. 2 0 1 2
N t t o n- c r r e n a s s e s u	2 1 3 1 ,	1, 9 3 7
C C h t t u r r e n a s s e s, e x. a s	2 4 1 0 ,	2 6 6 0 ,
C h d h i l t a s a n c a s e q a e n s u v	6 9 5	3 2 2
T l t t o a a s s e s	5, 2 3 7	4, 9 1 9
E i t q u y	1, 3 3 4	1, 2 0 2
L d b t t o n g e r m e	4 8 3	5 8 9
S h d b t t t o r e r m e	3 4 1 9 ,	3 1 2 8 ,
T l i d d b t t t o a e q u y a n e	5, 2 3 7	4, 9 1 9

⁹

Health, safety and the environment

Lost time to injuries and sick leave

*Lost time to injuries (LTI): Number of injuries resulting in absence per million man-hours. AF includes all subcontractors in the calculation basis for the LTI rate. For 2009 the LTI rate only includes the Norwegian part of the AF Group.

Civil Engineering

High activity and very good performance

• • Very good operations and high activity level in AF Anlegg in Q4 and in 2013 as a whole.
• • Low activity level and weak results in the Swedish unit, Pålplintar.
• • Start-up on projects Nyhamna and Solbakk tunnel during the quarter.
• • High activity level on several large projects, like E6 Frya-Vinstra, Ringveg Vest og Pir Nord at Oslo airport.
• • Total order backlog as of December 31st: NOK 4,604 million (2,232)

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

Environment

Strong quarter

• • High activity level and good performance in Norway.
• • High activity level at the Follum factories project.
• •Activity in Sweden still lower than expected.
• • The integration of Härnösand Byggreturer has started and the company shows positive development.
• • Total order backlog as of December 31st: NOK 215 million (231)

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

Building

Positive margin development

• •Good results in AF Bygg Oslo.
• • AF Byggfornyelse has implemented initiatives to improve operations.
• • High activity level, good operations and good results in AF Bygg Østfold.
• • Strøm Gundersen delivers good results and increasing activity.
• • Positive development in AF Bygg Rogaland and AF Bygg Göteborg.
• • AF Bygg Sør has low activity and weak results. Organisational adjustments are expected to improve operations.
• • Four substantial agreements signed in Q4. Total contract value approx. NOK 823 million.
• • Total order backlog as of December 31st: NOK 4,760 million (4,368)

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

Property

Selective residential market

• • 29 apartments were sold in Q4. AF's share is 10.
• • I 2013 99 housing units were sold. AF's share is 45.
• • AF has 3 (13) completed unsold housing units.
• • The building of the apartment project Kilen Panorama was started in Q4.
• • The apartment project Krydderhagen at Hasle in Oslo has experienced good sales and it is expected to be started during Q1 2014.
• • AF owns land and development rights in progress which amounts to 1,082 (945) residential units.

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

Energy

• • Steady activity level and satisfactory results for Q4 and 2013 in AF Energi & Miljøteknikk (EMT).
• • Three EPC-contracts signed during 4th quarter.
• • After Q4, EMT signed an agreement with Hammerfest Energi Varme AS to build an energy central. Contract value approx. NOK 16 million.
• • Total EPC contracts are expected to yield an activity of approx. NOK 145 million in addition to existing order backlog.
• • Total order backlog as of December 31st: NOK 59 million (106)

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

Offshore

Good quarterly result

• • AF Decom Offshore delivers very good results in Q4.
• • Good operations at M&M Onshore Facilities, both in Q4 and throughout 2013.
• • Aeron has delivered weak results in Q4 and 2013. Organisational adjustments have been carried out.
• • Mollier and subsidiaries AF Offshore Mandal og 5D Group experienced varying activity levels in Q4.
• • Mollier has been awarded a new framework agreement with ConocoPhillips after quarter-end. Contract period is 4.5 years with an option for ConocoPhillips to extend by 3+3 years.
• • Total order backlog as of December 31st: NOK 1,265 million (2,028)

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

Order backlog development Q4 2009 – 2013

AF offers a range of services to the property industry

Property development

Demolition

Foundation / infrastructure

New building Rehabilitation Energy services

As a property developer, AF Gruppen has two purposes

• • Cooperation based on fair competition and commercial terms for both parties.
• • Own account projects shall constitute 10-30 % of AF Bygg's revenues

• Seeks solely projects that meets AF's profitability requirements.

Increase value creation

AF's property business shall:

• • Be a leading partner-based property developer, which in cooperation with AF's building operations, creates additional profits on own invested capital and for its partners.
• • Develop a building site inventory that supports the building operation's growth ambitions.
• • Secure more frequent start-ups of profitable property projects in cooperation with AF's building operations.

We seek to strengthen the building site inventory, while reducing portfolio ownership from 45 % to 30 %

Our property business is established in regions where AF has building activities:

• Greater Oslo area
• Drammen
• Østfold
• Kristiansand
• Rogaland
• Gothenburg

Why partnerships?:

Gives broader access to projects optimizes capital investments

Market outlook summary

Environment

• Stable good demand for land-based demolition services.

• Strong correlation with the activity level in building, construction and infrastructure.

• Improved market for non-residential and public building. Building renovation market sable and good.

• Expectant residential market, but signals of increasing housing starts.
• The residential market shows moderate positive signs at the beginning of 2014, after a period of slowing project sales.
• Moderate increase in price level expected in 2014.
• Increasing demand for energy services.
• Increased level of EPC-contracts (Energy Performance Contracts).
• Good market for offshore related services.
• The Maintenace & Modification market is expected to flatten at high level.
• Positive outlook for marine HVAC services.