AF Gruppen — Interim / Quarterly Report 2021

May 11, 2021

11 May 2021

Q1 2021 AF Gruppen ASA

Highlights

AF Gruppen with good and improved profitability in the first quarter

• Revenue: NOK 6,209 million (6,607) in Q1
• Earnings before tax: NOK 245 million (206) in Q1
• Profit margin: 4.0% (3.1%) in Q1
• Cash flow from operations: NOK 205 million (499) in Q1
• Order backlog: NOK 33,818 million (32,492) as of 31 March 2021
• Net interest-bearing receivables of NOK 46 million (52) as of 31 March 2021

1 st quarter 2021

Safety and health

Revenues and earnings – quarterly

NOK million 206 245 0 100 200 300 400 500 600 700 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Revenues Earnings before tax Profit margin Margin

1 st quarter 2021

Return on capital employed

Rolling average last four quarters

Cash flow statement

NOK million	Q1 2021	Q1 2020	2020
EBIT	264	213	1 480
Depreciations, amortization and impairment	136	132	573
Change in net working capital	-115	211	-233
Other adjustments / taxes paid	-80	-57	-631
Cash flow from operations	205	499	1 189
Net investments	-38	-97	112
Cash flow from capital activities	-93	-152	-809
Interest paid and change in interest bearing debt	-104	-69	-357
Net change in cash and cash equivalents	-29	182	135
Net cash and cash equivalents at beginning of period	708	563	563
Change in cash and cash equivalents without cash effect	-49	20	10
Net cash and cash equivalents end of period	630	764	708

Net interest-bearing receivables and liquidity

Net interest-bearing receivables Net available liquidity

Available liquidity amounts to NOK 3,630 million (including financial facilities of NOK 3 000 million).

Lease liabilities - machines Lease liabilities - rental

Cash and cash equivalents Net receivables (interest-bearing)

Balance sheet

NOK million	31.03.2021	31.03.2020	31. 12.2020
Non-current assets	7,689	7,877	7,760
Current assets, ex. cash	4,613	4,397	4,394
Cash and cash equivalents	630	764	708
Total assets	12,932	13,037	12,862
Equity	3,553	3,045	3,494
Long term debt	1,402	1,545	1,426
Short term debt	7,977	8,447	7,942
Total equity and debt	12,932	13,037	12,862

Equity ratio excluding the effect of IFRS 16 would be 29,2% at 31.03.21 All the company's covenants exclude the effect of IFRS 16

Environment

122 988 (88%) 528 758 (86%) 37 972 (77%) 0 100 000 200 000 300 000 400 000 500 000 600 000 YTD 2020 87% 84% 97% 0% 20% 40% 60% 80% 100% Building Demolition 2020 2021 Recycling rate 77% (88%) YTD 15 324 38 533 14 470 0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 YTD 2020 Waste sorted: 105,369 tonnes (103,336) YTD Source separation rate Metal demolished and sorted for recycling Recycling environmental parks Regulatory requirement

14,470 tonnes = 14,470 tonnes CO2-equivalents 37,972 tonnes = 2,815 tonnes CO2-equivalents

Good activity and solid profitability

NOK million	Q1 2021	Q1 2020	2020
Revenues	1,509	1,170	5,218
EBIT	96	56	314
EBT	94	59	292
EBIT %	6.4 %	4.8 %	6.0 %
EBT %	6.2 %	5.0 %	5.6 %

• AF Anlegg delivered good results. The operational performance of the unit's project portfolio is in general good
• Målselv Maskin & Transport continues to deliver strong results
• Eiqon and Consolvo delivered results below expectations due to variation in the profitability in the project portfolios
• The Covid-19 outbreak and associated restrictions create challenges and impact all projects. However, most projects have managed to maintain good production
• Order backlog: NOK 7,140 million (9,259 million) as of 31 March 2021

Good order intake and solid order backlog

NOK million	Q1 2021	Q1 2020	2020
Revenues	1,853	2,316	8,684
EBIT	82	123	502
EBT	82	126	513
EBIT %	4.4 %	5.3 %	5.8 %
EBT %	4.4 %	5.4 %	5.9 %

