August 25th 2017
Q2 2017 AF Gruppen ASA
Highlights
Good quarter and strong order intake
- Revenues: NOK 3,347 million (3,170) in Q2 vs. NOK 6,009 million (5,877) year-to-date.
- EBT: NOK 250 million (249) in Q2 vs. NOK 393 million (435) year-to-date.
- EBT margin: 7.5% (7.8 %) in Q2 vs. 6.5 % (7.4 %) year-to-date.
- Strong order backlog: NOK 18,928 million (11,626)
- Incoming orders in Q2 of NOK 6.3 billion
- Solid financial position: Net interest bearing receivables of NOK 698 million (300)
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
Q2 revenues by business area:
Revenues 1st half-year: NOK 6,009 million (5,877)
Earnings before tax
- Good margins in all six business areas in Q2
- EBT Q2: NOK 250 million (249)
- EBT % Q2: 7.5 % (7.8 %)
- EBT 2017 YTD: NOK 393 million (435)
- EBT % 2017 YTD: 6.5 % (7.4 %)
Return on capital employed
12 month rolling average
*AF's target is to achieve a return on capital employed above 20 %.
Cash flow statement
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
E
B
I
T |
2
1
5 |
2
8
4 |
3
9
6 |
3
6
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
1 |
3
3 |
8
1 |
6
5 |
C
h
i
t
k
i
i
t
l
a
n
g
e
n
n
e
o
r
n
g
c
a
p
a
w |
2 |
8
2
- |
2
9
0 |
6
4
- |
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 |
9
2
- |
9
- |
1
4
7
- |
9
5
- |
C
h
f
l
f
i
t
a
s
o
r
o
m
o
p
e
r
a
o
n
s
w |
2
0
3 |
1
9
0 |
6
1
9 |
3
4
2 |
N
t
i
t
t
e
n
v
e
s
m
e
n
s |
1
0
5
- |
3
- |
2
4
7
- |
2
6
- |
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 |
5
0
2
- |
5
1
9
- |
3
2
2
- |
5
8
0
- |
I
t
t
i
d
d
h
i
i
t
t
b
i
d
b
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
1 |
6 |
5
- |
1
7 |
N
d
(
i
)
i
h
d
h
i
l
t
t
e
e
c
r
e
a
s
e
n
c
r
e
a
s
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n
c
a
s
a
n
c
a
s
e
q
u
v
a
e
n
s |
3
9
4
- |
3
2
7
- |
4
5 |
2
4
8
- |
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
u
v
a
e
n
s
a
e
g
n
n
n
g
o
p
e
r
o |
9
0
7 |
5
3
6 |
4
6
9 |
4
5
9 |
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
u
v
a
e
n
s
w
o
u
c
a
s
e
e
c |
1
- |
2 |
2
- |
0 |
N
h
d
h
i
l
d
f
i
d
t
t
e
c
a
s
a
n
c
a
s
e
q
a
e
n
s
e
n
o
p
e
r
o
u
v |
1
2
5 |
2
1
1 |
1
2
5 |
2
1
1 |
Net interest bearing receivables
Net interest bearing receivables as of 30 June is NOK 698 million (300).
Equity ratio
Health and environment
Sick leave in Q2: 2.8 %
Sick leave Source separation rate
A total of 74,780 (191,959) tonnes of waste has been sorted in the 2nd quarter, and a total of 161,887 (283,771) tonnes has been sorted in the first half-year.
Civil Engineering
High activity level and good operational performance
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
R
e
v
e
n
u
e
s |
1,
0
6
1 |
9
6
0 |
1,
9
1
8 |
1,
7
8
1 |
E
B
I
T |
6
7 |
8
2 |
1
2
6 |
1
8
2 |
E
B
T |
6
9 |
8
4 |
1
2
8 |
1
9
2 |
E
B
I
T
% |
6.
3
% |
8.
%
5 |
6.
6
% |
1
0.
2
% |
E
B
T
% |
6.
%
5 |
8.
%
7 |
6.
%
7 |
1
0.
8
% |
- AF Anlegg has had a successful start-up on the E18 Tvedestrand- Arendal project. High activity level and good operational performance for the unit.
- Målselv Maskin & Transport and Kanonaden Entreprenad both have good operational performance and deliver good Q2 results.
- Pålplintar has turned around a weak start to the year and delivers good results in Q2.
