Quarterly Report • Nov 8, 2019
Quarterly Report
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Third Quarter 2019
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AF shall maintain constant development and challenge established truths. We have been in continuous evolution for decades, and have recently welcomed 1,000 new employees to the AF family. The acquisition of Betonmast will stand out as a significant milestone in AF Gruppen's history, and is the start of something we believe will be a great partnership. Together we have exceptionally strong expertise. Our ambition is to develop this expertise and create lasting value for our stakeholders.
Strong growth must not be at the expense of safe and profitable operations. It is pleasing that the injury rate in the quarter is low, and our goal of zero work-related absence remains in place. Good and effective risk management is a key to ensure profitable operations. An important rule of thumb for us is to limit exposure to risk that cannot be influenced. Risk management is not only about protecting oneself from threats, but also about being proactive and grasping opportunities. Developments in the third quarter show that safe operations and risk management, in combination with an entrepreneurial spirit and an ability to perform, creates profitable growth.
AF has always been proud of its strength and ability to perform complex tasks. The group's entrepreneurial spirit has been characterised by the ability and willingness to think differently and to find better, more future-oriented ways to generate value.
$1$ The Implementation of IFRS 16 Leases from 1 January 2019 led to an increase in interest-bearing debt. The effect of IFRS 16 as at 30 September 2019 was NOK 881 million.
| Key figures (NOK million) | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| Revenues and other income | 5,069 | 4,536 | 16,146 | 13,111 | 18,767 |
| EBITDA | 465 | 364 | 1,293 | 891 | 1,303 |
| Earnings before finacial items and tax (EBIT) | 343 | 315 | 943 | 756 | 1,119 |
| Earnings before tax (EBT) | 339 | 313 | 929 | 764 | 1,136 |
| Result per share (NOK) | 2.32 | 2.24 | 6.27 | 5.10 | 7.88 |
| Diluted result per share (NOK) | 2.29 | 2.24 | 6.23 | 5.10 | 7.88 |
| EBITDA margin | 9.2% | 8.0% | 8.0% | 6.8% | 6.9% |
| Operating profit margin | 6.8% | 7.0% | 5.8% | 5.8% | 6.0% |
| Profit margin | 6.7% | 6.9% | 5.8% | 5.8% | 6.1% |
| Return on capital employed (ROaCE) 1) | 42.9% | 51.3% | 53.9% | ||
| Cash flow from operating activities | 182 | 100 | 724 | 260 | 841 |
| Net interest-bearing debt (receivables) | 598 | $-680$ | 598 | $-680$ | $-894$ |
| Equity ratio | 21.8% | 25.9% | 21.8% | 25.9% | 25.0% |
| Order backlog | 23,000 | 18,920 | 23,000 | 18,920 | 21,541 |
| LTI-1 rate | 0.2 | 0.3 | 0.9 | 0.8 | 0.8 |
| Absence due to illness | 3.5% | 3.1% | 3.5% | 3.3% | 3.3% |
1) Rolling average last four quarters
IFRS 16 Leases is implemented from 1 January 2019. Historical figures have not been reworked. See Note 4 for further information.
OPERATING PROFIT (%)
| NOK million | 30.19 | 3Q 18 | YTD 3Q 19 | YTD 30 18 | 2018 |
|---|---|---|---|---|---|
| Revenues and income | 1.307 | 1.485 | 1.670 | 4.212 | 5,861 |
| Earnings before financial items and tax (EBIT) | 236 | 275. | |||
| Earnings before tax (EBT) | ววด | 293 | |||
| Operating profit margin | 5.8% | 3.8% | 5.1 % | 3.9% | 4.7 % |
| Profit margin | 5.7 % | 4 0 % | 5.1 % | $4.3\%$ | $.0\%$ |
• AF Anlegg
• Målselv Maskin & Transport
AF is one of Norway's largest actors in the civil engineering market, and the customers include both public and private actors. Its project portfolio includes roads, railways, port facilities, airports, tunnels, foundation work, power and energy, as well as onshore facilities for oil and gas.
The Civil Engineering business area reported revenues of NOK 1,307 million (1,485 million) for the 3rd quarter. This is equivalent to reduction of 12% compared to the same quarter last year. Earnings before tax were NOK 75 million (60 million). Revenues totalled NOK 4,670 million (4,212 million) and earnings before tax totalled NOK 238 million (180 million) year to date.
AF Anlegg has maintained a high level of activity in the quarter and the unit is delivering solid results. Since the E18 Tvedestrand-Arendal project was opened to traffic on 2 July, there has been significantly less activity on the project, but follow-up work will continue to the end of the year. The E39
Kristiansand vest-Mandal øst project is currently occupying around 600 people. This is a large and challenging project, but it is progressing according to plan. There are several projects contributing to the good overall performance of the unit. Målselv Maskin & Transport has seen a high level of activity and particularly good results in the quarter.
Civil Engineering entered into several major contracts in the 3rd quarter. AF Gruppen has been chosen by Statsbygg to handle the implementation of the general energy supply contract for the new government quarter in Oslo. The contract works start in October 2019 and are expected to complete in December 2023. This is a collaboration contract with an estimated value of NOK 550 million excl. VAT. An agreement has also been concluded with Sporveien AS for the 'Ryen Verksted' contract, with an estimated value of NOK 250 million excl. VAT. Målselv Maskin & Transport has been chosen as supplier to a new building and construction project for the outer perimeter of the Evenes air base for Forsvarsbygg. This is a general contract and has an estimated value of NOK 136 million excl. VAT.
The order backlog for Civil Engineering stood at NOK 6,018 million (4,619 million) as at 30 September 2019.
OPERATING MARGIN (%)
| NOK million | 3Q 19 | 30 18 | YTD 3O 19 | YTD 30 18 | 2018 |
|---|---|---|---|---|---|
| 6.216 | |||||
| Revenues and income | 2.549 | 2.150 | 7.793 | 9,055 | |
| Earnings before finacial items and tax (EBIT) | 162 | 158 | 388 | 619 | |
| Earnings before tax (EBT) | 161 | 462 | 404 | 645. | |
| Operating profit margin | 6.3 % | 7.3 % | 5.8% | 6.2 \% | $6.8\%$ |
| Profit margin | 6.3 % | 7.6% | 5.9% | $6.5\%$ | $7.1\%$ |
AF provides contracting services for residential, public and commercial buildings. Our services range from planning to building and renovation. AF cooperates closely with customers to find efficient and innovative solutions adapted to their needs. The Building business area comprises activities in Eastern Norway and the Bergen Region.
Building reported revenues of NOK 2,549 million (2,150 million) for the 3rd quarter. This corresponds to revenue growth of 19% compared with the same quarter last year, of which 7% is caused by the acquisition of HTB. Earnings before tax were NOK 161 million (162 million). Revenues totalled NOK 7,793 million (6,216 million) and earnings before tax were NOK 462 million (404 million) year to date.
Most business units have seen growth in revenues and are delivering good results for the quarter, including the construction companies AF Bygg Oslo, AF Nybygg and Strøm Gundersen. The contract business in Bergen and the units engaged in renovation jobs in Oslo are also delivering strong results. In AF Byggfornyelse and AF Bygg Østfold there are wide variations in profitability in the project portfolios, and the units performed below expectations in the 3rd quarter.
Several new contracts were signed in the 3rd quarter. AF Bygg Østfold has been chosen by Sørby Utleie as turnkey contractor for new buildings and outdoor areas with a contract value of NOK 113 million excl. VAT. The contract works started in August 2019 and the expected handover is in July 2020. AF Nybygg has signed an agreement to build Bråtejordet B7, a housing project consisting of 125 apartments and 63 townhouses at Strømmen. The estimated contract value is NOK 465 million excl. VAT. The start of construction is scheduled for the 4th quarter of 2019, and completion is expected in Q4 2022.
Building's order backlog was NOK 11,529 million (10,273 million) as at 30 September 2019.
EARNINGS BEFORE TAX (NOK Million) UNITS SOLD (NUMBER)
TURNOVER UNITS IN PRODUCTION (NOK Million)
| NOK million | 3O 19 | 3Q 18 YTD 3Q 19 YTD 3Q 18 | 2018 |
|---|---|---|---|
| Revenues and income | |||
| Earnings before finacial items and tax (EBIT) | -66 | ||
| Earnings before tax (EBT) | |||
| apital employed. |
• AF Eiendom
The Property business area develops residential units and commercial buildings in Norway. The activities take place in geographic areas where AF has its own production capacity. AF cooperates closely with other actors in the industry, and the development projects are primarily organised as partly-owned companies that are consolidated in accordance with the equity method of accounting. The earnings that are consolidated in Property correspond to the earnings after tax multiplied by the ownership interest.
Good sales in several projects have resulted in Property reporting a good pre-tax result of NOK 26 million (79 million) in the 3rd quarter. Earnings in the 3rd quarter of 2018 were marked by the sale of a commercial property at Hasle in Oslo.
Sales have been good with 61 (65) sold apartments in the 3rd quarter, of which AF's share is 22 (25). 303 (237) apartments have been sold year to date, of which AF's share is 114 (84). The sales ratio for projects in progress is 81%.
At the end of the quarter Property had ownership interests in residential projects with a total of 246 (308) units for sale. AF's share was 94 (127). Of these, there was a total of 40 (1) unsold completed apartments, of which AF's share was 14 $(0.3)$ .
There are handed over 73 units at Lillo Gård and 65 units in Krydderhagen in the 3rd quarter, a total of 138 (20) homes.
