Highlights
AF Gruppen with 26 % revenue growth and good margins in the third quarter
- Revenue: NOK 6,366 million (5,069) in Q3 and NOK 19,540 million (16,146) year-to-date
- Earnings before tax: NOK 368 million (339) in Q3 and NOK 833 million (929) year-to-date
- Profit margin: 5.8 % (6.7 %) in Q3 and 4.3 % (5.8 %) year-to-date
- Cash flow from operations: NOK 574 million (182) in Q3 and NOK 1,274 million (724) year-to-date
- Strong order backlog: NOK 31,269 million (23,000) as of 30 September 2020
- Net interest-bearing receivables of NOK 341 million (-598) as of 30 September 2020
- The Board of Directors has approved a dividend of NOK 3,50 (3.50) for the second half of 2020
Safety
0,0
1,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8 Lost-time injury frequency (LTIF)
2016 2017 2018 2019 Q3 '20 YTD'20
1,6
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
NOK million 339 368 0 50 100 150 200 250 300 350 400 450 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20
3 rd quarter 2020
Return on capital employed
Rolling average last four quarters
Cash flow statement
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| EBIT |
371 |
343 |
847 |
943 |
| Depreciations, amortization and impairment |
135 |
122 |
404 |
349 |
| Change in net working capital |
139 |
-203 |
238 |
-319 |
| Other adjustments / taxes paid |
-71 |
-80 |
-215 |
-249 |
| Cash flow from operations |
574 |
182 |
1,274 |
724 |
| Net investments |
-60 |
-220 |
-122 |
-710 |
| Cash flow from capital activities |
-19 |
94 |
-531 |
-649 |
| Interest paid and change in interest bearing debt |
-166 |
-235 |
-310 |
168 |
| Net change in cash and cash equivalents |
328 |
-179 |
311 |
-468 |
| Net cash and cash equivalents at beginning of period |
561 |
370 |
563 |
656 |
| Change in cash and cash equivalents without cash effect |
4 |
-5 |
20 |
-2 |
| Net cash and cash equivalents end of period |
893 |
186 |
893 |
186 |
Net interest-bearing receivables
All the company's covenants exclude the effect of IFRS 16 Lease
The implementation of IFRS 16 from January 1st 2019 led to an increase of interest-bearing debt. As of 30 September 2020, the effect was NOK 869 million
Balance sheet
| NOK million |
30.09.2020 |
30.09.2019 |
31.12.2019 |
| Non-current assets |
7,859 |
5,882 |
7,718 |
| Current assets, ex. cash |
4,677 |
4,186 |
4,573 |
| Cash and cash equivalents |
893 |
186 |
563 |
| Total assets |
13,429 |
10,254 |
12,854 |
| Equity |
3,195 |
2,232 |
2,999 |
| Long term debt |
1,372 |
1,432 |
1,423 |
| Short term debt |
8,862 |
6,590 |
8,432 |
| Total equity and debt |
13,429 |
10,254 |
12,854 |
Equity ratio
Equity ratio excluding the effect of IFRS 16 would be 25.6 % at 30 September 2020 All the company's covenants exclude the effect of IFRS 16 *
3 rd quarter 2020
Health and environment
Sick-leave increased due to Covid-19. Covid-19 related absence estimated to 0.4 % YTD 2020 A total of 221,598 (278,190) tonnes of waste have been sorted YTD 2020
A total of 394,323 (265,247) tonnes of contaminated materials have been recycled YTD 2020
Business areas Q3 2020
HMB. Photo: Erik Viklund
Strong margins
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
1,045 |
1,307 |
2,855 |
4,670 |
| EBIT |
68 |
75 |
186 |
236 |
| EBT |
66 |
75 |
186 |
238 |
| EBIT % |
6.5 % |
5.8 % |
6.5 % |
5.1 % |
EBT
% |
6.3 % |
5.7 % |
6.5 % |
5.1 % |
▪ The overall operational performance of the project portfolio is good
- Full production on E39 Kristiansand west-Mandal east in the quarter. In addition, AF Anlegg began production on the large-scale Bertunnlar Lovö in Stockholm
- Although covid-19 impacts all projects, most of the projects were able to maintain good level of activity in the quarter
- Målselv Maskin & Transport has a large wind turbine project in the final phase and otherwise a good level of activity. The unit continues to deliver strong results
- Order backlog: NOK 7,459 million (6,018) as at 30. September 2020 E39 Kristiansand vest–Mandal øst. Photo: Øystein Vaagaasarøygard
Good activity level and solid results
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
2,169 |
2,549 |
7,023 |
7,793 |
| EBIT |
130 |
162 |
336 |
454 |
| EBT |
131 |
161 |
340 |
462 |
| EBIT % |
6.0 % |
6.3 % |
4.8 % |
5.8 % |
