NRC Group — Investor Presentation 2020

Feb 12, 2020

NRC GROUP ASA: CREATING A NORDIC LEADER IN SUSTAINABLE INFRASTRUCTURE

NRC GROUP ASA: CREATING A NORDIC LEADER IN SUSTAINABLE INFRASTRUCTURE

NRC Group presents the Group's strategic development, ambitions and outlook

after completion of the strategy process initiated in the second half of 2019.

NRC Group's long-term ambitions and strategic priorities are:

· Be the most attractive partner and employer of tomorrow's infrastructure

· Restore profitability through operational improvements

· Capitalize on leading Nordic position and strong markets through profitable

organic growth

· Utilise Nordic capabilities to expand into complementary services

· 2024 financial ambitions: NOK 10 billion of revenue at 7% EBITA margin

Short-term focus on restoring profitability

NRC Group was created to capitalise on strong Nordic infrastructure markets.

Organic and M&A driven growth, with 14 acquisitions including VR Track Oy in

January 2019, has enabled NRC Group to fulfil the goal of becoming a leading

Nordic rail infrastructure company.

After years of growth and good margins, profitability declined in 2018 and 2019.

Full-year 2019 revenue was NOK 6,193 million, an increase of 95% from 2018.

Group EBITA after project margin adjustments and before M&A expenses was NOK 70

million, corresponding to an EBITA-margin of 1.1%. The margin adjustments are

mainly related to Rail and Civil Construction contracts in Sweden and Rail

construction in Norway.

"We have good performance in several units and both Finland and the Civil

construction and Environment units in Norway deliver on growth and margins. In

Sweden and Rail Norway however, we need to improve performance. We have already

started a turnaround process to restore profitability, with targeted measures to

strengthen project management capabilities, project selection and tendering

processes, and the project execution model," said Henning Olsen.

In late 2019, NRC Group completed a strategy update and stablished clear

strategic priorities to restore profitability and drive growth, with a 2024

ambition of NOK 10 billion of revenue at 7% EBITA margin.

For 2020, the main priority is to execute the improvement programs and create

the platform for continued profitable growth from 2021 and onwards.  The main

elements of the turnaround are;

· attract and retain the right leadership, project managers and skilled

workforce,

· strengthen project selection and tender process, and

· strengthen execution model and portfolio governance.

"Our top priority is to improve profitability. We have established new

management with proven track records in the non-performing business units, and

this is already taking effect. We expect our new disciplined tendering process

to improve project portfolio margins going forward, and in combination with a

cost reduction program this will lead to improved profitability," said Olsen.

To restore profitability to the levels seen in 2016 and 2017 and in line with

NRC Group's long-term ambition, the Company has implemented local operational

improvement programs in each country and a Group-wide overhead reduction program

targeting NOK 55 million in cost reduction from 2020.

Growth and expansion

The NOK 10 billion revenue ambition reflects an extensive group-wide process.

The Nordic rail services market is expected to grow by around 9% annually in

coming years. NRC Group will also target additional opportunities for growth and

expansion in complementary services and capture synergies between existing

segments and across countries. Revenue growth will primarily be organic,

supported by bolt-on M&As in existing segments and services.

"We have created a Nordic leader in sustainable infrastructure, with a unique

position in the growing Nordic rail infrastructure market and additional

complementary service offerings in attractive niche segments. Now it is time to

start harvesting from that position," said Henning Olsen, CEO of NRC Group. "To

do that, we need the right people and a strong performance culture based on NRC

values. The foundation was built in 2019 with new management installed in key

positions, ready to implement proven processes for project selection, tendering

and execution."

Outlook

For 2020, NRC Group will prioritise implementation of the updated strategy,

focusing on improvement measures to restore the Group profitability. The market

outlook is positive. Focus will be to build a solid platform in 2020 to be

positioned for further growth from 2021 and onwards. NRC Group expects revenue

for the full year 2020 to be in line with 2019. For 2020, the Group targets an

EBITA margin exceeding 2.8%. For 2021, the Group targets an EBITA margin up

towards 5%, before gradually realising additional improvements towards the

ambition level of 7% for 2024.

"We are in large and growing markets driven by strong mega trends of population

growth, urbanisation and sustainability.  For us, it is all about having the

right people to win the right projects at the right price and execute them in

the right way. Then we can fully address our organic growth opportunities and

selective bolt-on M&As," said Henning Olsen.

Capital markets update (CMU) presentation from 09:00-12:00 tomorrow in Oslo

NRC Group will tomorrow present the quarterly results followed by a Capital

Markets Update, with registration from 08:30 and presentations from 09:00 -

12:00 CET at Felix Conference Centre, Bryggetorget 3, Oslo, Norway. Group

management will provide an in-depth overview of the strategic development,

ambitions and outlook after completion of the strategy process. The event

includes presentations by CEO Henning Olsen, CFO Dag Fladby and country managers

Harri Lukkarinen (MD Finland) and Robert Röder (MD Sweden).

The presentation will be held in local language with supporting material in

English.

The CMU presentation can be found attached and will be made available on the

company's homepage: www.nrcgroup.com. The fourth quarter 2019 result report and

result presentation have been distributed in a separate stock exchange release

and are available on the company homepage.

For further information, please contact Dag Fladby, Chief Financial Officer, NRC

Group ASA on tel: +47 90 89 19 35.

About NRC Group

NRC Group is the largest rail infrastructure entrepreneur in the Nordic region.

NRC Group has experienced significant growth since its inception in 2011 and has

regional offices throughout Norway, Sweden and Finland. The company is

headquartered at Lysaker, nearby Oslo, in Norway. NRC Group is listed on the

Oslo Stock Exchange under ticker "NRC". The company's chief executive officer is

Henning Olsen.

This information is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.

www.nrcgroup.com