The handover of these homes explains the decrease in turnover units in production in the third quarter.
There are six residential property projects with a total of 645 apartments under construction, of which AF's share is 248:
For further information on projects for own account, see note 7.
As at the 3rd quarter, Property had ownership interests in two commercial projects under construction in Oslo, with a gross floor area of 38,401 square metres, of which AF's share is 19,009 square metres:
AF has an ownership stake in a building site inventory (residential units under development) in Norway that is estimated to yield 1,962 (1,878) residential units. AF's share of this is 949 (782) residential units. In addition, AF also has an ownership stake in commercial property under construction with a gross floor area of 52,183 (53,683) square metres. AF's share of this is a gross floor area of 25,764 (26,264) sq. metres.
OPERATING MARGIN (%)
| NOK million | 30 19 | 3Q 18 YTD 3Q 19 YTD 3Q 18 | 2018 | ||
|---|---|---|---|---|---|
| Revenues and income | 267 | 210 | 644 | ||
| Earnings before finacial items and tax (EBIT) | |||||
| Earnings before tax (EBT) | |||||
| Operating profit margin | 7.0 % | 5.1 % | 5.6 % | 44% | . በ % |
| Profit margin | 7.1 % | 6 % | 5.3 % | 3.8% | 7 % |
NUMBER OF EMPLOYEES
• AF Energi & Miljøteknikk • AF Decom
AF provides smart and energy-efficient services for buildings and industry, and is a leading actor within traditional demolition services and the subsequent receiving, treating and recycling of materials. At AF's environmental centres: Rimol, Jølsen and Nes, contaminated materials are sorted, decontaminated and recycled. More than 80% of the materials are recycled.
Revenues for the 3rd quarter were NOK 267 million (210 million) and earnings before tax were NOK 19 million (10 million). This corresponds to revenue growth of 27% compared to the same quarter last year. Revenues totalled NOK 773 million (644 million) and earnings before tax totalled NOK 41 million (24 million) year to date.
AF Energi & Miljøteknikk delivered solid results. Among other things, several energy saving contracts (EPCs) contributed to the revenue growth and good profitability in the quarter. A large order backlog and several exciting tenders offer positive prospects for the energy business.
AF Decom is also delivering solid results in all departments. Projects linked to a new hospital in Drammen and the Norwegian Radium Hospital are among the reasons for the high level of activity in Eastern Norway. Activity levels in the bulk recycling centres are on a par with the same quarter last year, and profitability is good. Increased activity in the new facility at Nes makes up for a lower activity level at the Rimol centre. AF Gruppen is looking at the possibility of establishing more recycling centres in the future.
The order backlog for Energy & Environment stood at NOK 510 million (456 million) as at 30 September 2019.
OPERATING MARGIN (%)
| NOK million | 30 19 | 3Q 18 | YTD 3Q 19 YTD 3Q 18 | 2018 | |
|---|---|---|---|---|---|
| Revenues and income | 827 | 2.590 | 1.612 | 2.270 | |
| Earnings before finacial items and tax (EBIT) | 14 | ||||
| Earnings before tax (EBT) | |||||
| Operating profit margin | 4.4 % | 4.2% | 3.7 % | 5.4 % | 5.0 % |
| Profit margin | 3 % | $4.1\%$ | 3 6 % | 5.3 % | $5.0\%$ |
NUMBER OF EMPLOYEES
• AF Bygg Göteborg
$\cdot$ HMB
AF's Swedish business area encompasses activities related to building, civil engineering, property and environmental activities in Sweden. Geographically, the business unit covers Southern Sweden as well as Stockholm and Mälardalen.
Sweden reported revenues of NOK 827 million (475 million) for the 3rd quarter. This corresponds to a growth of 74% compared to the same quarter last year, which is caused by the acquisition of HMB and revenue growth in all entities. Earnings before tax were NOK 35 million (20 million). Revenues totalled NOK 2,590 million (1,612 million) and earnings before tax totalled NOK 94 million (86 million) year to date. The acquisition of HMB was completed on 2 January 2019 and is included in the figures for 2019.
The Swedish business showed some improvement in the quarter, especially in building and demolition business. AF Bygg Göteborg had increased activity compared to the same quarter last year, and completed projects contributed to solid profitability for the quarter. AF Bygg Syd had more activity than the same quarter last year, and shows good
profitability. HMB's activities are greatest in Uppsala and Västerås, and the unit produced good results in the 3rd quarter. The unit is growing well. The market for environmental services is good in Sweden too. Activity at AF Härnösand Byggreturer is on a par with the same guarter last year and it has continued to deliver strong results in the 3rd quarter too.
In the Swedish construction market. Kanonaden Entreprenad had a higher level of activity compared to the same quarter last year, but somewhat weaker results. Activity levels for Pålplintar AB are still too low and results are poor. The unit's performance is also affected by costs related to manufacturing defects in the concrete factory.
AF Projektutveckling currently has no projects under production, but several in the development phase.
AF's Swedish property business has a building site inventory (residential units under development) that is estimated to yield 368 (485) residential units. AF's share of this is 233 (343) residential units.
The order backlog for Sweden stood at NOK 3,125 million (1,510 million) as at 30 September 2019.
OPERATING MARGIN (%)
| NOK million | 30 19 | 3Q 18 YTD 3Q 19 YTD 3Q 18 | 2018 | ||
|---|---|---|---|---|---|
| Revenues and income | 186 | 501 | 520 | ||
| Earnings before finacial items and tax (EBIT) | |||||
| Earnings before tax (EBT) | |||||
| Operating profit margin | $-1.2\%$ | $-2.0\%$ | $-1.1\%$ | $1.1\%$ | }.2% |
| Profit margin | $-0.7\%$ | -3.0 % | $-2.4\%$ | በ 6 % | 4.1 % |
NUMBER OF EMPLOYEES
• AF Offshore Decom
• AF AeronMollier
AF has varied activities in the oil and gas industry. The services range from new build and modification of systems for climate control (HVAC) delivered to the offshore and marine market, to the removal and recycling of offshore installations. AF has a state-of-the art facility for environmental clean-up at Vats.
Revenues in the 3rd quarter were NOK 186 million (154 million), which means somewhat higher activity compared to the same quarter last year. Earnings before tax were NOK -1 million (-5 million). Revenues totalled NOK 501 million (520 million) and earnings before tax were NOK -12 million (3 million) year to date.
AF Offshore Decom reported a low level of activity, and the unit delivered weak results for the quarter. The company is working to win more projects, but the market for the removal of offshore installations is marked by strong competition. The unit has several platform construction projects at Vats, but a lower than expected production level has hit profitability for the quarter. Preparatory work is also ongoing for future offshore campaigns in the coming years.
AF AeronMollier has a significantly increased activity level compared to the same quarter last year. The growth comes from projects in modification and maintenance, along with deliveries related to electrification in the marine sector. The unit has delivered positive results both in Offshore and Marine.
The order backlog for Offshore stood at NOK 1,312 million (1,510 million) as at 30 September 2019.
AF Gruppen shall have robust financing with respect to operational and market-related fluctuations. The company's required return on invested capital is 20%, and its financial position shall underpin the growth strategy and provide an adequate dividend capacity.
IFRS 16 Leases, implemented from 1 January 2019, led to total assets increasing by NOK 863 million. Net interestbearing debt increased by NOK 888 million, and equity was reduced (after tax) by NOK 19 million. See Note 4 for more information. Both for existing and new financing, covenants will be calculated exclusive of the effect of IFRS 16.
Net operating cash flow was NOK 182 million (100 million) and net cash flow from investments was NOK-220 million (-15 million) for the 3rd quarter. Cash flow before capital transactions and financing was NOK -38 million (85 million) for the 3rd quarter. Net operating cash flow was NOK 724 million (260 million) and net cash flow from investments was NOK -710 million (-240 million) year to date. Cash flow before capital transactions and financing was NOK 13 million (20 million) year to date.
The AF Gruppen had net interest-bearing debt of NOK 598 million (-680 million) at the end of the 3rd quarter.
In Q2 AF Gruppen signed letters of intent for new financing facilities with DNB and Handelsbanken. The total funding available will be NOK 3 billion when final contracts have been signed. The new agreements will provide for a multicurrency overdraft facility (revolving 1-year term) for NOK 2 billion with DNB and a revolving credit facility (3+1+1 year term) worth NOK 1 billion with Handelsbanken. The final agreement was concluded with Handelsbanken as per 30 September 2019, while the final agreement with DNB is expected to be signed in Q4 2019. The new facilities in DnB will replace existing financing facilities totalling NOK 1.28 billion with Danske Bank and DNB. AF Gruppen's total financing as of 30 September 2019 is NOK 2.28 billion.
Available liquidity at 30 September 2019, including overdraft facilities with Danske Bank, Handelsbanken and DNB, is NOK 2.158 billion.
Total assets were NOK 10,254 million (7,941 million) as at 30 September 2019. The increase in assets is due to increased
| Name | No. Shares | % share |
|---|---|---|
| OBOS BBL | 16,366,733 | 16.3 |
| ØMF Holding AS | 14,969,859 | 14.9 |
| Constructio AS | 13,887,144 | 13.8 |
| Folketrygdfondet | 9,202,566 | 9.2 |
| Artel II AS | 2,508,267 | 2.5 |
| LJM A/S | 2,413,900 | 2.4 |
| Landsforsakringar Fastighetsfond | 2,244,925 | 2.2 |
| VITO Kongsvinger AS | 1,861,676 | 1.9 |
| Arne Skogheim AS | 1,753,870 | 1.7 |
| Staavi, Bjørn | 1,627,000 | 1.6 |
| Ten largest shareholders | 66,835,940 | 66.6 |
| Total other shareholders | 33,454,398 | 33.4 |
| Own shares | 360 | $\Omega$ |
| Total number of shares | 100,290,698 | 100 |
activity, the acquisition of HMB and HTB, in addition to the implementation of IFRS 16 Leases. The Group's equity totalled NOK 2,232 million (2,056 million) as at 30 September 2019. This corresponds to an equity ratio of 21.8% (25.9%).
