AF Gruppen ASA Q4 2022
10 February 2023
Highlights
AF Gruppen with growth and good results in 4th quarter 2022
- Revenue: NOK 8,568 (8,112) million in Q4 and NOK 31,205 (27,868) million year-to-date
- Earnings before tax: NOK 502 (635) million in Q4 and NOK 1,400 (1,580) million year-to-date
- Profit margin: 5.9% (7.8%) in Q4 and 4.5% (5.7%) year-to-date
- Cash flow from operations: NOK -38 (301) million in Q4 and NOK 1,460 (1,415) million for the full year
- Order backlog: NOK 39,765 (38,646) million as of 31 December 2022
- Net interest-bearing debt of NOK 329 (-29) million as of 31 December 2022
- Earnings per share in 2022: NOK 8.96 (9.60). The board of directors suggest a dividend of NOK 6.50 (6.50) per share to be paid in the first half of 2023
Health and safety
Number of lost-time injuries and severe personnel injuries not resulting in lost-time, including subcontractor employees, per million hours worked
Number of lost-time injuries, injuries involving substitute work and medical treatment injuries, including subcontractor employees, per million hours worked
Revenues and earnings
4 th quarter 2022
Return on invested capital
* Last four quarters rolling
Interest expences added
* Rolling average last four quarters
The Group's required return on invested capital is 20 %
6
4th quarter 2022
Cash flow statement
| NOK million |
Q4
2022 |
Q4
2021 |
2022 |
2021 |
| EBIT |
502 |
639 |
1,409 |
1,609 |
| Depreciation, amortisation and impairment |
128 |
139 |
528 |
567 |
| Change in net working capital |
-575 |
-316 |
-43 |
-340 |
| Taxes paid |
-82 |
-92 |
-299 |
-283 |
| Other adjustments |
-11 |
-70 |
-135 |
-138 |
| Cash flow from operations |
-38 |
301 |
1,460 |
1,415 |
| Net investments |
-77 |
193 |
67 |
175 |
| Cash flow from capital activities |
-125 |
-395 |
-1,391 |
-1,530 |
| Interest paid and change in interest bearing debt |
-19 |
4 |
-45 |
-35 |
| Net change in cash and cash equivalents |
-258 |
101 |
89 |
24 |
| Net cash and cash equivalents at beginning of period |
1,036 |
593 |
680 |
708 |
| Change in cash and cash equivalents without cash effect |
-12 |
-14 |
-4 |
-52 |
| Net cash and cash equivalents end of period |
765 |
680 |
765 |
680 |
Net interest-bearing debt and liquidity
Components net interest-bearing receivables (debt)
Balance sheet
| NOK million |
31.12.22 |
31.12.21 |
| Non-current assets |
7,630 |
7,490 |
| Current assets, ex. cash |
6,062 |
4,937 |
| Cash and cash equivalents |
765 |
680 |
| Total assets |
14,457 |
13,108 |
| Equity |
3,494 |
3,572 |
| Long term debt |
1,250 |
1,343 |
| Short term debt |
|
|
| Total equity and debt |
14,457 |
13,108 |
All the company's covenants exclude the effect of IFRS 16
Environment
1 Regulatory requirement of 60%
54,540 tonnes = 54,540 (55,796) tonnes CO2 -equivalents saved
315,269 tonnes = 78,788 (82,693) tonnes CO2 -equivalents saved
Business Areas
4 th quarter 2022
Solid order backlog and very strong results
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
1,678 |
1,522 |
5,919 |
6 002 |
| EBIT |
170 |
221 |
445 |
515 |
| EBT |
168 |
220 |
440 |
510 |
| EBIT % |
10.1% |
14.5% |
7,5% |
8,6% |
| EBT % |
10.0% |
14.5% |
7,4% |
8,5% |
- Civil Engineering reports revenue growth compared to 4th quarter last year. In addition, all units report very good results
- Ordre backlog in AF Anlegg is more than twice as large as 4th quarter of 2021. The order backlog has increased from NOK 5,794 million in 4th quarter of 2021 to NOK 14,096 million in the 4th quarter of 2022
- AF Anlegg is going to build a new cable tunnel between Sogn and Ulven in Oslo for Statnett. The contract has a value of approx. NOK 1,800 million excl. VAT
- Order backlog: NOK 15,368 (6,878) million
Construction
Varying results and weaker profitability
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
3,061 |
2,839 |
11,090 |
8 865 |
| EBIT |
122 |
154 |
322 |
447 |
| EBT |
119 |
154 |
318 |
450 |
| EBIT % |
4.0% |
5.4% |
2,9% |
5,0% |
| EBT % |
3.9% |
5.4% |
2,9% |
5,1% |
- High activity and large variation in profitability and performance between the business units
