NRC Group — Interim / Quarterly Report 2022

Nov 8, 2022

NRC Group ASA - Q3 2022 results

NRC Group ASA - Q3 2022 results

NRC Group today published its financial results for the third quarter of 2022.

CEO Henning Olsen and CFO Ole Anton Gulsvik will present the results at 09:00 am

(CET) at House of Oslo, Ruseløkkveien 34, Oslo.

The presentation will also be webcast live on the following link:

https://channel.royalcast.com/landingpage/hegnarmedia/20221108_2/

The presentation will be followed by a live Q&A-session. Investors, analysts and

journalists are welcome to participate at House of Oslo or follow the

presentation digitally, where questions can be submitted during the event.

Below you will find a summary and highlights from the report:

Key figures Q3 2022

· Revenue: NOK 2.0 billion vs NOK 1.7 billion in Q3 2021

· EBITA*: NOK 94 million vs NOK 102 million in Q3 2021

· EBITA* margin: 4.7% vs 6.0% in Q3 2021

· Order intake: NOK 2.2 billion vs NOK 2.7 billion in Q3 2021

· Operating cash flow: NOK 96 million vs NOK 238 in Q3 2021

· Order backlog: NOK 8.6 billion vs NOK 7.6 billion in Q3 2021

* Before other income and expenses (M&A expenses)

Strong growth and record high order backlog

The third quarter revenue was NOK 1,988 million compared to NOK 1,698 million

for the same period of 2021. The revenue increased with 17% in the quarter, due

to strong growth in Norway and Sweden. Adjusted for currency effects, the growth

was 20%.

The Group's profitability, measured in EBITA* was NOK 94 million in the third

quarter, down from NOK 102 million in the same quarter last year. The result

included profit from sale of fixed assets totalling NOK 7 million, compared to

NOK 16 million in the same quarter last year. The Group's financial performance

remains satisfactory as EBITA* margin ended at 4.7% compared to 6.0% in the same

quarter last year.

The cash flow from  operations was NOK 96 million compared to NOK 238 million in

the same quarter last year. Year to date the cash flow from operations was NOK

75 million, down from NOK 209 million in 2021, due to increased working capital

in the period.

Finland had a revenue of NOK 804 million compared to NOK 793 million in the

third quarter last year. Adjusted for currency effects the organic growth was

4%, mainly driven by higher volumes in Rail construction and partly offset by

reduced volumes in Light Rail and Maintenance. The EBITA* was NOK 78 million

compared to NOK 87 million in the same period of 2021, leading to an EBITA*

margin of 9.7% for the quarter, down from 10.9% last year. The reduction is

mainly related to net gain from sale of machinery at NOK 9 million in the third

quarter of 2021 compared to NOK 3 million in this quarter. Good profitability in

Rail construction and Light rail, was partly offset by weak results in

Maintenance.

Revenue from the Swedish operation amounted to NOK 630 million for the quarter

compared to NOK 411 million in the same period of 2021. Adjusted for currency,

the organic growth in the quarter was 64%, with strong growth in Rail

construction. The EBITA* for the quarter was unchanged at NOK 1 million compared

to 0 million for the same quarter last year. Improved results in Rail

construction were offset by weak results in Civil.

Revenue in Norway was NOK 554 million compared to NOK 495 million in the third

quarter of 2021. The organic growth was 12% in the quarter, driven by

improvements within the Rail divisions. EBITA* was NOK 27 million compared to

NOK 20 million in the same period of 2021, which resulted in an EBITA* margin of

4.9% in the quarter, up from 4.1% for the same quarter last year. Profitability

was driven by strong results from Environment, improved results in Rail

construction, partly offset by weak results in Civil.

The Group operating profit (EBIT) for the third quarter was NOK 85 million, a

reduction from NOK 89 million last year. Year to date EBIT was NOK 91 million up

from NOK 32 million last year. Net financial items amounted to NOK -14 million

for the quarter, compared to NOK -17 million for the same period last year. This

included a reduction in net interest expenses from NOK 14 million to NOK 12

million due to debt instalments in the period. The Group has a NIBOR hedge

linked to the outstanding bond, which partly offsets increased market interest

rates. Year to date, net financial items were NOK -43 million compared to NOK

-50 million last year. The share of profit from associated companies totalled a

loss of NOK 9 million for the third quarter 2022, compared to NOK 0 million in

the same period last year.