On 19 August this year, AF Gruppen ASA entered into an agreement with the board of directors of BetonmastHæhre to acquire 100% of the shares in the Betonmast group. The purchase was completed on 31 October 2019 through the newly established Betonmast Holding AS, which is owned 67.4% by AF Gruppen and 32.6% by the management and former shareholders of Betonmast. The total payment for 100% of the shares in the Betonmast group is NOK 2.075 billion. This is equivalent to NOK 140.50 per share. AF Gruppen's share of the payment was financed by a private placement of NOK 400 million and a cash consideration of NOK 1.337 billion. The management and former shareholders of Betonmast funded their part of the purchase by providing NOK 338 million in equity to Betonmast Holding. The Betonmast group has about 1,000 employees and consists of a 16 operating companies in the segments Betonmast Norway, Betonmast Eiendom and Betonmast Sweden. In 2018 the group had sales of NOK 6,942 million and a profit of NOK 217 million. The project portfolio in the Betonmast group covers everything from major residential projects to commercial and public buildings. For more detailed information, see stock exchange announcements from 19 August and 30 September, and Notes 3 and 6.
AF Gruppen's shares are listed on the Oslo Børs OB Match List and trade under the ticker AFG. The share is included in the Oslo Børs All Share Index (OSEAX), Benchmark Index (OSEBX) and Mutual Fund Index (OSEFX), as well as the new Oslo Børs Mid Cap Index (OSEMX).
The closing price for the AF share was NOK 181.00 as at 30 September 2019. This corresponds to a return of 41% to date in 2019, adjusted for a dividend of NOK 5.00 per share distributed in the 2nd quarter. The Oslo Børs Benchmark Index showed a return of 11% for the same period.
In June, 544 employees subscribed to a total of 677,311 shares under the AF Gruppen share programme. The shares were subscribed at a price of NOK 128.80 per share, which corresponds to a discount of 20% in relation to the average market price during the subscription period. The Board of Directors resolved to sell 132.703 treasury shares in this connection. There was a further issue of 544,608 new shares on 12 July 2019.
In connection with the purchase of Betonmast (see Note 3), there was a private placement on 28 October 2019, after the end of the quarter, directed at the four largest shareholders in AF Gruppen: OBOS BBL, ØMF Holding AS, Constructio AS and Folketrygdfondet. The issue was worth NOK 400 million and consisted of 2,284,409 shares with a par value of NOK 0.05 at a subscription price of NOK 175.10. To ensure equal treatment of the company's shareholders, the board will propose that all other shareholders are given the opportunity to subscribe to a proportionately equal number of shares to those who subscribed to the private placement. An extraordinary general meeting has been called for 19 November 2019, where the board of directors will recommend a repair issue of up to 1,925,044 new shares. It is proposed that the repair issue should be at the same subscription price as the private placement, NOK 175.10 per share.
The company's board of directors has been authorised by the general meeting to determine the dividend to be distributed for the 2nd half of the year. A final decision on dividends will be taken after the repair issue. The board intends to approve a dividend of NOK 3.50 (3.50) per share, to be paid to shareholders in December.
HSE has high priority in AF Gruppen and is an integral part of the management at all levels. AF has a structured and uniform HSE system that encompasses all projects. The working environment should be safe for everyone including those who are employed by our subcontractors.
The figures from the subcontractors are therefore included in the injury statistics.
The LTI (lost-time injury) rate is an important measurement parameter for safety work at AF. The LTI rate is defined as the number of injuries resulting in absence and serious personal injuries without absence per million man-hours. A total of 1 (1) injury resulting in absence were registered in the 3rd quarter. This gives an LTI rate of 0.2 (0.3) for the 3rd quarter. To date in 2019 the LTI rate was 0.9 (0.8).
Systematic and long-term work is being carried out to reduce the LTI rate. Significant resources are being invested to further improve our HSE efforts in order to be able to achieve our goal of an LTI rate of zero. Key to this work is AF's fundamental understanding and acceptance that all injuries have a cause and can, therefore, be avoided. Identifying risk and risk analysis are a key part of our preventive activities. Physical and organisational barriers are established to reduce the risk of personal injury.
In spite of a low LTI rate, we are still seeing too many personal injuries at AF. For this reason we have implemented the "Safety boost," comprising the following six group measures: (1) the reporting of LTI is extended to also include serious personal injury without absence, (2) a group goal of LTI-2<5 is established, (3) closer follow-up of incidents with a major loss potential, (4) use of safety gloves and safety goggles becomes mandatory on all projects, (5) introduce Safetalk to strengthen practical risk management, and (6) strengthened learning of incidents through digitalisation. We have belief in that the "Safety boost" will reinforce safety awareness among individuals and further raise the safety culture in the organisation.
Learning from own mistakes is of critical importance. AF has systematised this through reporting and following up undesired incidents, as well as investigating the most serious incidents. The number of reports has increased steadily during the last 14 years, and we see a clear correlation between the increased reporting of undesired incidents and the decrease in injuries.
The registration of sickness absence forms the basis for the measurement of health work at AF. For the 3rd quarter, sickness absence was 3.5% (3.1%), and 3.5% (3.3%) year to date. AF's sickness absence is low compared to that of comparable businesses. Our target is total sickness absence of less than 3.0%, a level we believe represents a healthy without absence due to occupational situation illnesses/injuries. Systematic efforts are being made, which consist, for example, of ongoing risk analysis of exposure that is harmful to health, the establishment of physical and organisational barriers, and close follow-up of employees on sick leave.
AF strives to avoid environmental damage and minimise undesirable effects on the environment. Environmental work is an integral part of HSE work, and the tools used are therefore the same that are used otherwise in connection with HSE work.
Follow-up of the source separation rate parameter acts as an extra driving force for AF's environmental work. This parameter places the focus on an important environmental factor that AF has an opportunity to influence. The source separation rate indicates how much of the waste from AF's operations is separated for the purpose of facilitating recycling. For the 3rd quarter, the result for building was 86% (87%), the result for renovation was 86% (87%) and the result for demolition was 95% (96%). To date in 2019, the source separation rate for building was 87% (85%), for renovation it was 95% (87%) and for demolition it was 95% (95%). These results are considered very good, and they are well above the government requirement of a minimum of 60%. A total of 131,715 (77,603) tonnes of waste has been sorted in the 3rd quarter, and a total of 278,190 (200,128) tonnes has been sorted in 2019. The environmental centres have recycled a total of 265,247 (153,249) tonnes of materials year to date.
With clear growth ambitions and a rapidly increasing order backlog, there is an increasing need for resources. Therefore, the continuous effort to build a uniform corporate culture is more important than ever. Motivated employees and a solid organisation are an important foundation for creating value. AF is experiencing a major influx of competent resources who desire to work for the company, and to date in 2019 the number of employees has increased by 514 persons. At AF we are building the organisation with a robust composition of technical expertise and management capacity at all levels. The resources are organised close to production, with project teams where the managers have a major influential force.
AF aims to be a company to which talented individuals apply, whether they are women or men. In order to attract even more skilled people, AF is also setting new and ambitious targets for the share of women in the company. AF has adopted a "40/20 goal" that entails that at least 40% of all officials in AF shall be women, and that the total share of women shall increase to at least 20%. This is an ambitious goal. It entails that AF will move from being worst in the class to an industry leader. In the 3rd quarter the share of women is 8.9% (8.4%) in total and 19.6% (18.4%) amongst officials.
Within our business areas, AF is also maintaining a sharp focus on innovation and digitalisation. We are working in a structured manner on how new technology can contribute to increased productivity and minimise risk in our projects, contribute to a safer daily life for our employees, and not to mention create greater value for our customers. In addition, we are continuously seeking new business models on the border of or outside of our current core areas. As a stage in the effort, we have established a corporate function for innovation and digitalisation, in addition to a joint venture fund with OBOS (Construct Venture).
AF invests a lot of time and resources in the development of employees through training in various positions in production and through development of the AF Academy. More than 80 per cent of the current managers have been recruited internally. Our employees are good ambassadors for the recruitment of new colleagues.
At the end of the 3rd quarter AF Gruppen had a total of 4,732 (4,161) employees. Of these employees, 3,880 (3,655) were employed in Norway, 804 (464) in Sweden, 40 (27) in Lithuania, 8 (7) in Germany and 0 (8) in China (under discontinuation).
AF Gruppen is exposed to risk of both an operational and financial nature. AF Gruppen wants to assume operational risk that the business units can influence and control. AF has developed risk management processes that are well adapted to our operations. Standardised, action-oriented risk management processes ensure comprehensive and coherent risk management in all parts of the organisation. AF seeks to limit exposure to risk that cannot be influenced. A risk review is conducted for all projects before a tender is submitted. Analysis of risk during the tendering phase enables the correct pricing and management of risk in the project. The same project organisations conduct detailed risk reviews every quarter. The Corporate Management Team will participate in risk reviews of all projects with a contract value in excess of NOK 100 million. In addition, a total of 25 risk reviews in the business units, in which the Corporate Management Team also participated, were conducted in connection with the 3rd quarter of 2019.
