AF Gruppen — Interim / Quarterly Report 2018

May 9, 2018

Highlights

Strong growth

• Revenues: NOK 3,883 million (2,662)
• EBT: NOK 194 million (142)
• EBT margin: 5.0 % (5.4 %)
• Strong order backlog: NOK 19,451 million (15,984)
• Solid financial position: Net interest bearing receivables of NOK 1,017 million (1,063)
• Dividend proposal for payment 1st half-year 2018 of NOK 5.00 (5.00).

Safety

Lost-time injury frequency (LTIF)

Number lost-time injuries per million hours worked. Measuring of LTIF also includes injuries by subcontractor employees.

Total recordable injury frequency (TRIF)

Number of lost-time injuries, injuries involving substitute work and medical treatment injuries per million hours worked. Measuring of TRIF also includes injuries by subcontractor employees.

Reported unwanted incident frequency (RUIF)

Number of reported unwanted incidents per man-year.

Revenues

Q1 revenues by business area:

Earnings before tax

• A good 1st quarter
• EBT Q1: NOK 194 million (142)
• EBT % Q1: 5.0 % (5.4 %)

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

Cash flow statement

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

Net interest bearing receivables

Net interest bearing receivables as of 31 March is NOK 1,017 million (1,063).

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

Equity ratio

Health and environment

Sick leave Source separation rate

A total of 52,363 (85,675) tonnes of waste has been sorted in the 1st quarter.

Civil Engineering

High activity level

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

• AF Anlegg has a very high activity level and the unit delivers good results.
• Målselv Maskin & Transport delivers good Q1 results.
• AF Anlegg entered into an agreement in Q1| with Bane Nor Property for construction of new maintenance facilities for trains for Bane Nor Property at Kvalaberg in Stavanger. Contract value is estimated at NOK 200 million excl. VAT.
• Order backlog: NOK 5,723 million (5,281)

Environment

Higher activity level and good performance

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

• High activity level for AF Decom in Q1. The unit has good operational performance and delivers good Q1 results.
• Seasonally lower activity level at Rimol Miljøpark and Jølsen Miljøpark in Q1.
• Environment is developing a new environmental facility near Oslo. It is expected to open in Q2 2018 and will be the first facility of its kind in the eastern part of Norway.
• Order backlog: NOK 276 million (209)

Building

High activity level, stable results

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

• AF Bygg Oslo, LAB and the companies in MTH all deliver good Q1 results.
• AF Bygg Østfold, AF Byggfornyelse and Strøm Gundersen all have a higher activity level in Q1 and deliver satisfactory results.
• AF Nybygg has landed two new jobs after quarter-end, and the unit is expected to deliver positive results for 2018.
• Order backlog: NOK 9,936 (8,141)

Property

More positive residential market

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

55 (127) apartments were sold in Q1. AF's share is 22 (47).

• Four housing projects with 717 apartments in the production phase (AF's share 267). 77 % of the apartments in production are sold as per March 31st.
• Land and development rights in progress: 2,113 (2,278) residential units. AF's share is 856 (903)
• AF has 92,084 (93,642) m2 gross area of urban premises under development. AF's share is 45,273 (46,429).

Energy

Increasing activity level, weak results

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

• Increasing activity level for AF Energi & Miljøteknikk in Q1, but the unit delivers weak results.
• The results are affected by the start-up of two new offices in Bergen and Lithuania, as well as challenging completions of two EPC-contracts.
• Order backlog: NOK 286 million (164)

Sweden

Solid growth

M N O K	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7
I t k t n n e e r	5 0 7	3 2 7	1 6 1 1
E B I T	2 2	1 7	8 3
E B T	2 1	1 7	8 2
E B I T %	4. 3 %	2 % 5.	2 % 5.
E B T %	4. 2 %	2 % 5.	1 % 5.

Kanonaden Entreprenad delivers satisfactory results in Q1. Pålplintar has a lower activity level and delivers weak results.

• High activity level at AF Härnösand Byggreturer. The unit has good profitability in their projects in Q1.
• AF Bygg Göteborg and AF Bygg Syd delivers satisfactory quarterly results.
• Wait-and-see attitude in the swedish residential market. AF Projektutveckling still delivers strong Q1 results.
• Order backlog: NOK 1,746 million (1,051).

