AF Gruppen — Earnings Release 2015

May 13, 2015

AF Gruppen – 1st quarter 2015 May 13th 2015

A good start to 2015

•Revenues

NOK 2,534 million (2,295)

• • Operating profit NOK 134 million (84)
• • Cash flow from operations NOK 493 million (-130)
• • Earnings per share NOK 1.13 (0.80)
• • Net interest bearing debt NOK 375 million (902)
• • Order backlog NOK 11,287 million (10,521)

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

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 1 2 0 1 5	Q 1 2 0 1 4	2 0 1 4
E B I T	1 3 4	8 4	6 3 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 6	2 6	1 1 7
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 8 7	2 0 6 -	3 3 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 5 -	3 3 -	3 2 9 -
C h f l f i t a s o r o m o p e r a o n s w	4 9 3	1 3 0 -	8 6
N i t t t e n e s m e n s v	7 7	3 7	2 0 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 0 -	2 4 7	2 6 0 -
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	6 -	3 -	2 0 -
N h f l t e c a s o w	5 5 4	5 1 1	4 4 3 -
C h i i b i i b l i h h f f t 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 v a e s w o u c a s e e c	8 5 -	-	4 0 2 -
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	4 0 7	1 5 1	8 4 6 -

Net interest bearing receivables

Development last 3 years

Net interest bearing receivables as of 31 March is NOK 375 million (902).

Balance sheet

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

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.

Health, safety and the environment

Source separation and recycling

Source separation rate

Civil Engineering

Good operational performance

• • AF Anlegg has a high activity level and good operational performance.
• • A large supply of new projects in the market and the tender activity is high. Competition is strong.
• • Pålplintar has low activity and weak results in Q1.
• • AF Anlegg signed agreement with Statkraft for building and construction work at Ringedalen power station. Contract value NOK 130 million.
• • AF Anlegg awarded contract with Sporveien Oslo for upgrading and renewal of the Østensjø line. Contract value NOK 378 m.
• • Store Norske has extended agreement with AF at Svalbard. Contract value approximately NOK 250 million.
• • Total order backlog as of March 31st: NOK 3,103 million (4,604)

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

Environment

Increasing activity

• • High activity level and good results from AF Decom AS in the 1st quarter.
• • Härnösand Byggreturer has good operational performance and delivers satisfactory results in Q1.
• • AF Decom AB's operational activities within light demolition and heavy demolition are transferred to Härnösand Byggreturer and AF Decom AS respectively.
• • Seasonally lower activity at Rimol Miljøpark and Jølsen Miljøpark in Q1.
• • Total order backlog as of March 31st: NOK 216 million (224)

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

Building

High activity level and good operational performance

• • AF Bygg Østfold, AF Bygg Oslo, AF Bygg Göteborg and the Strøm Gundersen companies all have good performance and delivers good 1st quarter results.
• • AF Byggfornyelse and AF Bygg Rogaland delivers positive Q1 results, but below expectations.
• • AF signed a final agreement with LAB AS in March to acquire 70 per cent of the shares of the company.
• • Four large contracts signed in the 1st quarter. Total contract value NOK 579 million, excl. VAT.
• • Total order backlog as of March 31st: NOK 5,971 million (4,495)

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

Property

New projects selling well

• • AF has launched three housing projects in Q1, which all have been well received in the market.
• • 82 (23) apartments were sold in Q1. AF's share is 37 (11).
• • AF's share of completed unsold housing units was 20 (21) at quarter-end.
• • Four projects have been launched after quarter-end. Another two projects will be launched in Q2.
• • As of March 31st, AF owns land and development rights in progress which amounts to 860 (1,019) residential units.
• • AF has 71,275 (9,051) m2 gross area of urban business premises under development.

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

Energy

• • AF Energi & Miljøteknikk (EMT) has a good activity level in the 1st quarter.
• • The unit has a large part of its project portfolio in the analysis and engineering phase.
• • EMT was, after quarter-end, awarded a contract with Avinor to deliver the heating and cooling plant for the new T3 terminal at Bergen Airport Flesland. Contract value NOK 81 million.
• • Total EPC contracts are expected to yield an activity of NOK 31 million in addition to existing order backlog.
• • Total order backlog as of March 31st: NOK 107 million (56)

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

Offshore

Decommissioning assignment increases activity level

• • High activity level for AF Offshore Decom with the offshore campaign on the B-11 platform.
• • Satisfactory activity level in AF Offshore Aeron. Good performance in Shanghai unit. The Singapore company is in start-up phase.
• • AF Offshore Mollier's activity level is effected by the market conditions and the unit delivers a weak quarterly result. The same applies to AF Offshore Systems.
• •Low activity level for AF Offshore Mandal.
• • Good operational performance for MMO Onshore Facilities in Q1.
• • AF Offshore Mollier was, after quarter-end, awarded a contract with Statoil for the supply of HVAC equipment to the Johan Sverdrup Field Centre. Contract value NOK 250 million excluding options.
• • Total order backlog as of March 31st: NOK 1,608 million (1,562)

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

Order backlog development Q1 2011 – 2015

Market outlook summary

Environment

Stable good demand for land-based demolition services in Norway and Sweden.

Large supply of new projects in the market. The competition is high.

Investment level within civil engineering is at a high level.

Increasing number of new housing project start-ups both in Norway and Sweden.

• The residential market is positive, but with regional differences.
• A moderate increase in price level expected.
• Stable demand for energy services.
• Increased level of EPC-contracts (Energy Performance Contracts).
• Increasing tender activity for building energy centrals.
• Increase in decommissioning tender activity due to lower oil prices.
• Low activity in the Maintenace & Modification market.

AF Gruppen's civil engineering activities

AF's civil engineering activities Strategy 2012 - 2016

The Norwegian civil engineering activities shall be leading at running projects, have the necessary top competence and mobility

The civil engineering activities will be organised through a large unit which performs large projects throughout Norway and a few smaller units with regional belonging or top competence (top 3 in its market)

Growth initiatives in Civil Engineering beyond organic growth will primarily be organised as separate business units

Organised with mobile resources to run large traditional civil engineering projects nationwide with strong local presence.

Organised with mobile resources to run large traditional civil engineering projects nationwide.

An expansion to cover more geographical areas or disciplines will be organised as separate business units.

AF entered into a Letter of Intent with Målselv Maskin & Transport AS with the purpose to acquire 70 per cent of the company

Målselv Maskin & Transport AS

The largest machine contractor in Troms county

Thecompany in short

• Headquarters at Rossvoll in Målselv municipality
• 60 employees
• Turnover of NOK 225 million in 2014
• Performs traditional machine contractor projects
• •Municipal facilities
• •Road construction
• •Mass haulage
• •Rock work
• •Plot excavation
• •Ground and concrete work
• •Road maintenance
• •Transportation

Opportunites from profitable growth