Financial risk encompasses market risk, credit risk and liquidity risk. Market risk includes commodity price risk, foreign exchange risk and interest rate risk. AF is exposed to foreign exchange risk, and as a major demolition and recycling operator, AF Gruppen is also exposed to fluctuations in steel prices. AF aims to have low exposure to risks that cannot be influenced, and it uses hedging instruments to mitigate the risk associated with foreign exchange rates and steel prices. AF has credit risk in relation to customers, suppliers and partners. In addition to the parent company and bank guarantees, the use of credit rating tools contributes to reducing risk. The liquidity risk is considered low. AF Gruppen's available liquidity, including credit facilities at NOK 2,280 million, stood at NOK 2,158 million as at 30 September 2019.
The civil engineering market in Norway is good and not very sensitive to cyclical fluctuations, as public sector demand is the strongest driver behind investments in civil engineering in Norway. In the proposal for the 2020 State Budget, NOK 75.4 billion has been allocated to transport, which is an increase of NOK 2.4 billion over the final budget for 2019. NOK 69.3 billion will be used to follow up the National Transport Plan 2018-2029, NOK 37.1 billion of which is earmarked for road building. Prognosesenteret expects a total growth in construction investments of 32% from 2018 to 2021. Almost half of the construction investments in the period are expected to come from road building, while the strongest growth is expected in rail and tramway projects. If we look at the construction market as a whole, we may expect a growth rate of 11% in 2019 and 6% in 2020. However, Prognosesenteret accepts that investment growth could be slightly lower in the period to 2021, in view of political turbulence, the "road toll rebellion" and budgetary constraints. However, high investment estimates for public transport and road building projects, and the planned start-up of many major civil engineering projects,
provide a good basis for further growth in AF's civil engineering activities.
Figures from Eiendom Norge for third quarter 2019 show that the moderate price growth in the Norwegian housing market will continue. There has been a very stable trend in the housing market in most areas of Norway over the last year and a half, and the local differences in price growth are small. At the end of the 3rd quarter, house prices were 2.6% higher than a year ago. For selected cities, the 12-month nominal price change for Oslo was 4.7%, against 1.1% for Bergen. In Stavanger and environs, the 12-month growth figure was negative, at -0.7%. Prognosesenteret expects falling prices in the latter part of 2019 as a result of increased completion rates in 2019, as well as interest rate rises and slightly tighter access to credit. In 2020 and 2021, there should be more positive price growth once more, albeit very moderate. It is expected that future house prices will slow down most in the parts of the country where household debt is highest, typically in cities with a high proportion of young homebuyers.
Prognosesenteret expects a 3.7% increase in the building market for 2019, and 1.2% in 2020. It is expected that a fall of 3.1% in residential production will be compensated for by significant growth in commercial building production of NOK 4.6 billion (6.6%), as well as a total market for renovation, rebuilding and enlargement which is expected to increase by NOK 2.5 billion (1.5%). The strong growth in start-ups in 2016-17 has resulted in increased completion rates from the autumn of 2018 and into 2019 for new homes. Completion rates will only start to decline in 2020. Prognosesenteret expects that commissioning in the period 2019-21 will be around 12% lower than in the previous three-year period. This trend encompasses relatively large regional differences. In 2020, an increase in the number of commissioning permits is expected mainly in Oslo and Buskerud, with the biggest decreases expected in Akershus, Østfold and Hordaland. However, significant growth in new non-residential buildings is expected to produce high activity levels in the building market. Large hospital projects are driving the growth in 2019 and 2020. Private commercial buildings are increasing in 2019, but the forecasts point to a slight decrease in 2020-21. The Norwegian economy is experiencing a moderate upturn driven by increased petroleum investments, although interest rate rises and international unrest have put a brake on growth. Norges Bank decided to keep its key rate unchanged at 1.5% in October. Overall, continued high activity levels are expected for AF's building operations in Norway.
The Energy & Environment business area includes AF's energy services for onshore operations as well as services for demolition and recycling onshore in Norway. In the
Environment business area traditional demolition services and the subsequent receiving, treating and recycling of materials are provided. The level of demolition activity is closely connected to the general level of activity in the building and civil engineering markets. A positive outlook for the civil engineering market in Norway and a good building market is positive for the demand for such services. The authorities in Norway have defined ambitious energy goals related to a reduction in the consumption of energy towards the year 2030. Enova has found that there is a major maintenance backlog for public buildings and major energy efficiency gains to be made from renovating buildings. The delivery of heating and cooling to commercial buildings is another interesting market. Demand here is related to the commissioning of new non-residential buildings where, despite a decline from 2018, we can expect a large number of projects to be commissioned in 2019 before things fall back to a more 'normal' level in 2020 and 2021. Overall, we expect a healthy market for AF's activities in Energy & Environment.
The market for the removal of offshore installations is marked by strong competition and few demolition projects to be carried out in the short term. However, estimates from the British industry organisation Oil & Gas UK show that there are good opportunities for AF's offshore operations in demolition and removal of decommissioned oil installations in the time ahead. In the 2018 to 2027 period it is expected that more than 950,000 tonnes of top deck must be removed in the North Sea. This concerns the British, Norwegian, Danish and Dutch sectors. For AF's offshore activities within climate control (HVAC), as well as maintenance and modifications, the market conditions are still challenging, but growth is expected within some cruise and passenger vessel segments. Electrification of the marine sector also affords interesting opportunities.
Svensk Mäklarstatistik reports growth in housing prices for the 3rd quarter in Sweden. At the end of Q3 prices for apartments are 3% higher than in Q2 2019 and 3% higher than for the same period last year. For detached houses, prices are 1% higher than in the 2nd quarter of 2019 and 2% higher than in the same period last year. The Riksbank is currently keeping the keep rate unchanged at -0.25% and Sveriges Byggindustrier expects interest rates to remain unchanged in the period to December 2020. After several years of high growth, Sveriges Byggindustrier expects a 2% drop in building and civil engineering investments in Sweden in both 2019 and 2020. The largest fall is expected in residential building production. Within new building, production is expected to fall in 2019 and 2020 by 12% and 10% respectively. Both the fall in new building production and increased household saving are contributing a likely
recession in Sweden in 2020. Both factors are partly explained by much tighter borrowing conditions. However, a continued high level of employment and expectations that interest rates will remain low point to a stable underlying demand for housing. Investments in renovation, rebuilding and enlargement are expected to increase slowly both this year and in 2020. Investments in commercial buildings are expected to increase by 3% in 2019 before decreasing by 1% in 2020. Construction investments are expected to grow by 3% in 2019 and 4% in 2020. In 2020, this growth will be driven primarily by increased investments related to new road projects, as well as rail investments. Overall, we see a slightly cautious market for AF's business in Sweden, with stiff competition.