• The activity level was reduced, and profitability is somewhat weaker than expected
• Several units delivered good results in the quarter, including AF Bygg Oslo, Strøm Gundersen, AF Bygg Østfold, HTB and AF Byggfornyelse
• AF Nybygg and Strøm Gundersen Vestfold delivered weak results in the quarter due to variation in the project portfolio and a low level of activity, respectively
• Covid-19 has created challenges in several projects, however most projects have managed to maintain good production
• Order backlog: NOK 12,041 million (9,798 million) as of 31 March 2021

Weak profitability but stable order backlog

NOK million	Q1 2021	Q1 2020	2020
Revenues	1,656	1,823	7,862
EBIT	37	44	261
EBT	27	46	252
EBIT %	2.2 %	2.4 %	3.3 %
EBT %	1.7 %	2.5 %	3.2 %

▪ Betonmast delivered weak profitability in the quarter

• Considerable variation in the results to the Norwegian units. Betonmast Romerike, Oslo og Østfold deliver consistently good results
• Betonmast Boligbygg delivered another quarter with results below expectation. Organisational changes were implemented and risk reviews of all ongoing projects were initiated
• The activity level and the profitability of the Swedish Betonmast units are stable
• Betonmast's property portfolio has three property projects under production
• Order backlog: NOK 8,073 million (8,057 million) as of 31 March 2021

Good sales

NOK million	Q1 2021	Q1 2020	2020
Revenues	6	6	33
EBIT	7	4	135
EBT	7	3	132
Capital employed	897	906	844

• From the beginning of the year, Property has been divided into two operating units, AF Eiendom and LAB Eiendom, to ensure increased local roots
• Good sales in the quarter, especially for AF Eiendom's project Fyrstikkbakken. A total of 122 (80) apartments were sold in the quarter, of which AF's share was 44 (28)
• Four residential property projects under production with a total of 558 units, of which AF's share was 209. The sales ratio for commenced projects was 87%.
• Property also has a significant development portfolio estimated at 2,438 (2,423) units. AF's share of this was 1,223 (1,183) residential units

Stable activity level and good profitability

NOK million	Q1 2021	Q1 2020	2020
Revenues	250	224	962
EBIT	11	2	54
EBT	9	6	52
EBIT %	4.4 %	0.8 %	5.6 %
EBT %	3.7 %	2.8 %	5.5 %

• AF Decom increased its level of activity and continues to deliver good profitability for both demolition and recycling at AF's environmental centres
• The environmental centres have recovered a total of 37,972 (122,988) tonnes of materials year to date, and the recycling rate realised for contaminated materials was 77%. Cool weather has affected the volume of recovered materials in the quarter
• AF Decom has demolished and facilitated the recycling of 3,706 (7,191) tonnes of metal in the quarter
• Profitability in AF Energi & Miljøteknikk's project portfolio is variable and there is a need for a further increase in the level of activity
• Order backlog: NOK 701 million (533 million) as of 31 March 2021 Furumoen swimming pool

Stable activity and profitability

NOK million	Q1 2021	Q1 2020	2020
Revenues	959	1 035	4 138
EBIT	39	42	219
EBT	38	41	212
EBIT %	4.1 %	4.0 %	5.3 %
EBT %	3.9 %	3.9 %	5.1 %

• Sweden maintained stable profitability
• Kanonaden delivered strong revenue growth and stable good results
• HMB delivered good profitability in the quarter, while the other construction units reported somewhat weaker profitability
• AF Härnösand Byggreturer increased the activity level and maintained good results
• AF Projektutveckling has two residential and a school project under production
• Order backlog: NOK 3,966 million (3,056 million) as of 31 March 2021

Increased activity and improved results

NOK million	Q1 2021	Q1 2020	2020
Revenues	160	128	672
EBIT	8	-52	-25
EBT	6	-55	-40
EBIT %	4.9 %	-40.9 %	-3.7 %
EBT %	3.7 %	-43.3 %	-5.9 %