- AF Anlegg awarded large contract after quarter-end for the construction of E6 through Soknedal in Trøndelag.
- Order backlog: NOK 5,698 million (2,934)
Environment
Lower activity level, good operational performance
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
R
e
e
n
e
s
v
u |
1
4
9 |
2
0
6 |
2
4
7 |
3
6
8 |
E
B
I
T |
1
2 |
1
5 |
1
7 |
2
2 |
E
B
T |
1
2 |
1
5 |
1
6 |
2
2 |
%
E
B
I
T |
7.
9
% |
7.
4
% |
6.
1
% |
6.
1
% |
%
E
B
T |
7.
8
% |
7.
3
% |
6.
0
% |
6.
0
% |
- Due to fewer large projects in their portfolio, AF Decom experiences a slightly lower activity level.
- Lower activity level in AF Härnösand Byggreturer, but the unit has good profitability.
- High activity level and good operational performance at Rimol Miljøpark in Q2.
- The establishment of the new environmental facility at Nes in Akershus has started. Construction to be completed in Q2 2018.
- Order backlog: NOK 383 million (264)
Building
High activity level and strong order intake
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
R
e
v
e
n
u
e
s |
1,
9
2
6 |
1,
6
9
8 |
3,
2
1
5 |
3,
3
0
9 |
E
B
I
T |
1
1
4 |
1
2
5 |
1
9
6 |
2
0
6 |
E
B
T |
1
1
7 |
1
3
0 |
2
0
2 |
2
1
3 |
E
B
I
T
% |
5.
9
% |
7.
4
% |
5.
6
% |
6.
2
% |
E
B
T
% |
6.
1
% |
7.
6
% |
7
%
5. |
6.
4
% |
- AF Bygg Oslo, LAB and the companies in Strøm Gundersen and MTH all deliver good Q2 and first half-year results.
- AF Bygg Østfold and AF Bygg Sverige has started on several new projects in Q2. Both units deliver satisfactory quarterly results.
- Market conditions in south-western Norway are demanding and AF Bygg Prosjektpartner delivers weak results.
- Bygg has announced 13 new contracts in Q2, with a total contract value of NOK 3.7 billion excl. VAT.
- Order backlog: NOK 10,950 (7,105)
Property
Good sales ratio
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
R
e
v
e
n
u
e
s |
1
4 |
1
4 |
2
2 |
2
3 |
E
B
I
T |
2
0 |
1
7 |
4
7 |
2
6 |
E
B
T |
1
7 |
1
2 |
4
0 |
1
8 |
E
B
I
T
% |
1
4
8.
8
% |
1
2
4.
3
% |
2
1
1.
%
5 |
1
1
2
%
5. |
E
B
T
% |
1
2
3
%
7. |
8
6.
8
% |
1
8
2.
1
% |
8
1.
2
% |
54 (115) apartments were sold in Q2. AF's share is 20 (47).
- Seven housing projects with 1,081 apartments in the production phase (AF's share 480). 89 % of the apartments in production are sold as per June 30th.
- Land and development rights in progress: 2,580 (2,281) residential units. AF's share is 1,096 (975)
- AF has 92,084 (125,444) m2 gross area of urban premises under development. AF's share is 45,273 (60,322).
Energy
Good results and strong order intake
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
R
e
v
e
n
u
e
s |
5
9 |
4
5 |
1
1
0 |
8
2 |
E
B
I
T |
6 |
4 |
1
0 |
6 |
E
B
T |
6 |
3 |
1
0 |
4 |
E
B
I
T
% |
1
0.
3
% |
8.
4
% |
9.
3
% |
4
%
7. |
E
B
T
% |
1
0.
4
% |
6.
%
7 |
9.
3
% |
2
%
5. |
- AF Energi & Miljøteknikk increases their activity level in Q2. Good operational performance for AF Energi & Miljøteknikk in ongoing projects and the unit delivers good Q1 and 1st half-year results.
- Stable demand for energy services. The unit has a high volume of tender calculations and a rising order backlog
- AF Energi & Miljøteknikk awarded contract K302 Heating and Cooling system for Statsbygg at Campus Ås. Contract value is NOK 109 million excluding VAT.