Board of Directors of AF Gruppen ASA
For more detailed information, please contact: CEO Morten Grongstad [email protected] | +47 991 53 905 CFO Sverre Hærem [email protected] | +47 952 45 167 Internet: www.afgruppen.no
| NOK million | 3Q19 | 3Q18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| Revenues and income | 5,069 | 4,536 | 16,146 | 13,111 | 18,767 |
| Subcontractors | $-2,498$ | $-2,512$ | $-7,980$ | $-6,694$ | $-9,771$ |
| Cost of materials | $-853$ | $-617$ | $-3,001$ | $-2,253$ | $-2,843$ |
| Payroll costs | $-1,022$ | $-794$ | $-2,973$ | $-2,424$ | $-3,473$ |
| Operating expenses ex. depreciation and impairment | $-310$ | $-327$ | $-1,092$ | $-986$ | $-1,567$ |
| Net gains (losses) and profit (loss) from associates | 79 | 78 | 192 | 137 | 189 |
| EBITDA | 465 | 364 | 1,293 | 891 | 1,303 |
| Depreciation and impairment of tangible fixed assets | $-122$ | $-48$ | $-348$ | $-133$ | $-182$ |
| Depreciation and impairment of intangible assets | $-1$ | $-2$ | $-2$ | ||
| Earnings before financial items and tax (EBIT) | 343 | 315 | 943 | 756 | 1,119 |
| Net financial items | $-4$ | $-2$ | $-15$ | $\overline{7}$ | 18 |
| Earnings before tax (EBT) | 339 | 313 | 929 | 764 | 1,136 |
| Income tax expense | $-63$ | $-58$ | $-189$ | $-166$ | $-215$ |
| Net income for the period | 276 | 255 | 740 | 598 | 921 |
| Attributable to: | |||||
| Shareholders in the Parent Company | 232 | 219 | 626 | 499 | 772 |
| Minority interests | 44 | 36 | 114 | 99 | 149 |
| Net income for the period | 276 | 255 | 740 | 598 | 921 |
| Earnings per share (NOK kroner) | 2.32 | 2.24 | 6.27 | 5.10 | 7.88 |
| Diluted earnings per share (NOK kroner) | 2.29 | 2.24 | 6.23 | 5.10 | 7.88 |
| Key figures | 3Q19 | 3Q18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
| EBITDA margin | 9.2% | 8.0% | 8.0% | 6.8% | 6.9% |
| Operating profit margin | 6.8% | 7.0% | 5.8% | 5.8% | 6.0% |
| Profit margin | 6.7% | 6.9% | 5.8% | 5.8% | 6.1% |
| Return on capital employed (ROaCE) 1) | $\overline{\phantom{a}}$ | 42.9% | 51.3% | 53.9% | |
| Return on equity | 49.9% | 43.2% | 45.4% | ||
| Equity ratio | 21.8% | 25.8% | 21.8% | 25.9% | 25.0% |
| Net interest-bearing receivables (debt) 2) | $-598$ | 680 | $-598$ | 680 | 894 |
| Capital employed 3) | 3,482 | 2,162 | 3,482 | 2,162 | 2,223 |
| Order backlog | 23,000 | 18,920 | 23,000 | 18,920 | 21,541 |
1) Return on capital employed (ROaCE) = Earnings before tax + interest expense / average capital employed
2) Net interest-bearing receivables (debt) = Cash and cash equivalents + interest-bearing receivables - interes
3) Capital employed = Equity + interest-bearing debt
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| Net income for the period | 276 | 255 | 740 | 598 | 921 |
| Net actuarial gains and losses | $-1$ | ||||
| Currency translation differences minority | -9 | $-13$ | $-3$ | ||
| Items that will not be reclassified to income statement | -9 | $-13$ | $-3$ | $-2$ | |
| Net cash flow hedges | $-14$ | 5 | $-4$ | 15 | $-17$ |
| Currency translation differences majority | 2 | 4 | $-34$ | $-43$ | $-13$ |
| Items that may be reclassified to income statement in | $-12$ | 10 | $-38$ | $-28$ | $-30$ |
| Other comprehensive income for the period | $-21$ | 10 | $-52$ | $-31$ | $-32$ |
| Total comprehensive income for the period | 255 | 265 | 688 | 567 | 890 |
| Attributable to: | $\overline{\phantom{a}}$ | ||||
| -Shareholders of the parent | 220 | 228 | 588 | 471 | 741 |
| - Minority | 35 | 37 | 101 | 96 | 149 |
| Total comprehensive income for the period | 255 | 265 | 688 | 567 | 890 |
| Actuarial | Attributable | |||||||
|---|---|---|---|---|---|---|---|---|
| Paid-in Translation | pension Cash flow | Retained | to share- | Total | ||||
| NOK million | capital differences gain/ (loss) | hedge | earnings | holders Minority | equity | |||
| As at 31 December 2017 | 482 | 32 | $-14$ | $-15$ | 1,209 | 1,693 | 384 | 2,078 |
| Effect of IFRS 15 | $\overline{\phantom{a}}$ | 16 | 16 | 16 | ||||
| As at 31 December 2019 | 482 | 32 | $-14$ | $-15$ | 1,225 | 1,709 | 384 | 2,094 |
| Comprehensive income | $\blacksquare$ | $-43$ | $\blacksquare$ | 15 | 499 | 471 | 96 | 567 |
| Purchase of treasury shares | $\overline{\phantom{a}}$ | $\overline{a}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $-7$ | $-7$ | $-7$ | |
| Sale of treasury shares | $\blacksquare$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | 8 | 8 | 8 | ||
| Dividend paid | $-122$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $-367$ | $-489$ | $-111$ | $-600$ |
| Share-based remuneration | 11 | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\blacksquare$ | 11 | 1 | 12 |
| Put options for minority | $\blacksquare$ | $\blacksquare$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $-3$ | $-3$ | $-3$ | |
| Transactions with minority | $\overline{\phantom{a}}$ | $-13$ | $-13$ | $-2$ | $-15$ | |||
| As at 30 September 2018 | 372 | $-11$ | $-14$ | $\overline{\phantom{a}}$ | 1,342 | 1,688 | 368 | 2,056 |
| As at 31 December 2018 | 256 | 20 | $-16$ | $-33$ | 1,519 | 1,746 | 378 | 2,124 |
| Effect of IFRS 16 | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $-19$ | $-19$ | $-19$ | ||
| As at 1 January 2018 | 256 | 20 | $-16$ | $-33$ | 1,500 | 1,727 | 378 | 2,104 |
| Comprehensive income | $-34$ | $\overline{a}$ | $-4$ | 626 | 588 | 101 | 688 | |
| Capital increase | 166 | $\overline{a}$ | $\blacksquare$ | $\overline{\phantom{a}}$ | 166 | 166 | ||
| Purchase of treasury shares | $\blacksquare$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $-3$ | $-3$ | $-3$ | |
| Sale of treasury shares | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | 35 | 35 | 35 | |
| Dividend paid | $\blacksquare$ | $-498$ | $-498$ | $-136$ | $-634$ | |||
| Share-based remuneration | 29 | $\overline{\phantom{0}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{0}}$ | 29 | $\blacksquare$ | 29 | |
| Addition of minority by aqusitions | $\overline{\phantom{a}}$ | $\overline{a}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | 40 | 40 | |
| Transactions with minority | $-213$ | $-213$ | 18 | $-195$ | ||||
| As at 30 September 2019 | 451 | $-14$ | $-16$ | $-37$ | 1,448 | 1,832 | 400 | 2,232 |
| NOK million | 30.09.19 | 30.09.18 | 31.12.18 |
|---|---|---|---|
| Tangible fixed assets | 2,328 | 1,295 | 1,356 |
| Intangible assets | 2,612 | 2,164 | 2,288 |
| Investment in associates and joint ventures | 554 | 420 | 361 |
| Deferred tax asset | 4 | 20 | 19 |
| Interest-bearing receivables | 377 | 279 | 305 |
| Pension plan and other financial assets | 7 | 6 | 8 |
| Total non-current assets | 5,882 | 4,183 | 4,337 |
| Inventories | 222 | 202 | 184 |
| Projects for own account | 96 | 16 | 38 |
| Trade receivables and other receivables | 3,779 | 3,030 | 3,238 |
| Interest-bearing receivables | 89 | 15 | 32 |
| Derivatives | $\mathbf{1}$ | $\overline{2}$ | $\overline{1}$ |
| Cash and cash equivalents | 186 | 493 | 656 |
| Total current assets | 4,373 | 3,758 | 4,149 |
| Total assets | 10,254 | 7,941 | 8,486 |
| Equity attributable to shareholders of the parent | 1,831 | 1,688 | 1,746 |
| Minority interests | 401 | 368 | 378 |
| Total equity | 2,232 | 2,056 | 2,124 |
| Non-current interest-bearing debt | 817 | 89 | 91 |
| Retirement benefit obligations | 1 | $\mathbf{1}$ | $\overline{1}$ |
| Provisions | 191 | 192 | 150 |
| Deferred tax | 360 | 308 | 418 |
| Derivatives | 63 | 15 | 43 |
| Total non-current liabilities | 1,432 | 605 | 704 |
| Current interest-bearing debt | 433 | 18 | 8 |
| Trade payables and other short-term debt | 5,599 | 4,770 | 5,281 |
| Derivatives | 12 | 6 | 10 |
| Provisions | 280 | 236 | 223 |
| Tax payable | 267 | 251 | 138 |
| Total current liabilities | 6,590 | 5,281 | 5,659 |
| Total liabilities | 8,022 | 5,886 | 6,363 |
| Total equity and liabilities | 10,254 | 7,941 | 8,486 |
| 3Q19 | 3Q18 | YTD 3Q 19 | YTD 30 18 | 2018 |
|---|---|---|---|---|
| 343 | 315 | 943 | 756 | 1,119 |
| 122 | 49 | 349 | 134 | 184 |
| $-203$ | $-188$ | $-319$ | $-460$ | $-178$ |
| $-23$ | $-2$ | $-87$ | $-46$ | $-123$ |
| $-57$ | $-74$ | $-163$ | $-125$ | $-161$ |
| 182 | 100 | 724 | 260 | 841 |
| $-220$ | $-15$ | $-710$ | $-240$ | $-255$ |
| $-38$ | 85 | 13 | 20 | 586 |
| 70 | 70 | 87 | ||
| - | $-498$ | $-489$ | $-836$ | |
| $-6$ | $-254$ | $-111$ | $-234$ | |
| 24 | 33 | $-10$ | ||
| $-221$ | 50 | 200 | $-14$ | $-24$ |
| $-14$ | $-3$ | $-32$ | $-10$ | $-13$ |
| $-141$ | 40 | $-481$ | $-624$ | $-1,030$ |
| $-179$ | 125 | $-468$ | $-604$ | $-444$ |
| 370 | 368 | 656 | 1,098 | 1,098 |
| $-5$ | $-1$ | $-2$ | -1 | $\mathbf{1}$ |
| 186 | 493 | 186 | 493 | 655 |
AF Gruppen's division into operating segments is consistent with the division of the business areas: Civil Engineering, Building, Property, Energy and Environment, Sweden and Offshore.
The Energy and Environment business areas merged as of 1 January 2019. The comparable figures for the business areas have been restated.
Segment information is presented in accordance with the AF Gruppen's accounting policies in accordance with IFRS with the exception of the principles for revenue recognition for residential property development in accordance with IFRS 15. This policy exception applies to the Building and Property segments and Sweden. Revenue from projects for own account in these segments is not recognised upon handover as regulated in IFRS 15, but in accordance with the degree of completion method. This means that the recognition of revenue in these projects is the product of the degree of completion, sales ratio and expected contribution margin.