EBT
% |
6.0 % |
6.3 % |
4.8 % |
5.9 % |
▪ AF Bygg Oslo, Haga & Berg and Consolvo are some of the units that delivered very good results in the quarter
- Eiqon delivered a break-even result for the quarter, while Strøm Gundersen Vestfold has few active projects and delivered negative results. Measures have been taken in both units to improve the situation
- There is still uncertainty about the consequences of covid-19, resulting in reduced number of new housing projects and increased competition for public construction projects
- Order backlog: NOK 9,762 million (11,529) as at 30. September 2020
Variable results, but somewhat increased profitability
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
1,926 |
- |
5,746 |
- |
| EBIT |
68 |
- |
172 |
- |
| EBT |
65 |
- |
166 |
- |
| EBIT % |
3.5 % |
- |
3.0 % |
- |
EBT
% |
3.4 % |
- |
2.9 % |
- |
▪ As expected, Betonmast still delivered weak results but profitability is increasing somewhat
- Betonmast Romerike excelled with strong results. In addition Betonmast Oslo, Betonmast Buskerud-Vestfold and Betonmast Østfold delivered good results
- Betonmast Boligbygg and Betonmast Telemark delivered results below expectations
- Betonmast's operations in Sweden had a high level of activity and increasing profitability for the quarter
- Betonmast has its own property portfolio with two property projects under production
- Order backlog: NOK 7,651 million as at 30. September 2020 Snølia. Photo: Betonmast
Good sales in the quarter
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
6 |
4 |
18 |
11 |
| EBIT |
27 |
27 |
41 |
88 |
| EBT |
26 |
26 |
38 |
84 |
| Capital employed |
976 |
969 |
976 |
969 |
▪ Several projects with good sales in the quarter, including Lilleby Triangel, Bo på Billingstad, Brøter Terrasse and Kråkehaugen. A total of 193 (61) units were sold in the quarter, of which AF's share was 71 (22)
- Five residential property projects under production with a total of 579 units, of which AF's share was 210. The sales ratio for commenced projects was 79 %. At quarter end a total of 9 (40) unsold completed apartments, of which AF's share was 3 (14)
- Property also has a significant development portfolio estimated at 2,198 (1,962) units. AF's share of this was 1,124 (949) residential units
- During the quarter, a bid was accepted for the sale of the ATEA building, and the transaction was completed after the end of the quarter
Lower activity level, but good margins
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
224 |
267 |
667 |
773 |
| EBIT |
15 |
19 |
32 |
43 |
| EBT |
14 |
19 |
32 |
41 |
| EBIT % |
6.5 % |
7.0 % |
4.7 % |
5.6 % |
EBT
% |
6.3 % |
7.1 % |
4.8 % |
5.3 % |
- AF Decom had a significant lower level of activity compared to the same quarter last year. However, the unit maintains good profitability for both demolition and recycling at AF's environmental centers
- The environmental centers have recovered a total of 394,323 (265,247) tonnes of materials year to date, and the recycling rate realised for contaminated materials was 86 %
- AF Decom has demolished and facilitated the recycling of approximately 9,500 tonnes of metal so far this year
- AF Energi & Miljøteknikk reported results below expectation for the quarter. Its project portfolio has seen variable results
- Order backlog: NOK 481 million (510) as at 30. September 2020
Revenue growth and good margins
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
870 |
827 |
2,969 |
2,590 |
| EBIT |
48 |
36 |
130 |
97 |
| EBT |
46 |
35 |
126 |
94 |
| EBIT % |
5.5 % |
4.4 % |
4.4 % |
3.7 % |
EBT
% |
5.3 % |
4.3 % |
4.2 % |
3.6 % |
- In the Swedish civil engineering market, Kanonaden reported strong revenue growth compared with the same quarter last year, and the unit delivered strong results. The liquidation of the Pålplintar foundation business proceeded as planned, and Pålplintar delivered positive results for the quarter
- AF Bygg Syd maintained good profitability in the quarter, while AF Bygg Göteborg and HMB delivered profitability below expectation. In HMB, individual projects contributed to the weak result
- For the demolition business, the level of activity fell for the quarter, but AF Härnösand Byggreturer maintained good results. AF Projektutveckling has both a residential and a school project under production