Earnings before tax (EBT) for the third quarter was NOK 61 million compared to

NOK 71 million last year. Year to date, EBT was NOK 40 million compared to NOK

-19 million last year.

Net profit was NOK 46 million in the quarter compared to NOK 58 million last

year, with earnings per share (EPS) of NOK 0.64 compared to NOK 0.80 same period

last year. Year to date, the net profit was NOK 30 million compared to NOK -18

million last year.

ORDER INTAKE

The order intake in the third quarter was NOK 2,161 million, with a split

between announced contracts of NOK 989 million and unannounced contracts of NOK

1,172 million. The book-to-bill ratio was 1.1 in the quarter and 1.1 over the

last 12 months.

The order backlog amounted to NOK 8,610 million at the end of September, an

increase of NOK 261 million from last quarter, including a positive currency

adjustment of NOK 88 million.

The order backlog for production in the remaining of the year, amounted to NOK

1,485 million at the end of September, an increase of 9% compared the same

period in 2021.

ANNOUNCED ORDERS

In Norway, announced orders included an appointed contract by Skien municipality

of NOK 36 million related to the construction of Damfoss bridge. The work is

scheduled for completion in July 2023.

NRC Group Sweden was appointed to a contract for the maintenance of railways in

the area Mittbanan and Ådalsbanan, appointed by the Swedish Transport

Administration. The contract is valued at approximately SEK 773 million and will

commence in June 2023. The  contract will involve rail services such as track,

signalling and electro and is scheduled for completion in May 2028, with an

additional 2-year option period. New orders in Sweden also included a contract

for the maintenance of railways in the area Godsstråket, appointed by the

Swedish Transport  administration. The contract is valued at approximately SEK

228 million and will commence in  November 2022. The contract will involve rail

services such as track, signalling and electro, and is scheduled for completion

in October 2028, with an additional 2-year option period.

TENDER PIPELINE

The Group has identified an addressable tender pipeline of approximately NOK 21

billion for the next nine months. This compares to a NOK 20 billion tender

pipeline three months ago and NOK 20 billion at the same time in 2021.

The tender pipeline in Finland is approximately NOK 1.7 billion, a decrease of

approximately NOK 0.1 billion compared to the tender pipeline three months ago

mainly due to Maintenance, partly offset by more tenders in Rail construction.

The tender pipeline is approximately NOK 2.2 billion lower than in the same

period last year, related to a reduced tender pipeline in Rail construction. The

tender pipeline in Norway is approximately NOK 7.0 billion, a decrease of NOK

0.4 billion compared to the tender pipeline three months ago. The decrease is

explained by reduced number of tenders in the marked for Civil construction and

the Environment services. The tender pipeline has also decreased by

approximately NOK 0.4 billion compared to the same time last year. The decrease

is related to Rail construction.

In Sweden, the tender pipeline is approximately NOK 12.7 billion, an increase of

NOK 2.0 billion compared to the tender pipeline three months ago. The increase

is mainly explained by Rail construction. The tender pipeline is NOK 4.0 billion

above the same period last year, which is related to increased level of tenders

in both Rail and Civil construction and Maintenance.

OUTLOOK

NRC Group is strongly positioned in a growing market with a substantial tender

pipeline. In 2023, NRC Group expects investments in rail to remain strong, based

on proposals in national budgets and national transportation plans in Norway,

Sweden and Finland.

Uncertainty in the world economy has had limited impact on NRC Group per date.

The uncertain situation has led to an evaluation of public investments in

infrastructure going forward in the Nordics and can impact rail funding in

certain projects.

NRC Group continues its focus on measures to improve profitability. For 2022, we

expect a continued positive operational and financial development with strong

revenue growth and moderate increase in EBITA* margin compared to 2021.

The third quarter 2022 result report and result presentation can be found

attached and will be available on the company's homepage: www.nrcgroup.com

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to Section 5-12 of the Norwegian Securities Trading Act.

This stock exchange announcement was published by Charlotte Krog, Communication,

NRC Group ASA., on 8 November 2022.