Segment information is presented in accordance with reporting to the Corporate Management Team and is consistent with the financial information utilised by the Company's senior decision-makers when evaluating developments and allocating resources. The effect of the deviant application of principles on the consolidated accounts is illustrated in a separate table in the segment information. Additional information on projects for own account is provided in Note 7.
| NOK million | 3Q 19 | 3Q 18 | YTD 30 19 | YTD 30 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 1,283 | 1,469 | 4,613 | 4,183 | 5,821 |
| Internal revenue and income | 24 | 17 | 57 | 29 | 40 |
| Total revenue and income | 1,307 | 1,485 | 4,670 | 4,212 | 5,861 |
| EBITDA | 122 | 73 | 371 | 213 | 340 |
| Earnings before financial items and tax (EBIT) | 75 | 57 | 236 | 164 | 275 |
| Earnings before tax (EBT) | 75 | 60 | 238 | 180 | 293 |
| EBITDA-margin | 9.4% | 4.9% | 7.9% | 5.1% | 5.8% |
| Operating margin | 5.8% | 3.8% | 5.1% | 3.9% | 4.7% |
| Profit margin | 5.7% | 4.0% | 5.1% | 4.3% | 5.0% |
| Assets | 2,136 | 1,853 | 2,136 | 1,853 | 2,014 |
| Order backlog | 6,018 | 4,619 | 6,018 | 4,619 | 7.664 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 2,528 | 2,116 | 7,745 | 6,134 | 8,945 |
| Internal revenue and income | 21 | 34 | 48 | 82 | 110 |
| Total revenue and income | 2,549 | 2,150 | 7,793 | 6,216 | 9,055 |
| EBITDA | 187 | 169 | 525 | 420 | 666 |
| Earnings before financial items and tax (EBIT) | 162 | 158 | 454 | 388 | 619 |
| Earnings before tax (EBT) | 161 | 162 | 462 | 404 | 645 |
| EBITDA-margin | 7.3% | 7.9% | 6.7% | 6.8% | 7.4 % |
| Operating margin | 6.3% | 7.3 % | 5.8% | 6.2% | 6.8% |
| Profit margin | 6.3% | 7.6 % | 5.9% | 6.5% | 7.1% |
| Assets | 5,264 | 4,775 | 5,264 | 4,775 | 5,128 |
| Order backlog | 11,529 | 10,273 | 11,529 | 10,273 | 9,871 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 4 | 11 | 11 | 64 | 73 |
| Internal revenue and income | $\overline{\phantom{0}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | ||
| Total revenue and income | 4 | 11 | 11 | 64 | 73 |
| EBITDA | 27 | 84 | 88 | 145 | 169 |
| Earnings before financial items and tax (EBIT) | 27 | 82 | 88 | 143 | 166 |
| Earnings before tax (EBT) | 26 | 79 | 84 | 134 | 157 |
| EBITDA-margin | $\overline{\phantom{a}}$ | ||||
| Operating margin | $\overline{\phantom{0}}$ | ||||
| Profit margin | $\overline{\phantom{0}}$ | $\overline{\phantom{0}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | $\overline{\phantom{0}}$ |
| Assets | 1001 | 872 | 1001 | 872 | 885 |
| Order backlog | $\,$ | $\blacksquare$ |
| NOK million | 3Q19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 227 | 196 | 681 | 602 | 815 |
| Internal revenue and income | 40 | 14 | 92 | 41 | 60 |
| Total revenue and income | 267 | 210 | 773 | 644 | 875 |
| EBITDA | 31 | 15 | 77 | 41 | 61 |
| Earnings before financial items and tax (EBIT) | 19 | 11 | 43 | 28 | 44 |
| Earnings before tax (EBT) | 19 | 10 | 41 | 24 | 41 |
| EBITDA-margin | 11.5% | 7.1% | 10.0% | 6.4% | 7.0% |
| Operating margin | 7.0% | 5.1 % | 5.6 % | 4.4 % | 5.0% |
| Profit margin | 7.1% | 4.6 % | 5.3% | 3.8% | 4.7% |
| Assets | 612 | 416 | 612 | 416 | 490 |
| Order backlog | 510 | 456 | 510 | 456 | 501 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 826 | 474 | 2,589 | 1,610 | 2,268 |
| Internal revenue and income | $\overline{\phantom{a}}$ | 2 | |||
| Total revenue and income | 827 | 475 | 2,590 | 1,612 | 2,270 |
| EBITDA | 50 | 24 | 135 | 100 | 131 |
| Earnings before financial items and tax (EBIT) | 36 | 20 | 97 | 87 | 114 |
| Earnings before tax (EBT) | 35 | 20 | 94 | 86 | 113 |
| EBITDA-margin | 6.1% | 5.1% | 5.2% | 6.2% | 5.8% |
| Operating margin | 4.4 % | 4.2% | 3.7% | 5.4% | 5.0% |
| Profit margin | 4.3% | 4.1 % | 3.6% | 5.3% | 5.0% |
| Assets | 1,634 | 1,228 | 1,634 | 1,228 | 1,332 |
| Order backlog | 3,125 | 1,510 | 3,125 | 1,510 | 1,578 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 186 | 153 | 499 | 518 | 652 |
| Internal revenue and income | $\overline{2}$ | $\overline{2}$ | 3 | ||
| Total revenue and income | 186 | 154 | 501 | 520 | 655 |
| EBITDA | 5 | $\overline{2}$ | 15 | 18 | $-6$ |
| Earnings before financial items and tax (EBIT) | $-2$ | $-3$ | -6 | 6 | $-21$ |
| Earnings before tax (EBT) | $-1$ | -5 | $-12$ | 3 | $-27$ |
| EBITDA-margin | 2.6 % | 1.1% | 3.1% | 3.4% | $-0.9%$ |
| Operating margin | $-1.2%$ | $-2.0%$ | $-1.1%$ | 1.1% | $-3.2%$ |
| Profit margin | $-0.7%$ | $-3.0%$ | $-2.4%$ | $0.6\%$ | $-4.1%$ |
| Assets | 1,162 | 1,312 | 1,162 | 1,312 | 1,332 |
| Order backlog | 1,312 | 1,510 | 1,312 | 1,510 | 1,456 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 14 | 6 | 39 | ||
| Internal revenue and income | 10 | 26 | 20 | 27 | |
| Total revenue and income | 24 | 13 | 64 | 37 | 44 |
| EBITDA | 8 | 35 | $-18$ | $-28$ | |
| Earnings before financial items and tax (EBIT) | $-9$ | $-7$ | $-15$ | $-32$ | $-48$ |
| Earnings before tax (EBT) | $-11$ | $-10$ | $-24$ | -40 | $-54$ |
| Assets | 1.017 | 1,967 | 1,017 | 1.967 | 2,873 |
| Order backlog |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 30 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | -50 | 129 | $-154$ | 59 | 69 |
| Internal revenue and income | -95 | $-73$ | $-225$ | $-176$ | $-242$ |
| Total revenue and income | $-145$ | 56 | $-379$ | $-118$ | $-173$ |
| EBITDA | -4 | 14 | Ջ | ||
| Earnings before financial items and tax (EBIT) | $-4$ | 14 | $-7$ | я | |
| Earnings before tax (EBT) | -4 | 14 | $-7$ | ጸ | |
| Assets | $-2.491$ | $-4.353$ | $-2.491$ | $-4.353$ | -5,420 |
| Order backlog | 242 | 94 | 242 | 94 | 94 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 50 | $-18$ | 124 | -76 | 107 |
| Internal revenue and income | $\overline{\phantom{0}}$ | ||||
| Total revenue and income | 50 | $-18$ | 124 | -76 | 107 |
| EBITDA | 39 | $-17$ | 54 | $-35$ | $-42$ |
| Earnings before financial items and tax (EBIT) | 39 | $-17$ | 54 | $-35$ | $-42$ |
| Earnings before tax (EBT) | 39 | $-17$ | 54 | $-35$ | $-42$ |
| Assets | $-81$ | $-129$ | $-81$ | $-129$ | $-147$ |
| Order backlog | 264 | 457 | 264 | 457 | 378 |
| NOK million | 3Q 19 | 3Q 18 | YTD 3Q 19 | YTD 3Q 18 | 2018 |
|---|---|---|---|---|---|
| External revenue and income | 5,069 | 4,536 | 16,146 | 13,111 | 18,767 |
| Internal revenue and income | $\overline{\phantom{0}}$ | $\overline{\phantom{0}}$ | |||
| Total revenue and income | 5,069 | 4,536 | 16,146 | 13,111 | 18,767 |
| EBITDA | 465 | 364 | 1,293 | 891 | 1,303 |
| Earnings before financial items and tax (EBIT) | 343 | 315 | 943 | 756 | 1,119 |
| Earnings before tax (EBT) | 339 | 313 | 929 | 764 | 1,136 |
| EBITDA-margin | 9.2% | $8.0\%$ | 8.0% | 6.8% | 6.9% |
| Operating margin | 6.8% | 7.0% | 5.8% | 5.8% | 6.0% |
| Profit margin | 6.7% | 6.9% | 5.8% | 5.8% | 6.1% |
| Assets | 10,254 | 7,941 | 10,254 | 7,941 | 8,486 |
| Order backlog | 23,000 | 18,920 | 23,000 | 18,920 | 21,541 |
AF Gruppen is one of Norway's leading contracting and industrial groups. AF Gruppen is divided into six business areas: Civil Engineering, Building, Property, Energy and Environment, Sweden and Offshore.
AF Gruppen ASA is a public limited company registered and domiciled in Norway. The head office is located at Innspurten 15,0663 Oslo. AF is listed on the Oslo Børs OB Match List under the ticker symbol AFG.
This summary of financial information for the 3rd quarter 2019 has not been audited.