- AF Bygg Oslo, Haga & Berg and Åsane Byggmesterforetning report very good results in the quarter. Strøm Gundersen and HTB report good results
- High energy and construction cost affect the profitability of the business units negatively. Fundamentering, AF Byggfornyelse, AF Bygg Østfold and AF Håndverk report weak results in the quarter
- Order backlog: NOK 10,045 (13,549) million
Overall good profitability
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
1,376 |
1,506 |
5,145 |
5,196 |
| EBIT |
78 |
54 |
166 |
132 |
| EBT |
83 |
48 |
174 |
111 |
| EBIT % |
5.6% |
3.6% |
3,2% |
2.5% |
| EBT % |
6.0% |
3.2% |
3,4% |
2.1% |
- Betonmast reports overall good results in the quarter
- Betonmast Oslo, Romerike, Buskerud-Vestfold, Trøndelag, Asker og Bærum and Østfold report very good results in the quarter. Betonmast Røsand reports good results
- Betonmast Innlandet and Boligbygg report weak results in the quarter
- In the 4th quarter Betonmast entered into an agreement with Moss municipality for the interaction phase to rehabilitate and expand Mossehallen. Including the execution phase, the project has a potential value of approx. NOK 200 million excl. VAT. In addition, further two contracts with a combined value of approx. NOK 275 excl. VAT has been reported to the stock exchange
- Order backlog: NOK 4,415 (7,054) million
Property
Low sales in the quarter
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
12 |
15 |
30 |
35 |
| EBIT |
21 |
32 |
75 |
75 |
| EBT |
23 |
33 |
82 |
76 |
| Invested capital |
654 |
703 |
654 |
703 |
- Low residential sales in the quarter. Sales contracts signed for a total of 9 (135) residential units in the quarter, whereof AF's share was 3 (60) units
- Seven projects with a total of 940 residential units are in production (AF's share is 438). Sales ratio on commenced projects is 76%
- Total of 73 residential units has been handed over at Brøter Terrasse in the quarter, an AF Eiendom project in Lillestrøm. In addition, the commercial property Hasle Tre has been completed in the quarter
- Residential portfolio under development: 1,580 (1,715) units. AF's share: 788 (821)
- Commercial portfolio under development: 62,256 (51,856) GFA sqm. AF's share: 30,949 (25,749)
Demanding quarter with weak results
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
2,142 |
1,894 |
7,445 |
6 300 |
| EBIT |
44 |
140 |
130 |
302 |
| EBT |
44 |
138 |
127 |
295 |
| EBIT % |
2.1% |
7.4% |
1,7% |
4,8% |
| EBT % |
2.1% |
7.3% |
1,7% |
4,7% |
- Sweden reports weak results with fluctuating profitability levels between business units
- Very good results from Kanonaden, AF Prefab Mälardalen, AF Härnösand Byggreturer and AF Bygg Syd. HMB reports good results
- Weak results within previously Betonmast Sweden units due to further downward adjustments of projects in the quarter
- HMB has been awarded two agreements in the quarter with a combined value of SEK 500 million excl. VAT. In addition, Kanonaden has been awarded two agreements with a combined value of SEK 330 million excl. VAT
- Order backlog: NOK 7,638 (9,112) million
Very good profitability
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
310 |
312 |
1 062 |
1 152 |
| EBIT |
33 |
52 |
84 |
109 |
| EBT |
32 |
53 |
82 |
107 |
| EBIT % |
10.5% |
16.7% |
7,9% |
9,4% |
| EBT % |
10.3% |
17.1% |
7,7% |
9,3% |
- Energy and environment reports very good results in the quarter
- AF Decom reports very good results despite lower activity compared to last year
- AF Energi with increased activity and good results this quarter. Efficient operations within renewable energy projects, and profits from the sale of an energy hub, increases the profitability positively
- AF Decom has sorted metal for recycling and recycled materials at the environmental centers corresponding to 41,878 (41,703) CO2-equivalents in 2022
- Order backlog: NOK 640 (714) million
Offshore
Very good profitability and revenue growth
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
368 |
225 |
1 238 |
848 |
| EBIT |
59 |
40 |
164 |
83 |
| EBT |
58 |
37 |
160 |
78 |
| EBIT % |
16.0% |
17.6% |
13,2% |
9,8% |
| EBT % |
15.9% |
16.6% |
12,9% |
9,2% |