Offshore

Demanding market conditions

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

• As expected, AF Offshore Decom has a lower activity level, but the unit still delivers positive Q1 results.
• Demanding market conditions for AF AeronMollier. The unit has somewhat lower activity in Q1 and delivers weak results.
• AF AeronMollier has won several smaller projects in the 1st quarter, including contracts with Havyard Ship Technology as well as a contract for phase 2 of the Johan Sverdrup development.
• Order backlog: NOK 922 million (605)

Order backlog

Solid order backlog

Order backlog

Order backlog per business area

Innovation in AF

Innovation is one of the key elements of AF's group strategy for 2016-2020

Strategic initiative

We will increase our competitiveness through innovation

Improve the existing

Actively seek new business models for AF

Make strategic investments in start-up companies

Innovation in projects

1

2

Innovation in the Group

I i i A F t n n o a o n n v I i l i A F t n n o a o n g o a s n v
i i I d t t n c r e a s e p r o u c v y	f R d h l l t e u c e e e v e o c o	t s s V l a u e
i i I l t m p r o v e q u a y n p r o c e s s e s d h l f h d t t a n e v a u e o e e n d t p r o c u	A h h t t t t t r a c e s a r p e s m	i f t c r e a o n o r A F i d n s
	G r	i l i b h h h d h l d k t t t t t t t t e a p o e n a n o e s o r a n e o n g e r m a n m a e s b d f h f f i i d t t t t t t u s e e r p r e p a r e o a c e e o r m s o c o m p e o n a n i i l d f h f t t t t c o m p e e a n s c a p e o e r e. v u u

Group managed projects

The opportunities for innovation and using digital tools in construction processes are almost limitless

We work with robots in operations – both physical and virtual

AF is rapidly adopting new technologies

Extensive use of drones

Suitable for surveys, measuring masses and complicated demolition jobs

Digitalisation is taking place in every link of our projects' value chains

Changed business concepts having major impact

Self-developed technology for environmental parks Accepts polluted masses, decontaminates and reuses 80%

New technology and new methods are changing the way we execute our projects

Innovation in the Group 2

The Group coordinates innovation initiatives across AF and with external stakeholders

New business concepts

AF has a history of spinning off new business concepts from its traditional core

Construction City 2

Together with OBOS, we are creating a unique arena for interaction in Construction City

85,000 sqm business cluster for the building and construction industry and the property industry of the future that will be realised by 2023

Owners, developers and tenants

Project partners and tenants

Cluster partners

Construct Venture

Together with OBOS, we are establishing Construct Venture to invest in innovative technology for the building and construction industry

Construct Venture

Advanced technology proven in other industries is now being introduced into building and construction

	f E l a m p e s o s e x u	C i o m p a n e s
D i i t l i t i g a s a o n	B I M  3 D i  s c a n n n g P j l t t t r o e c m a n a g e m e n o o s 
V i l / A d / t t r u a u g m e n e M i d R l i t e e a x y	A d i l d l t t p a r m e n s p a y m o e s  O t t h t t i i t t t h d i i t l d l "l i "  u o n e c o n s r u c o n s e o s e e e g a m o e v e
M h i l i a c n e e a r n n g d t i f i i l a n a r c a i l l i t n e g e n c e	A h i l t t r c e c r a p r o c e s s  u A l i f l t f d t t d i t i t n a y s s o a r g e a m o u n s o a a o p r e c m a n e n a n c e 
R b t i t i o o s a o n	S i f b i l d i h k i i i l d l t t c a n n n g o n g s o c e c a g a n s o r g n a m o e  u M k i t f i t i l l a r n g o u o n e r o r w a s 
I f T h i t t n e r n e o n g s	S h i d h i d d h i d i l i i t t t t t e n s o r s o n m a c n e r a n o s n g o n e r s a n e r s e a n s a o n  y u u u u P d i i i t t r e c v e m a n e n a n c e 
3 D i t i p r n n g	S t f t t i h i t t h i t p a r e p a r s o r c o n s r u c o n m a c n e r y o u o n e s e  C f t t b i l d i  u s o m p a r s o r u n g s
O f f h t h l s o r e e c n o o g y	S f i i i t i t i d d i t i l t t t i i t  e s m c o r n v e s g a n g g r o u n c o n o n s o n a p o o r c o n s r u c o n s e H i l d i l l i f i i i "n d i l i " t t t t o r o n a r n g o r c o n n e c n g o m a n s p p e s o g s o o n s  z u –

Summary

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

• Strong revenue growth (+46 %)
• High order backlog: NOK 19,451 million (15,984)
• Strong financial position
• Dividend of NOK 5.00 per share (5.00)

Thank you for your attention!

Q2 2018: August 24th 2018