• AF Offshore Decom had a significantly higher level of activity and improved profitability compared to same quarter last year
• Good operational performance at AF Environmental Base Vats contributed to the good results in the quarter
• AF Offshore Decom has demolished and facilitated the recycling of 10,764 (8,133) tonnes of steel in the quarter
• AF AeronMollier reported a decrease in revenue in the quarter as a result of the postponements of several projects. However, the unit managed to deliver a weak positive result in the quarter
• Order backlog: NOK 1,460 million (1,385 million) as of 31 March 2021

Order backlog

Strong order backlog

Environment May 11th 2021

AF Gruppen will increase competitiveness and promote profitable growth through four strategic initiatives

Climate and environment

We will reduce our footprint and lead the way in creating socially beneficial business opportunities

NEW SOCIALLY BENEFICIAL BUSINESS OPPORTUNITIES

REDUCE OUR FOOTPRINT

RESOURCE EFFICIENCY AND CIRCULARITY

GOOD CLIMATE AND ENVIRONMENTAL MANAGEMENT

New socially beneficial business opportunities

Our vision: Clearing up the past, building for the future

At AF Miljøbase Vats we have:

▪ Prepared steel for recycling the equivalent of 27 Eiffel Towers ▪ Contributed towards saving 283,500 tonnes of CO² , the equivalent of 40% of the annual emissions of all construction machinery in Norway

CLEARING UP THE PAST, BUILDING FOR THE FUTURE

Our recycling centres operate rather like bottle deposits for natural resources.

• Green innovation in practice
• We have the expertise and services required for helping our customers to adopt a circular economy
• The recycling rate for the year was 86%

CLEARING UP THE PAST, BUILDING FOR THE FUTURE

By mapping and implementing energy-efficient and renewable solutions, AF has:

• Delivered energy efficient solutions to more than 2 million m2 of building stock in public buildings
• Contributed to producing 300 GWh annually. This corresponds to the consumption of 15,000 houses
• Leveraged local energy sources and various renewable energy carriers such as seawater, sewage, geothermal and solar energy

Technology - also a catalyst for climate benefits

• Investments in early-stage start-ups
• Software that streamlines traditional working methods
• More efficient ways to solve tasks
• Positive effect for climate and environment

Reduce our footprint

In order to achieve our long-term climate and environmental ambitions, we will increase our knowledge about our greenhouse gas emissions and waste production

STRATEGIC INITIATIVES

In order to achieve our long-term climate and environmental ambitions, we will increase our knowledge about our greenhouse gas emissions

CARBON FOOTPRINT

In line with the Paris Agreement, AF Gruppen will reduce its relative greenhouse gas emissions by 50% by 2030

• Halve relative greenhouse gas emissions by 2030, in terms of CO2 equivalents per million revenue.
• Set goals and prioritise measures per business area.
• Report what constitutes green revenues in accordance with the EU's taxonomy.

EARLY INVOLVEMENT AND LOGISTICS PLANNING CAN PRODUCE GREAT BENEFITS

Resource efficiency and circularity

Limited access to resources and development trends in society requires the development of new and sustainable solutions.

STRATEGIC INITIATIVES

In order to achieve our long-term climate and environmental ambitions, we will increase our knowledge about our waste production

CIRCULAR ECONOMY

AF Gruppen will halve the amount of waste materials that are not recycled or reused by 2030, and will also contribute towards a growing circular economy

• Halve the amount of waste that cannot be recycled by 2030.
• Process waste as close to the top of the hierarchy as possible, and avoid the unnecessary disposal of waste that could have been reused or recycled.

Good climate and environmental management

If we are to achieve the goals we have set, we are dependent on having good climate and environmental management throughout the organisation, all the way down from senior management to our projects.

AWARENESS OF EXPLOITING OUR ROLE AS A BUILDER AND CONTRACTOR

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Our strategy is taking external drivers into account

Climate accounts and measurements 2020

Summary

NOK million	Q1 2021	Q1 2020	2020
Revenues	6,209	6,607	27,025
EBIT	264	213	1 480
EBT	245	206	1 447
EBIT %	4.2 %	3.2 %	5.5 %
EBT %	4.0 %	3.1 %	5.4 %

• Good profit margin
• Strong financial position
• High order intake
• Order backlog: NOK 33,818 million (32,492 million)

Thank you for your attention

Q2 2021 August 27th 2021