The consolidated accounts for AF Gruppen encompass AF Gruppen ASA and its subsidiaries, joint ventures and associated companies. The consolidated financial statements for the 3rd quarter 2019 have been prepared in accordance with IAS 34 Interim Accounts. The summary of the financial information presented in the quarterly accounts is intended to be read in conjunction with the annual report for 2018, which has been prepared in accordance with the International Financial Reporting Standards (IFRS).
As a result of rounding off, the numbers or percentages will not always add up to the total.
The Energy and Environment business areas merged into a single business area, Energy & Environment, as of 1 January 2019. The new business area consists of the business units AF Decom and AF Energi & Miljøteknikk.
The comparable figures for the business areas have been similarly restated.
On 31 October 2019, AF Gruppen and the management of Betonmast completed the purchase of Betonmast AS. The purchase, made through the newly established Betonmast Holding AS, was first reported to Oslo Børs on 19 August 2019. AF Gruppen owns 67.4% of the shares in Betonmast Holding AS and the management and former shareholders of Betonmast owns 32.6%. The total consideration for 100% of the shares in the Betonmast group is NOK 2,075 million. This is equivalent to NOK 140.50 per share.
AF Gruppen's share of the payment was financed by a cash consideration of NOK 400 million and a private placement of NOK 1,337 million. The private placement was issued on 28 October 2019 and was directed at AF Gruppen's four largest shareholders: OBOS BBL, ØMF Holding AS, Constructio AS and Folketrygdfondet. The management and former shareholders of Betonmast funded their part of the purchase by providing NOK 338 million in equity to Betonmast Holding.
The acquisition analysis is based on the agreed purchase price and reported unaudited income statement and balance sheet figures for Betonmast at 30 June 2019. The acquisition analysis is provisional. Allocation of the purchase price was prepared using the acquisition method as defined in IFRS 3 'Business Combinations'. The purchase price has been allocated at the assumed fair value of the identified assets and liabilities of the Betonmast group. In excess of goodwill, no significant differences above or below book values were identified.
| Purchase price allocation Betonmast | NOK million |
|---|---|
| Share issue | 400 |
| Cash consideration | 1,337 |
| Fair value of non-controlling interests in Betonmast Holding AS | 338 |
| Gross consideration for 100% of the shares in Betonmast AS | 2,075 |
| Total equity in Betonmast as at 30 June 2019 | 450 |
| - hereof goodwill in Betonmast | -83 |
| Total equity in Betonmast as at 30 June 2019 exscl. goodwill | 367 |
| Goodwill | 1,708 |
| Cash consideration for 67.4% of the shares in Betonmast AS | 1,337 |
| - Cash and Cash equivalents in Betonmast as at 30 June 2019 | $-1,219$ |
| Net consideration | 118 |
The acquisition is estimated to result in goodwill of NOK 1708 million, which is linked to the geographical market position and the organisation's ability to operate profitably. None of the goodwill will be tax deductible. The allocation is not final.
AF Gruppen Sverige AB, a subsidiary of AF Gruppen, completed the agreement to acquire 70% of the shares in HMB Holding AB (HMB) on 2 January 2019. The remaining 30% of the shares will remain in the ownership of key individuals in the company. Sellers of shares in HMB Holding AB are 13 HMB employees through their respective investment companies. All sellers will continue both as employees of HMB and as owners of HMB Holding AB.
HMB is a successful contracting company, established in 1994 with roots in Dalarna in Sverige. HMB builds commercial, residential and public buildings, and under every form of contract in the market. HMB has operations in Stockholm/Mälardalen and in Dalarna, Västmanland, Uppland and Gästrikland. All of the owners are active in the company. HMB will become a subsidiary of AF Gruppen Sverige AB, where AF Gruppen's swedish operations are organised. The acquisition will strengthen AF Gruppen's position in the Swedish building and civil engineering market, and is an important step in AF Gruppen's ambition to grow in Sweden. During the period from 2015 to 2018, HMB reported average revenues of NOK 1 120 million and an operating margin of 6.1%. On a 100% basis, the agreed enterprise value for HMB was SEK 600 million and the estimated value of the shares was SEK 614 million. Settlement for the shares AF acquired consisted of 736 911 shares in AF Gruppen ASA at a price of NOK 130.50 per share, which corresponds to SEK 99 million and SEK 286 million in cash. In addition, contingent consideration of an estimated SEK 44 million has been agreed, which will be settled in 2021.
In addition to the transaction described above, AF Gruppen Sverige AB has also acquired 3.4% of the shares in HMB Construction AB, a 92% owned subsidiary of HMB Holding AB. The sellers of the shares in HMB Construction AB are 69 employees of HMB Construction AB, and they will all continue as owners and employees after the transaction.
Presented below is an allocation of the purchase price based on the estimated opening balance sheet of HMB as at 2 January 2019. Allocation of the purchase price was prepared using the acquisition method as regulated in IFRS 3. The purchase price has been allocated at the fair value of the assets and liabilities of HMB. The allocation is not final.
| Purchase price allocation HMB | SEK million |
|---|---|
| Cash consideration | 286 |
| Value of issued shares | 99 |
| Contingent consideration | 44 |
| Consideration 70% of the the shares | 430 |
| Minority interests (30% of assets and liabilities) | 36 |
| Gross consideration HMB Holding AB | 465 |
| Cash consideration 3.4% of the shares in HMB Construction AB | 20 |
| Minority interests in HMB Construction AB (4.5%) | 6 |
| Gross consideration | 491 |
| Property, plant and equipment and intangible assets | 87 |
| Financial assets | 6 |
| Cash and cash equivalents | 79 |
| Short-term non-interest-bearing receivables | 191 |
| Short-term interest-bearing receivables | 29 |
| Deferred tax and tax payables | $-23$ |
| Current interest-bearing liabilities | $-17$ |
| Trade payables and current non-interest-bearing liabilities | $-222$ |
| Net identifiable assets and liabilities | 129 |
| Goodwill | 362 |
| Cash consideration 70% of the the shares | 286 |
| Cash consideration 3.4% of the shares in HMB Construction AB | 20 |
| - Cash and Cash equivalents in HMB (100%) | $-79$ |
| Net consideration | 228 |
The acquisition has resulted in goodwill of NOK 362 million, which is linked to the geographical market position and the organisation's ability to operate profitably. None of the goodwill will be tax deductible.
At the time acquisition, the minority interests represented NOK 41 million and have been calculated as the non-controlling owners' share of the net fair value of identifiable assets and liabilities on the date of the acquisition. Goodwill is only recognised for the portion of the shares that AF acquired.
The accounting policies applied to the accounts are consistent with those described in the annual report for 2018 except for the policies relating to leases.
AF Gruppen has implemented IFRS 16 Leases from 1 January 2019 based on the modified retrospective method, which entails that the accumulated effect of the transition will be recognised in other reserves. The comparison figures will not be restated.
The new standard replaced IAS 17 Leases. In IFRS 16 the distinction made between operating and financial leases is eliminated, and practically all leases are to be recognised on the balance sheet of the lessee. Exceptions are only made for the leases with a duration of less than 12 months and leases where the underlying asset is of low value. It is optional for the lessee to make use of these exceptions. AF Gruppen has chosen not to recognise leases of a short duration on the balance sheet. These leases will still be accounted for in the same manner as before.
The present value of the future lease liability is recognised as an interest-bearing loan and the value of the lease (right of use) is to be recognised as a non-current asset. The balance sheet total is increased upon transition to the new standard, and the most important key figures, such as the equity ratio and net interest-bearing liabilities, will change accordingly.
The right of use recognised on the balance sheet will be amortised over the agreed term of the lease, and interest on the lease liability will be recognised as an interest expense. These income statement items will replace rental expenses, which were recognised under other operating expenses in accordance with IAS 17. This has led to an increase in the company's operating profit and EBITDA in comparison to the former standard. The cost recognition will be more degressive because the interest element will be higher at the start of the term of the lease.
Both instalments and interest on lease obligations recognised on the balance sheet are classified as financing activities in the cash flow statement.
AF Gruppen has many operating leases that are recognised on the balance sheet upon the implementation of IFRS 16, primarily related to the leasing of office space, construction equipment and means of transport. In contracts containing options, an assessment has been made of whether the option is reasonably certain to be exercised for each individual contract.
At the time of implementation, the lease liability for all the contracts are calculated based on the discounted future cash flows. The right of use asset has been set at the same value for all the contracts with one exception. For this contract, the right of use has been calculated based on the original start date for the contract, with subsequent depreciation. The difference between the calculated lease liability and right of use for this contract is recognised in equity at the time of implementation. As at 1 January 2019, the Group has recognised a present value of future lease liabilities of NOK 888 million, a right of use of NOK 863 million, a deferred asset of NOK 5 million and an equity effect (after tax) of NOK 19 million. The liability has been calculated with a discount rate corresponding to the company's marginal borrowing rate. The weighted average interest rate used for discounting the lease obligation as at 1 January 2019, was 2.3% p.a.