- Order backlog: NOK 345 million (94)
Offshore
Good results form demolition activities
N
O
K
i
l
l
i
m
o
n |
Q
2
2
0
1
7 |
Q
2
2
0
1
6 |
Y
T
D
2
0
1
7 |
Y
T
D
2
0
1
6 |
R
e
v
e
n
u
e
s |
2
0
0 |
2
4
0 |
3
5
5 |
3
9
2 |
E
B
I
T |
1
7 |
2
7 |
2
7 |
3
3 |
E
B
T |
1
4 |
2
4 |
2
2 |
2
0 |
%
E
B
I
T |
%
8.
5 |
%
1
1.
2 |
%
7.
6 |
%
8.
5 |
%
E
B
T |
%
7.
2 |
%
1
0.
1 |
%
6.
2 |
%
5.
2 |
- Good operational performance and good results for AF Offshore Decom. The unit successfully completed the offshore campaign on the Murchison project in Q2.
- Demanding market conditions for AF Offshore AeronMollier. The unit has low activity in Q2 and delivers weak results for.
- AF Offshore Decom has beenawarded a contract by ConocoPhillips Skandinavia for the removal and disposal of 4 platforms connected to the Ekofisk field. The project will run from 2017 to 2022.
- Order backlog: NOK 1,004 million (963)
Order backlog
Q1 Q2 Q3 Q4
Order backlog
Order backlog per business area
Developing attractive homes and jobs
Ladejarlen, Trondheim, 400 units in partnership with Stokke Industri and EKO Eiendom
•
•
Our two-pronged strategy for the property business
Conscious partnership strategy
- •Risk spreading
- • Reciprocal learning and access to new property opportunities
- •Disciplined
- • Less invested capital per m2 right to build option for VO Bygg
- •Not consolidated
Highly competitive with own contractor
Client and contractor together from day one
Continued growth in line with AF and building business
AF Eiendom, Norway:
- • Constitutes the 'hub' of project development: creating value in cooperation with fellow investors and partners.
- •Actively helping to professionalise the property industry
- • Building a bigger housing portfolio in Bergen, otherwise mirroring the building business's growth ambitions
Skiparviken, Bergen – 141 units in partnership with Profier
AF Projektutveckling, Sweden:
- • We want to develop attractive properties with the city and our partners in which people want to live and work
- • Raising our profile in Gothenburg and, in the future, considering new regions in Sweden
- •Growing both our housing and commercial site portfolios
Skeppsbron, Gothenburg – 100 (125) units in discussions with several potential partners
Our model for disciplined capital use is working well
- •"The industry's most expensive capital"
- • Option agreements and site acquisition agreements with deferred payment
- • Smaller stakes result in less invested capital per m2 right to build option
- •High external borrowing assessment
- • VO Bygg will have prior right to construction contracts and a potentially higher overall return will be generated on invested capital
- • 6 contracts awarded to VO Bygg over the past 12 months. Total value of NOK 2,1 billion Lillo Gård, Oslo, 411 units
in partnership with OBOS, Aspelin Ramm, Eiendomsplan, and others
Record high home sales in 15/16 mean good result predictability
Annual number of home sales (100%)
- •1,165 homes sold in total in 2015 and 2016
- • Average turnover per housing project is ≥ NOK 800 million
- • Housing projects are split into smaller phases and commenced once ≥ 50% have been sold
- • Income recognition in relation to project's prognoses x degree of completion (FG) x degree of sales (SG)*
- • Record high home sales in 2015/2016 mean good result predictability for the next three years
*is eliminated on group level in accordance with IFRIC until handover
New sales records and high AF own production share
• The development portfolio is expected to be able to produce a total turnover of NOK 16.5 billion in 2017-2023(Bolig og Næring)
We are preparing for a more demanding market going forward
- • A 'normalisation' of the housing market is not unexpected
- • Little acquisition in the last twelve months in Greater Oslo due to price level and competition situation
- • Low risk in started projects (degree of sales 89%, 128 unsold units)
- • Clause prohibiting contract sales to counteract non-performance of purchase contracts
- • Positive expectations for housing projects in Gothenburg, Bergen and Trondheim
- • Still quiet in the office market, but some bright points
Summary
A good quarter
- All time high order backlog: NOK 18,928 million (11,626)
- Decline in LTI and all-time low absence due to illness
- Strong financial position and order intake supports our growth strategy
Thank you for your attention!
Q3 2017: November 10th 2017