- Order backlog: NOK 3,825 million (3,125) as at 30. September 2020 Wind farm Åby-Alebo. Photo: Johan Ljungdahl
Revenue growth and improved profitability
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
208 |
186 |
510 |
501 |
| EBIT |
11 |
-2 |
-39 |
-6 |
| EBT |
10 |
-1 |
-50 |
-12 |
| EBIT % |
5.5 % |
-1.2 % |
-7.7 % |
-1.1 % |
EBT
% |
5.0 % |
-0.7 % |
-9.7 % |
-2.4 % |
- AF Offshore Decom had a higher level of activity and improved profitability compared to same quarter last year
- At AF Miljøbase Vats there has been a high level of activity which contributed to a good profitability. High production is expected at Vats for the rest of the year
- There is also ongoing preparatory work for the coming offshore campaigns and demolition at the environmental centre in 2021 and 2022
- AF AeronMollier reported a fall in revenue in the quarter, but still positive results. Year to date, AF AeronMollier has supplied systems and equipment for the electrification of 33 ferries, which corresponds to around half of the Norwegian market. Electrification of ferries entails a significant reduction in greenhouse gas emissions compared with the use of fossil fuels
- Order backlog: NOK 1,497 million (1,312) as at 30. September 2020 AF Miljøbase Vats. Foto: Francisco Branco
Strong order backlog
Order backlog per business area
Positive development in Health, Safety and Environment
7 459
2020 September
Revenue growth, strong results and a high order backlog
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 2017 NOK million 2016 2018 2019 0% 5% 10% 15% 20% 0 100 200 300 400 500 600 700 2016 2019 NOK million Profit margin 2015 2017 2018 Last 12 months AF has a target that the profit Revenue Earnings before tax Order backlog
margin should be > 5 %
Diversified project portfolio
Vesle Kjela Power Station Customer: Statkraft
E39 Kristiansand west – Mandal east Customer: Nye Veier
Grefsen Base Customer: Sporveien
E6 Soknedal
Bergtunnelar Lovö, E4 Förbifart Stockholm Customer: Trafikverket Customer: Statens vegvesen Landfill at Stormoen (MMT)
Customer: Perpetuum
National Construction Contractor
Latest prognosis shows a significant growth in investments
- The activity within civil engineering is affected by COVID-19 and related restrictions, however most projects manage to maintain a high level of production
- High level of investments expected in the National Transport Plan 2022-2033
- Prognosesenteret expects strong overall growth of investments within civil engineering in the period up to 2022
- Growth in civil engineering investments from 2019 to 2022 is expected to amount to over 40 %
- Approximately half of the investments are expected to be road projects
- During the prognosis period near half of the investments within civil engineering are expected in the counties Viken (21 %), Vestland (17 %) and Trøndelag (10
%)
What characterises the market - what are the key drivers?
What actions do we take?
Customer and supplier collaboration Large own production
Digitalisation in practice
Early involvement
Extended project portfolio
•
Consolvo EIQON
Fjerby RaKon
Continuous development of deliveries and working methods
•
•
•
In the project E39 Kristiansand - Mandal, tough requirements have been set for digitized project implementation, and the project has set a new standard for digital information flow in large transport projects.
Awarded the international AEC Excellence Awards in October for digital innovation in the Nye Veier project E39 Kristiansand west – Mandal east, together with Norconsult and Norconsult Information Systems (NoIS)
The road ahead
•
•
Summary
| NOK million |
Q3 2020 |
Q3 2019 |
YTD 2020 |
YTD 2019 |
| Revenues |
6,366 |
5,069 |
19,540 |
16,146 |
| EBIT |
371 |
343 |
847 |
943 |
| EBT |
368 |
339 |
833 |
929 |
| EBIT % |
5.8 % |
6.8 % |
4.3 % |
5.8 % |
EBT
% |
5.8 % |
6.7 % |
4.3 % |
5.8 % |
- Revenue growth continues
- Good profit margin
- Strong financial position
- Strong order backlog: NOK 31,269 million (23,000)
- The Board of Directors has approved a dividend of NOK 3,50 (3.50) for the second half of 2020
Thank you for your attention
Q4 2020: February 12th 2020