- Offshore delivers strong revenue growth and very good quarterly results
- AF Offshore Decom with high activity levels and very high profitability in the quarter, as a result of high production and efficient operations at AF Environmental Base Vats
- AF Offshore Decom has sorted metal for recycling corresponding to 36,911 (40,990) CO2-equivalents in 2022
- AF AeronMollier reports increased revenue and high profitability this quarter
- Order backlog: NOK 1,694 (1,515) million
Strong Order Backlog
Business Area Civil Engineering
Q4 2022 | Theme presentation
Civil Engineering
Countrywide construction business
Updates since last
New strategy The family has grown High job satisfaction – Professional expertise and robust project organisations
Our largest project of all time We're gaining speed
We reduce greenhouse gas emissions
The market's external drivers form a good basis for further profitable growth
Strategic focus areas
- Metropolitan strategy and mobile capacity
- Major projects
- Strategically important skills and disciplines
- Upgrading of infrastructure
- Strong organic growth
- Growth ambition NOK 10 billion
AF's largest project of all time
- Project value NOK 8,750 million
- Social mission Strengthen secure delivery for clean drinking water for all of Oslo
- Partnership with Italian Ghella combining professional expertise from leading contracting environments
- Execution Large sections of the tunnel driven with TBM – developing new expertise in the organisation
- Other contracts Water treatment plant at Huseby with own project value of NOK 3,000 million
We save the environment from unnecessary greenhouse gas emissions
- Early involvement
- Find solutions with high utility
- Recycling and reuse
- Local solutions
- Optimised constructions and alignment
High job satisfaction Professional competence and robust project organisations
- We will attract, develop and retain the industry's best management and technical expertise
- Strong culture and high satisfaction
- Targeted competence development
- Robust organisation and good management capacity develop own leaders and technical experts
We are not only attracted to large projects
New hospital in Drammen Client: South-Eastern Norway Regional Health Authority
Østensjøbanen metro line Client: Sporveien
Nesjødammen Client: Statkraft
Statpipe New Landfall Client: Equinor
Construction City (Eiqon) Client: OBOS
Melkøya Customer: Equinor
Diversified project portfolio
Industrial area, Kvanndal (MMT) Client: Nordkraft Prosjekt
Water treatment plant, Huseby Client: City of Oslo/VAV
Basement i G.quarter. A-block (Stenseth & RS) Client: Hent/Statsbygg
New airport in Mo i Rana Client: Avinor
E39 Kristiansand – Mandal (Fjerby) Client: AF / Nye Veier
E4 Förbifart Stockholm Client: Swedish Transport Administration
To succeed in the market, we must master several disciplines
Geopolitical uncertainty
Changes in regulatory requirements and priorities New competition processes and forms of contracts
Larger projects
Innovation and closer collaboration
Environmental expertise
Our curiosity going forward
We seek risks that we can influence
The road ahead
Well positioned for further organic and structural growth
▪ Targeted focus on complex projects, new segments and selected geographical areas
Building an ever-stronger team
- Competent managers and the industry's best skilled management
- We develop our own managers and experts to a greater extent
- Best at offered own production
- Risk management and continuous improvement
Robust portfolio and financial position
▪ Healthy order backlog in a wide range of segments
4 th quarter 2022
Summary
| NOK million |
Q4 22 |
Q4 21 |
2022 |
2022 |
| Revenues |
8,568 |
8,112 |
31,205 |
27 868 |
| EBIT |
502 |
639 |
1,409 |
1 609 |
| EBT |
502 |
635 |
1,400 |
1 580 |
| EBIT % |
5.9% |
7.9% |
4,5% |
5,8% |
| EBT % |
5.9% |
7.8% |
4,5% |
5,7% |
- Revenue growth and good profitability
- Strong financial position
- Solid order backlog: NOK 39,765 (38,646) million
- The board of directors suggest a dividend of NOK 6.50 (6.50) per share to be paid in the first half of 2023
Thank you for your attention
Q1 | 12 May 2023