Reconciliation of operational lease liabilities closing balance 31 December 2018 to opening balance as at 1 January 2019
| NOK million | |
|---|---|
| Minimum lease payments as operating leases as at 31 December 2018 | |
| Short-term leases exempted from recognition | -51 |
| Effect from discounting | $-74$ |
| Liabilities recognised based on the initial application of IFRS 16 as at 1 January 2019 | 888 |
| Liabilities from finance leases as at 31 December 2018 | 67 |
| Liabilities from leases as of 1 January 2019 | 955 |
| Effect of | |||
|---|---|---|---|
| NOK million | 31/12/18 | IFRS 16 | 01/01/19 |
| Tangible fixed assets | 1,356 | 863 | 2,219 |
| Total assets | 8,486 | 863 | 9,349 |
| Total equity | 2,124 | $-19$ | 2,105 |
| Non-current interest-bearing debt | 91 | 651 | 742 |
| Deferred tax | 418 | $-5$ | 412 |
| Current interest-bearing debt | 8 | 237 | 245 |
| Total equity and liabilities | 8,486 | 863 | 9,349 |
| Equity ratio | 25.0% | n.a. | 22.5 % |
| Gross interest-bearing debt | 99 | 888 | 987 |
As at year to date the implementation of the standard has resulted in a positive effect on EBITDA and the operating profit of NOK 211 million and NOK12 million respectively. Earnings before tax and earnings after tax are affected negatively by respectively NOK 4 million and NOK 3 million by the standard. As at 30 September 2019 the balance sheet total has increased by NOK 853 million. Interest-bearing liabilities have increased by NOK 881 million and equity has been reduced by NOK 22 million.
| NOK million | 30 19 less IFRS 16 |
Effect of IFRS 16 |
3Q19 | 30.09.19 less IFRS 16 |
Effect of IFRS 16 |
30.09.19 |
|---|---|---|---|---|---|---|
| Operating expenses excl. depr. and impairment | $-385$ | 75 | $-310$ | $-1,303$ | 211 | $-1,092$ |
| EBITDA | 391 | 75 | 465 | 1,082 | 211 | 1,293 |
| Depr. and impairment of tangible fixed assets | $-51$ | $-70$ | $-122$ | $-149$ | $-199$ | -348 |
| Earnings before financial items and tax (EBIT) | 340 | 4 | 343 | 932 | 12 | 944 |
| Net financial items | $\mathcal{P}$ | $-5$ | -4 | $-16$ | $-15$ | |
| Earnings before tax (EBT) | 341 | $-1$ | 340 | 933 | -4 | 929 |
| Income tax expense | $-63$ | $-63$ | $-190$ | $-189$ | ||
| Net income for the period | 278 | $-1$ | 277 | 744 | $-3$ | 741 |
| 30.09.19 | Effect of | ||
|---|---|---|---|
| NOK million | less IFRS 16 | IFRS 16 | 30.09.19 |
| Tangible fixed assets | 1,475 | 853 | 2,328 |
| Total assets | 9,402 | 853 | 10,254 |
| Total equity | 2,255 | $-22$ | 2,232 |
| Non-current interest-bearing debt | 210 | 607 | 817 |
| Deferred tax | 366 | $-6$ | 360 |
| Current interest-bearing debt | 159 | 274 | 433 |
| Total equity and liabilities | 9,402 | 853 | 10,254 |
| Equity ratio | 24.0% | 21.8% | |
| Gross interest-bearing debt | 369 | 881 | 1,250 |
The preparation of the interim accounts requires the use of assessments, estimates and assumptions that have an effect on the application of accounting principles and recognised figures related to assets and commitments, revenues and costs. The estimates are based on the management's best judgement and experience, and there is some uncertainty related to the concurrence of these estimates with the actual result. Estimates and their underlying assumptions are assessed on a continuous basis. Changes in accounting estimates are recognised for the period in which the estimate is changed and for future periods if these are affected by the change in estimate.
The Group's related parties consist of associates, joint arrangements, the Company's shareholders, members of the Board of Directors and Corporate Management Team. All business transactions with related parties are carried out in accordance with the arm's length principle.
In connection with the purchase of Betonmast (see Note 3 - Changes in the Group's structure), there was a private placement on 28 October 2019, after the end of the quarter, directed at the four largest shareholders in AF Gruppen: OBOS BBL, ØMF Holding AS, Constructio AS and Folketrygdfondet. The issue was worth NOK 400 million and consisted of 2,284,409 shares with a par value of NOK 0.05 at a subscription price of NOK 175.10. To ensure equal treatment of the company's shareholders, the board will propose that all other shareholders are given the opportunity to subscribe to a proportionately equal number of shares to those who subscribed to the private placement. An extraordinary general meeting has been called for 19 November 2019, where the board of directors will recommend a repair issue of up to 1,925,044 new shares. It is proposed that the repair issue should be at the same subscription price as the private placement, NOK 175.10 per share.
The segment information is presented in accordance with the Group's accounting policies in accordance with IFRS with the exception of the principles for revenue recognition for residential property development in accordance with IFRS 15. This policy exception applies to the Building and Property segments and Sweden. Revenue from projects for own account in these segments is not recognised upon handover as regulated in IFRS 15, but in accordance with the percentage of completion method. This means that revenue and cost for these projects is recognized in proportion with the stage of completion and the sales ratio for the project. The effect of this on the consolidated accounts is illustrated in a separate table in the segment information.
The effect for the year of the deviant application of principles in the segment accounts with respect to earnings before tax is NOK 39 million (-17 million) for the 3rd quarter 2019 and NOK 54 million (-35 million) year to date. The effect on equity was NOK -93 million (-123 million), and the accumulated reversed revenues were NOK 264 million (457 million) as at 30 September 2019.
The table below shows residential housing projects for our own account that are in the production phase. Contractor values have been included in those cases where group companies are the contractor.
| Number of housing units | Construction period | ||||||
|---|---|---|---|---|---|---|---|
| Property projects for own account | AF's construction value 1 |
number | Hereof Total transferred completed in 2019 |
Hereof unsold |
Start up | Completion | Ownership share AF |
| Thurmannskogen H/J/K, Lørenskog | 139 | 75 | 74 | O 2 2017 | O1 2019 | 33% | |
| Lillo Gård Haugen, Nydalen | 563 | 174 | 151 | 23 | Q1 2017 | Q2/Q3 2019 | 25% |
| Lillo Gård Lunden A/B/C/D, Nydalen | 630 | 107 | 106 | 1 | Q1 2017 | Q1/Q2/Q3 | 25% |
| Krydderhagen D1/D2/D3/D4, Hasle | 355 | 143 | 128 | 15 | Q2 2017 | Q2 2019 | 50% |
| Total completed in 2019 | 1,687 | 499 | 459 | 40 | |||
| Thurmannskogen C/R, Lørenskog | 67 | 11 | O 2 2018 | Q2/Q4 2019 | 33% | ||
| Lillo Gård Lunden E/F/G, Nydalen | 600 | 135 | $\overline{\phantom{a}}$ | $\sim$ | Q1 2017 | Q3/Q4 2020 | 25% |
| Nye Kilen Brygge A1/A2 og C1/C2, Sandefjord | 224 | 100 | $\overline{\phantom{a}}$ | Q1 2018 | Q1 2020 | 50% | |
| Nye Kilen Brygge 4B/4C3, Sandefjord | 69 | 35 | $\sim$ | Q2 2019 | Q3 2020 | 50% | |
| Skiparviken, Bergen | 324 | 129 | $\overline{\phantom{a}}$ | Q2 2018 | Q2 2021 | 50% | |
| Lilleby Triangel Byggetrinn 1, Trondheim | 97 | $\overline{\phantom{a}}$ | Q1 2019 | Q2 2020 | 33% | ||
| Lilleby Triangel Byggetrinn 2, Trondheim | 29 | $\blacksquare$ | $\blacksquare$ | Q1 2020 | Q2 2021 | 33% | |
| Lilleby Triangel Byggetrinn 3, Trondheim | $\overline{\phantom{a}}$ | 21 | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | Q1 2021 | Q2 2022 | 33% |
| Bo på Billingstad, Asker | $\blacksquare$ | 88 | $\blacksquare$ | $\blacksquare$ | Q2 2019 | Q1 2021 | 33% |
| Total in production - Property segment | 1,284 | 645 | - | ||||
| Stronde Byggetrinn I, Hardanger | 140 | 34 | Q4 2018 | O 2 2020 | 49% | ||
| Total in production - Building segment | 140 | 34 |
1) NOK million excl. VAT
After the end of the quarter, on 31 October 2019, the purchase of 100% of the shares in Betonmast AS was completed. Through Betonmast Holding AS, AF Gruppen purchased 67.4% of the shares and the management and former shareholders of Betonmast purchased 32.6%. For more detailed information, see stock exchange announcements from 19 August 2019 and 31 September 2019, and notes 3 and 6.
Head office: Innspurten 15 0603 Oslo T+47 22 89 11 00 F +47 22 89 11 01
Postboks 6272 Etterstad 0603 Oslo Norway
Pål Egil Rønn, Board Chairman Arne Baumann Borghild Lunde Hege Bømark Kristian Holth Kristina Alvendal Kjetel Digre Kenneth Svendsen Hilde W. Flaen Arne Sveen
Morten Grongstad, CEO Sverre Hærem, CFO Arild Moe, EVP Civil Engineering Ida Aall Gram, EVP Property, HR and Communications Amund Tøftum, EVP Offshore and Building Norway (part-owned companies) Eirik Wraal, EVP Energy and Environment Bård Frydenlund, EVP Sweden Geir Flåta, EVP Building Norway (wholly owned companies)
Presentation of interim accounts: 08.11.2019 Interim report 3rd quarter 2019 14.02.2020 Interim report 4th quarter 2019 15.05.2020 Interim report 1st quarter 2020
The presentation of interim accounts will take place at Hotel Continental, Stortingsgata 24-26, at 8:30 a.m.
For more information on the company, visit our web site at afgruppen.com
Cover: New residences at Krydderhagen Photo: AF Gruppen / Eirik Førde
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